Superannuation is Australian’s retirement savings vehicle, and one of the largest and most advanced in the world. For anyone currently working in Australia, their employer will make a mandatory contribution of 9.5% into their chosen superannuation fund. This is imposed under the Superannuation Guarantee Laws in Australia to ensure that every Australian is regularly saving and investing towards their retirement.
Contributions are generally open to anyone with an Australian Tax File Number. Whether contributing to your superannuation fund as an Australian expat is right for you or not will depend on your own financial position and goals, so I would recommend you seek professional advice before considering such strategies. The purpose of this article is also to look at the movement of funds in the other direction, that how and when you can access your superannuation.
How can you access your superannuation?
In most circumstances you can gain access to your superannuation funds under two scenarios:
- Once you’ve retired and reached your preservation age, which is further explained below.
- Through a transition to retirement strategy once you have reached your preservation age
For the majority of Australians accessing their superannuation, this will be carried out when they reach their Preservation Age. This age is based on your Date of Birth and is detailed in the table below:
Once you’ve both retired and reached your preservation age, you can choose to withdraw your super in any one of three separate ways, each of which can be taxed differently, so it’s important that you receive the right advice when deciding on this strategy. It is always sensible to speak with your accountant and/or financial planner to discuss and review any tax implications for your withdrawal plans.
- Lump Sum Withdrawal: You can decide to withdraw your superannuation funds as a one-off withdrawal. This could simply be for a portion of your super or the entire amount. You can then choose how you invest this, however you will be taxed outside of the super environment on any further growth or income generated from these funds.
- Income Stream Withdrawal: Instead of withdrawing a lump sum from your superannuation account/s, you can decide to draw a regular income instead. This is done in the form of an account-based pension that will pay you a regular income from your superannuation fund.
- Annuity Withdrawal: This is paid to your from your superannuation fund as an agreed amount, which will be paid to you over a specified number of years.
Can you access your superannuation earlier?
This is a common question that our clients will often ask, particularly for those that may have only worked in Australia for a short time period, or have no plans to live in or retire to Australia. There are generally 5 cases where you may be granted early access to your superannuation funds.
- Incapacity: You are temporarily or permanently disabled.
- Severe Financial Hardship: If you’ve received Commonwealth assistance for 6 months and can’t meet your cost of living.
- Compassionate Grounds: If you’re seriously ill and must pay substantial medical bills.
- Terminal Illness: If you’ve been diagnosed with a critical illness that is likely to result in death within 24 months.
- Temporary Residents: If you’ve worked on a temporary visa in Australia that has now expired and you’re leaving.
What if I was a temporary resident of Australai?
If you worked in Australia in the past on a temporary visa, then you may be granted access to your superannuation once you have left the country and your visa is no longer in force. This wouldn’t impact you entering Australia again, and would not lead to a decline of any further visa applications.
You can find out more about accessing your super in this manner at the ATO website here.
Don’t ignore your superannuation
Superannuation is a highly tax-effective vehicle for Australians to save for their retirement, and this applies to expats planning to retire in Australia also. It’s important that you consider the role superannuation plays within your overall asset allocation and investment strategies.
To Your Financial Success!
Jarrad Brown is an Australian-trained and qualified Fee-Based Financial Planner with Australian Expatriate Group of Global Financial Consultants Pte Ltd providing specialist financial advice and portfolio management services to international and local professionals in Singapore.
Australian Expatriate Group is the trusted fee-based financial advice provider for Australian expatriates living in Singapore and throughout Asia-Pacific. Licensed by Global Financial Consultants in Singapore, our team is Australian-trained, experienced and qualified, allowing us to provide specialist advice to Australians living abroad.
To learn more about how we may be able to help you, please contact us:
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General Information Only: The information on this site is of a general nature only. It does not take into account your individual financial situation, objectives or needs. You should consider your own financial position and requirements before making a decision.