Superannuation Advice for Australian Expats
Are you getting the most out of your Australian Super?
Superannuation can be complex and is often subject to change. Despite this, it is a vital tool to accumulate wealth for those wishing to set themselves up for retirement. Take advantage of your Super through our Superannuation Advice for Australian Expats by:
Reviewing your Super to align with your goals, timeframe and lifestyle
Choosing the right investments tailored to your needs
Structuring your portfolio to be diversified and protect against risks
Making strategic contributions to your Super
Taking advantage of tax minimisation opportunities
How we can help you maximise your Superannuation as an Australian Expat
For Australian Expats, superannuation is often an asset left dormant once their superannuation guarantee contributions (SGC) cease (SCG is usually only paid by an Australian employer). Those living abroad typically encounter the misconception that making contributions to their superannuation fund may have adverse implications for their residency status or taxation. However, your superannuation should not be neglected whilst living overseas.
At Runway Wealth Management, we encourage Expats to take control of their superannuation. We devise superannuation advice for Australian Expats tailored to help achieve your retirement goals and ensure you are getting the most from your superannuation. Some of the services we provide include:
SUPERFUND
REVIEW
We can review various aspects of your existing superannuation fund, including investment options, asset allocation, fees, beneficiary nominations and contribution history.
RISK PROFILING & ASSET ALLOCATION
We can assess your risk profile, life stage and risk appetite and compare these with your existing superannuation fund to determine its suitability.
INVESTMENT
STRATEGY
We can create a personalised investment strategy for your superannuation, formulated with a bespoke portfolio of investments that align with your preferences for income or growth and consider your goals and timeframes.
CONTRIBUTION
STRATEGY
We consider various contributions such as concessional, non-concessional and down-sizer strategies that may be suitable for you. This ensures you take advantage of the many benefits superannuation has to offer.
Can an Australian Expat contribute to their Superannuation while living overseas?
Yes, Australian Expats living overseas can continue to contribute to their superannuation fund. For Australian Expats living abroad and working for an overseas employer, your employer is usually not obligated to contribute to your Australian superannuation fund. However, Australian Expats can still make personal contributions to their fund voluntarily. Australians living overseas don’t need to be an Australian tax resident to make Super contributions, but they should be aware that residency status may affect eligibility for certain government incentives. Australian Expats should seek professional advice in their host country to determine whether making contributions to their Superannuation could have any adverse consequences.
Can an Australian Expat withdraw from their Superannuation while living overseas?
No, simply living overseas doesn’t give you access to your superannuation. Whether you’re in Australia or overseas, you still need to meet a “condition of release” in order to withdraw from your superannuation. This typically includes: • Reaching your preservation age (generally 60) and retiring; • Turning 65; • Meeting specific early access conditions (e.g. severe financial hardship, incapacity, compassionate grounds). Being an Expat doesn’t automatically allow you to withdraw your superannuation. Your super is still governed by Australian rules, and in most cases, it stays invested until retirement or another valid condition of release is met. Temporary residents (not citizens or PR) may be able to withdraw their superannuation after leaving Australia through a Departing Australia Superannuation Payment (DASP). Strict criteria apply (visa expired, left Australia, not a citizen/PR) when making a DASP application.
What should Australian Expats do with their Superannuation when moving overseas?
When moving overseas, Australian Expats should: • Consider how their superannuation is performing; • Ensure it is invested according to their risk profile and time horizon; • Review what fees are being paid and the insurance options available; • Consolidate multiple superannuation accounts to reduce fees; • Ensure Super beneficiary nominations are up to date; • Advise the Super fund of overseas contact information (new address, phone numbers). Just because you are no longer living in Australia doesn’t mean Super is irrelevant. In fact, it may become even more important. Super is a tax-effective way to grow wealth. Even if an Australian Expat is not contributing regularly to their Superannuation account while overseas, the existing balance continues to be invested.
How can a Financial Adviser help an Australian Expat manage their Superannuation?
A Financial Adviser who understands the challenges of managing superannuation as an Australian expat can help you: • Navigate what your residency status means for contributions and withdrawals; • Review your super fund’s performance, investment mix, and insurance options; • Create a retirement strategy that aligns with your global lifestyle and long-term goals. This kind of tailored advice can give you peace of mind that your super is not only compliant but also growing effectively.
Tips to consider for Australian Expats with Superannuation
Accumulating wealth inside super vs outside super
Australians are usually encouraged to take advantage of the benefits offered by superannuation (e.g. tax effective environment and availability of investment options). However, depending on your overseas location, it may be more tax-effective to build your wealth outside of superannuation while abroad and consider moving those assets into superannuation upon your return home.
Consider how your tax jurisdiction may treat super
Australian Expats should be aware of their overseas tax jurisdiction and how that jurisdiction will treat superannuation. For example, superannuation is generally reportable when residing in the United States. For this reason, contributions made to superannuation may result in punitive tax consequences at the hands of the IRS. Accordingly, any financial advice should take into account your entire situation, including any overseas tax jurisdictions.
Expats with SMSFs
Self-Managed Super Funds (SMSFs) are a popular structure among Australians. However, upon moving overseas for an extended period, they can be at risk of becoming non-compliant with the Australian Taxation Office (ATO). This is due to the SMSF failing to meet a series of residency tests and becoming non-compliant, which could result in their superannuation assets being taxed up to 47%. If you own illiquid assets in your SMSF (e.g. real estate, gold or silver bullion), Expats may have the option of nominating a trusted attorney to control their SMSF whilst living abroad. However, suppose you hold liquid assets in your SMSF that can be easily sold (e.g. Australian shares and ETFs). You may benefit from winding up your SMSF due to the ongoing reporting and potential high tax rates associated with managing a non-compliant SMSF.
Expats with an Australian investment property
Are you receiving rental income from an investment property located in Australia, whilst you are living abroad? This is considered Australian sourced income and reportable as income on an Australian tax return. Accordingly, this income may be subject to foreign resident tax rates if you are deemed a non-resident for tax purposes. You could contribute this income to your superannuation as a tax-deductible contribution. This could offset your income and result in reduced taxation payable to the Australian Taxation Office.
General Advice Disclaimer
The information contained herein is of a general nature only and does not constitute personal advice. You should not act on any recommendation without considering your personal needs, circumstances, and objectives. We recommend you obtain professional financial advice specific to your circumstances.