"Can I withdraw my superannuation after turning 60 to invest in property?"
- Question from Ken in Brisbane.
Top answer provided by:
Ken, in answering your question I think there are two key points worth exploring.
Firstly, whether you can actually access the money in your super fund after the age of 60. Then secondly, what are the pros and cons of doing so?
To withdraw money from superannuation, you need to meet a ‘condition of release’. There are quite a few, but the most relevant to your question is the ‘retirement’ one, specifically from age 60. Which, to put it simply, says that if you stop being gainfully employed after turning 60, then you can access your superannuation.
So, it’s likely that you could withdraw from your superannuation after turning 60.
Which brings us to the next point – what are the pros and cons of doing so?
There are a few reasons to withdraw your money to invest in property:
Buy yourself somewhere to live in retirement.
Owning your home in retirement is a worthy goal, so this can be a good way to go.
Buy an investment property to help fund your retirement.
If this is the reason, though, then there are some other factors you might like to consider.
Like the tax incentives in place to encourage using the superannuation system. A tax rate of 15%, down to 0% when properly structured, can make investing within superannuation very attractive.
Another point to consider is that, depending on your own circumstances, you could invest in property using your superannuation. There’s no need to pull money out of the low-tax super environment to invest in property.
(A strong note of caution - done properly, this can work quite well. But done poorly, it can be disastrous – so seek personal financial advice from a licensed and experienced adviser before doing anything. And tread very carefully).
What’s important here is that the investment itself needs to stand on its own merits – whether you invest in, or out of superannuation is just mechanics.
And those merits are largely defined by your individual circumstances and financial objectives. It has to work for you.
Which brings me to my final note of caution – sadly, I, like most financial advisers, have seen people fall prey to spruikers irresponsibly pushing shoddy properties.
They target people worried about funding their retirement to use their superannuation balances to make easy commissions.
They often dress up low-grade investment properties with offers and promises, so they can flog them, without any consideration of people’s individual circumstances, goals and objectives.
And all without any of the robust consumer protections you have with a licensed financial adviser.
So, to summarise:
Yes, you probably can access your superannuation if you satisfy a condition of release.
And yes, you can withdraw your super to invest in property.
But, that may not be the best financial decision for you, so I’d recommend obtaining personal financial advice before doing so.
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