Helping you succeed in life's financial journey
Is it time to bring your Aussie Super home?
Last one out turn the light off: Kiwis are returning home in record numbers from Australia.
Toward the end of 2015 official statistics were released revealing something that has not been seen in a generation – net migration from Australia has turned positive for the first time since 1991. At its peak nearly 50,000 Kiwis had been departing long-term for Australia. Whilst many still leave our shores for life “across the ditch”, the tide has turned and both ex-pat Kiwis and Australian Citizens are moving to New Zealand in record numbers.
This change has presented a big opportunity for the New Zealand KiwiSaver industry since Trans-Tasman portability of Superannuation was agreed upon by the New Zealand and Australian Governments in July 2013.
KiwiSaver providers have been quick to promote the opportunity, but is it simply just a case of filling out the forms and waiting for the funds to arrive?
Here are 6 key considerations that need to be looked into when moving your Australian Super back to KiwiSaver:
- Your eligibility to transfer the funds
- Tax implications
- The different restrictions between the two schemes
- The loss of insurance cover associated with many Australian schemes
- The risk of your Australian Super being moved across to the Australian Tax Office (ATO)
- Currency impacts and your longer term likelihood of remaining in New Zealand.
Your individual situation needs to be examined to make sure the correct decision is made.
The big unknown is also what, if any, legislation changes may take place on either side of the Tasman that could impact on your funds and your access to them – a change in the retirement age for example.
Can I use my Aussie Super for a first home withdrawal?
If you decide to transfer your Aussie Super to KiwiSaver, some of the benefits associated with the KiwiSaver scheme won’t apply to your Australian Super funds. This includes the ability to access the funds for a first home purchase, although any gains you make once the funds are in your KiwiSaver account can be used. Equally you can potentially access the Australian funds at the age of 60 for your retirement, currently 5 years earlier than the New Zealand retirement age.
So why transfer your Australian Super to KiwiSaver?
Consolidating your funds into one account can save fees and also makes it simpler to keep track of your funds. It can also mitigate some risk depending on your circumstances.
The key to it all is to make an informed decision and get advice that is appropriate for your personal circumstances - only an Authorised Financial Adviser can do this.
Would you like to find out your options for Aussie Super transfer?
If you don’t have a plan in place for your Australian Super, you are more than welcome to contact me and I can help you navigate your way through any potential transfer. As an Authorised Financial Adviser I specialise in Wealth Generation and helping you reach the best decisions for you. You can also check out my profile here.
You might also be interested in these articles: