Could your family benefit from accessing a portion of your super before you retire?
From age 57, you are eligible to withdraw 10% of your superannuation account balance – while you are still working. Retiring is one of the biggest financial decisions that you’ll ever make. Retirement doesn’t sneak up on you either; over the course of your working life – 40 years or more – you have been building toward that big day.
You’ve probably had the dream conversation. That’s the one where you talk about what to do after you retire. There’s plenty to dream about, too. Maybe you want to travel more. Maybe you want to spend more time with your family. Retirement offers plenty of promise.The run-up to retirement doesn’t have to be a grind of counting down your last days. You have the opportunity to use some of the money that you’ve been saving and growing for decades to help you ease in to retirement.Once you turn 57, you’re eligible to withdraw 10% of your superannuation balance to a pension account every financial year. This is the money that you’ve been saving during your working career. Because you’re continuing to work and contributions are being made on your behalf, you’re continuing to grow your super. This means that the pot of money will continue to grow and be invested while allowing you to access a portion immediately.
You aren’t going in to retirement alone. The annual statement that you and your spouse receive for your account at the end of every financial year contains a balance of both your end-of-year balance and a projection of what you’ll have by the time you turn 65 assuming no significant changes to your contributions. If your statement does not have a projection, you can run a calculation using our online calculator. If your spouse or partner is also over the age of 57, they’re also eligible to withdraw 10% of their total super balance. If you both draw down 10% of your balances, that can add up to a significant sum that could be used to make your last working years easier.
Here are three things you should consider:
1. Look at how much you have in your super and pension accounts. The end of the year presents a great opportunity to review your balance. Both you and your significant other will receive an annual statement with your respective balances. (Or check it out year-round via our online member portal.)If you receive statements from multiple funds, this could be a good chance to consolidate into one account to save on fees.
Your annual super statement may include a forecast of what your superannuation account will look like when you reach age 65 assuming your current contribution level remains consistent.
Our benefit calculation tool can provide perspective on how long your super could last, factoring in things like career breaks or any government benefits you may be eligible for.
2. Review your needs and wants. Ask yourself:Is there anything that you need to do before you retire? Could early access to 10% of your super or pension account balance put you in a better financial position to retire? The money could be used for paying down your mortgage or credit card debts, for example.
What are some things you have always wanted to do but never had the time or money? Your super could give you the ability to cut back your working hours or take a family holiday.
3. Look at your goals for after you retire. Have a think about these questions: More than simply living comfortably, what do you want to do with your retirement?Is there anything that you can do now that can set you up for an easier transition to retirement once you decide to finish your working career?
From age 57, your superannuation account stops being an untouchable pot of money and becomes your reward for a lifetime of hard work. Best of all, you can access it while you continue to grow it!Retirement and the years leading up to it offers so much promise and potential for your family. There are many different ways you could approach the twilight of your working career; what kind of difference would early access to a portion of your super mean to you?
Want to have a chat about your options? We’re here to answer your questions on 1300 658 776.