There might be times when you need to access your super early, and in some cases you can.
Growing your superannuation over the years is meant to provide financial means during retirement. This sentiment is easily understood by many and is the main reason to have a super in place. Since a super is for retirement, it’s also normally understood that the funds in your super cannot be accessed until retirement age. But did you know that there are circumstances that may allow you to access the funds in your super early? There are very strict rules in place, but if you’re wondering if or how you can access your super funds early, here are a few circumstances where you may be able to.
You need to know what your preservation age is. Your preservation age is not based on how old you are; it’s based on when you were born. For those who were born before 1960, your preservation age can be as early as 55. If you were born on or after 1, July of 1964, your preservation age is 60. Just the difference of 4 years means a big difference when it comes to drawing on your super. But what about the people born after 1960 and before 1 July of 1964? In this case, your preservation age will be between 56 and 60 depending on when you were born.
If you’re still working but you’ve reached your preservation age, you may be able to access a small portion of your super via the Transition to Retirement (TRIP) rules. However, if you decide to use this option, you’re typically limited to 10% of your pension assets per year.
If you’re suffering a severe financial hardship, you may be able to use this circumstance to access your super early. It needs to be proven that you need the money and you also need to have claimed social security benefits for 26 weeks prior. You may also be able to claim that one of your dependents suffered a major traumatic health event that would allow you to draw on your super early. In this situation, you’d have to make a claim on compassionate grounds.
For yourself, if you have an illness that is expecting to result in death within the next 12 months, you may also have a case to draw on your super early.
It’s important to remember that there are strict and stringent rules in place for drawing from your super early. There may also be tax consequences depending on when you decide to start drawing on your super. If you have any questions regarding your super or your preservation age, it’s a good time to talk to a qualified financial professional to get the answers that apply to your specific situation.