Damian Rajah

Generally, super access starts at retirement. However, what not many people know is that there are several ways you can access your super capital a little earlier. ⁠⠀⠀⠀⠀⠀⠀⠀⁠

The first way is via hardship provisions. This is when you may be stuck in a bind and need cash, for example,because the banks are about to foreclose on your home. Due to Covid-19, you are also now allowed to draw out $10,000 out of your super this financial year if you have suffered a loss of income of 20% or more. There are guidelines that dictate your eligibility so do your research or speak to a financial qualified advisor before withdrawing to avoid harsh penalties. You should also look at other financial options before withdrawing from your super – the negative long-term impact on your retirement wealth may not be worth the quick cash injection now!⠀⠀⠀⁠

The second way, Transition To Retirement, lets you access 4 – 10% of the capital when you reach preservation age, currently set at 55 years of age.⁠
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The third way is to pay most of your life insurances out of your superannuation account. This allows you to invest (or spend) more of your after-tax dollars to achieve your lifestyle and financial goals.⁠
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The fourth way is to pay a portion of financial advice fees to accredited financial advisers instead of taking money out of your pocket.⁠
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Super is the best tax minimisation entity available to Australians. You can’t ignore it, but there are a bunch of rules to adhere to so tread lightly. Use it to your advantage if you can because it is a long term strategy. Have time on your side rather than working against you when it comes to superannuation.

For personalised advice on maximising your super capital, contact the Superannuation Advice Australia team.

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