Editor’s Note Sweet — you’ve figured out a way to spend a bit of time exploring another continent on an overseas adventure. In this article, you’ll learn:
Cheers! Nat Brown Editor-in-Chief Ask me anything! [email protected]
You’ve booked your flight, located your passport and organised a mate’s sofa to crash on for the next two weeks after you land. I bet you think you’ve got all your bases covered for the big ‘Overseas Experience’, right?
There’s one thing you’ve most likely forgotten, and it could be a very expensive mistake - sorting your super.
If you’re an Aussie permanent resident or citizen heading overseas to work, or an Aussie already living and working overseas, we’ve put together a few tips to help you make sure your super keeps working hard for you while you’re away.
If you’re an Australian permanent resident or citizen, unfortunately (or fortunately depending on your world view), the answer to that one is no. If you were born after 30 June 1964, the earliest you’ll be able to access your super is when you’re 60. There are a few very special circumstances that allow you to access your super earlier, but none of these involve plane tickets or Contiki tours, thank goodness.
If you’re still working for an Australian employer, just in an overseas location, you’ll continue to receive regular superannuation guarantee contributions from your employer (currently 9.5% of your annual salary package) into your super account, subject to a couple of exceptions.
However if you’re no longer working for an Australian employer, there is no obligation on your new employer overseas to pay you superannuation.
This means you’ll no longer be receiving contributions that not only helped grow your super balance, but that also went part way to covering the costs of your fund. These costs could be related to administering your account and could include any insurance you might have set-up to be paid for out of your super.
While you are overseas super fees like administration fees, investment fees and insurance premiums will still be deducted from your balance. If your balance doesn’t grow, then you could go backwards.
Before you leave it makes sense to get on top of your super and then regularly monitor it while you are away. Here are some things you might want to think about:
Consolidate If you have multiple accounts, think about consolidating into one place. This will make your money easier to manage.
Monitor it once a month online If you’re overseas, it might be worth selecting a super company that makes it easy to monitor your balance online. Trying to call an Australian support centre from the UK will give you serious sleep deprivation.
Only pay for what you need It might be worth reviewing your insurance needs. You could be paying for up to three types of insurance out of your super – Death, Total Permanent Disability and Income Protection. Insurance is often provided as a default with most funds, meaning you were signed up to it from day one. Insurance premiums are paid out of your super balance. Many super funds now let you opt out of insurance products you don’t want.
Consider topping up from overseas Just because you’re working overseas, it doesn’t mean you can’t keep adding to your super fund. Consider setting up a direct debit from your Australian bank account into your super fund, and then use low cost exchange services like TransferWise to move money back home regularly into your Australian bank account.
Some restrictions on insurance cover may apply if you are moving overseas to live and work. These restrictions may be time-related (i.e. you’re cover will cease after 3 years of being overseas) or location-related or both. You also need to retain enough money in your account to continue to pay for your cover. Check with your super fund to make sure that you have the correct information about your insurance cover.
It’s important that you check the details with your super fund, as all insurance policies are different, however generally, if you’re simply holidaying overseas your insurance cover will remain valid so long as you don’t travel to a country that has attracted a ‘do not travel’ warning from the Australian Government and you are still paying insurance premiums from your account.
Not at all. The first step is to get back in control of your money (yes, it’s your money!). To find your old super you’ll need at minimum your Tax File Number (TFN). If you can remember your previous addresses, this can also be helpful. You can use the ATO’s super lookup service or your super fund’s super lookup tool.
If you have any other questions about looking after your super, drop us a note on [email protected]
This article is general in nature, and has been prepared without taking into account your objectives, financial situation or needs. You should consider if the information is appropriate and whether you need to speak to an accredited professional.
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CEO and Co-Founder at Zuper Superannuation. Loves fintech, writing, pilates, Campari and sodas and, as of 2018, marathon running.