Since its introduction in 1992, superannuation has become a cornerstone of retirement planning for Australians. While the concept is straightforward – regularly contributing a portion of your earnings to fund your retirement – life doesn’t always follow a straight path.
As Newcastle financial advisers, we often help clients navigate unexpected changes to their superannuation plans. Here’s what you need to know about protecting your super through major life events.
1. When You Pass Away
Many people are surprised to learn that their Will doesn’t automatically control their superannuation benefits. Instead, super is governed by Australian tax law and distributed according to your Nomination of Beneficiary.
Types of Nominations:
- Binding Nomination
- Specifies one or more dependents to receive your benefits
- Fund trustees must follow these instructions
- Provides certainty about where your super will go
- Non-Binding Nomination
- Records your preferences
- Trustees retain discretion over final distribution
- May not result in your preferred outcome
What You Should Do:
Contact our Newcastle office to discuss completing a proper Nomination of Beneficiary. It’s a straightforward process that provides peace of mind for you and your loved ones.
2. If You Die Without a Will
While super trustees primarily look at beneficiary nominations regardless of whether you have a Will, dying intestate (without a Will) can complicate matters significantly.
Without a binding nomination, trustees must assess your relationships to determine entitlement. If they can’t identify any dependents, your super may become part of your estate and be distributed according to intestacy laws.
What You Should Do:
- Get your Will prepared professionally
- Complete a Nomination of Beneficiary
- Review both documents regularly
- Seek professional advice to ensure everything aligns with your wishes
3. During Divorce
In Family Law, superannuation is treated as an asset, meaning it can be divided between you and your former partner through:
- Negotiation
- Court order
Your ex-partner may then:
- Open their own super account
- Roll the amount into their existing fund
- Access the benefit if they meet release conditions
Remember that tax-free and taxable components are divided proportionately between both entitlements.
What You Should Do:
Book a consultation with our team to understand:
- Your new tax position
- Changes to contribution thresholds
- Strategies to rebuild your super
4. Moving Overseas
Planning to leave Australia? Your super generally stays put. Since 2002, moving overseas permanently is no longer grounds for early release. However, you have options:
- Keep your super in Australia under normal preservation rules
- Transfer to an eligible overseas fund under the Qualifying Recognised Overseas Pension Scheme (QROPS)
What You Should Do:
- Contact your fund trustee for specific guidance
- Check ATO guidelines for managing super internationally
- Seek professional advice about the tax implications
5. Early Retirement
The government’s approved early retirement scheme offers limited tax-free payments for people over 65 who haven’t reached retirement age. While this can provide opportunities for some employee groups, it comes with:
- Strict conditions
- Complex tax structures
- Specific eligibility requirements
What You Should Do:
- Consult the ATO’s Approved Early Retirement page
- Seek professional advice about your eligibility
- Consider the long-term implications for your retirement planning
Protecting Your Super Through Life’s Changes
Your superannuation is likely one of your most valuable assets. Making informed decisions about its management can significantly impact your financial security in retirement, regardless of what life throws your way.
Need Help Managing Your Super?
As your local Newcastle financial advisers, we understand how life changes can affect your superannuation and retirement plans. Whether you’re:
- Planning your estate
- Going through separation
- Moving overseas
- Considering early retirement
We can help you make informed decisions that protect your financial future.
Contact our Newcastle office today to arrange a consultation and ensure your superannuation is properly protected through life’s changes.
