Can I Access My Superannuation Early?

Superannuation, mostly known as "super," plays a major role in planning for retirement in Australia. It’s a savings scheme designed to provide income for Australians once they stop working. However, life doesn’t always follow the conventional route, and situations may arise where accessing your superannuation earlier than expected is needed. But are there possibilities when early access becomes available? In this blog piece, we give you all the information you need to know about receiving your super earlier than scheduled.

Understanding the Basics of Superannuation

Before we look into the options of receiving your superannuation early, it's important to understand the basics of how your super works. If you’d like to take a detailed look into what superannuation is and how it works you can read our detailed blog here.

Conditions for Access

Accessing your superannuation before reaching retirement age is generally governed by strict rules known as "conditions of release." These include:

Preservation Age

This is the earliest age at which you can access your super, which varies based on your date of birth. For those born before 1 July 1960, the preservation age is 55. For those born after that date, it gradually increases up to 60 for those born after 30 June 1964.

Retirement

You can access your super once you reach preservation age and decide to retire, either fully or partially.

Transition to Retirement

If you've reached preservation age but are still working, you may access your super through a transition to retirement pension.

Financial Hardship

In cases of severe financial difficulty, you might be eligible to access some of your super, subject to specific criteria and limits.

Compassionate Grounds

This includes situations such as medical treatment or expenses, mortgage foreclosure, or palliative care.

Terminal Illness

If diagnosed with a terminal medical condition, you may be able to access your superannuation early.

Early Access During COVID-19

During the COVID-19 pandemic, temporary measures were introduced by the Australian government allowing early access to super for those who were facing financial hardship due to the crisis. Eligible individuals could apply to withdraw up to $10,000 in the 2019-20 financial year and an additional $10,000 in the 2020-21 financial year.

Tax Considerations

It's important to remember that accessing your super early can have tax implications and may impact your retirement savings in the long term. Withdrawals are generally taxed differently depending on your age and individual circumstances.

Beware of Scams

As superannuation represents a significant financial asset, it's important to think about the risk of potential scams or offers that appear too good to be true. Always verify the legitimacy of any request for your superannuation information or early release.

Seek Professional Advice

If you're thinking about gaining early access to your super, it's highly recommended to seek advice from a qualified financial advisor or directly from your super fund. They can offer personalised guidance tailored to your specific situation and help you understand the potential implications for your retirement savings.

Summary

Although superannuation is intended for retirement, there are certain circumstances where early access may be possible under specific conditions. Understanding these conditions and seeking professional advice are essential steps in making well-informed decisions about your financial future.

Remember, early access to super should be approached with careful consideration, weighing immediate needs against the long-term impact on your retirement savings.

Here at the GLOSS Vault, we have made it our mission to help as many people like you across Australia and New Zealand feel in control of your money and ensure you’re getting the most out of it. To find out more about us and what we do click here. If you’d like to see our app in action for yourself head here!