Can Australian Expats Take Their Super When Moving Overseas? – When Australian expats decide to move overseas for work, retirement, or other reasons, one of the primary financial questions that arise is about their super – specifically, whether they can take it with them.
Superannuation is Australia’s mandatory retirement savings system, and over the course of an individual’s working life, it can amount to a significant nest egg.
Here’s a detailed look into the options and implications for Australian expats considering moving their superannuation overseas:
- Accessing Super Early – In general, superannuation is preserved until the holder reaches their “preservation age,” which varies depending on one’s date of birth but falls between 55 and 60 years. This is to ensure that the money is available for retirement. However, moving overseas does not automatically grant you access to your superannuation before you reach the preservation age. There are specific conditions of release, and living overseas is not typically one of them.
- Transferring to an Overseas Pension Scheme – Australia has reciprocal agreements with some countries that allow Australians to transfer their super to an overseas pension scheme. One such agreement is with New Zealand through the Trans-Tasman Retirement Savings Portability scheme. Under such agreements, Australians can transfer their super to an equivalent scheme in the other country, preserving the retirement savings’ intent. However, these agreements aren’t universal, so it’s crucial to check if Australia has such an agreement with the country you’re moving to.
- Tax – if you do access your super early or transfer it overseas, there could be tax consequences. Australian super funds typically deduct a withholding tax for any super benefits paid to non-residents. Depending on the amount and the specific circumstances, this can be a considerable tax hit. Additionally, the country to which you’re moving might have its own tax implications for inbound pension transfers or income.
- Keeping the Super in Australia – There’s no requirement to move your super when you move overseas. Many Australian expats choose to keep their superannuation in an Australian fund. This means the super will continue to be subject to Australian rules and regulations, including the preservation age requirement. When you do reach the preservation age and meet a condition of release, you can then access the super, even if living overseas.
- Potential Benefits of Leaving Super in Australia – There might be benefits in leaving your superannuation in Australia:
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- Investment Growth: Historically, many Australian super funds have provided good returns.
- Insurance: Some super funds provide life, disability, and income protection insurance.
- Regulation and Security: Australian super funds are heavily regulated, providing a level of security for your retirement savings.
Summary for Australian Expats Looking to Move Super Overseas
If you’re an Australian expat thinking about your superannuation, it’s crucial to make informed decisions.
Whether to leave the super in Australia or attempt to transfer it depends on individual circumstances, including your age, the country you’re moving to, and your long-term plans.
It’s always a good idea to seek advice from a financial advisor familiar with both Australian superannuation laws and the financial regulations of your destination country.
