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Can I Withdraw From Super At Any Time?

Generally not until your retirement after your preservation age. From 1 July 1999, any contributions to super are automatically preserved until you meet a cashing event, basically ensuring it stays there until your retirement. This is, after all, the reason why super exists.

You therefore need to take care when deciding to make a large contribution. For instance, is super the best investment vehicle for all of that end-of-year bonus? You will need to look at your savings levels and think about expected expenses versus the purpose of the investment.

The preservation status of your super benefit is determined by the preservation class of your benefit. The three preservation classes are Preserved, Restricted Non-Preserved (RNP) and Unrestricted Non-Preserved (UNP).

• Why are there three preservation classes?

Before July 1999, a different preservation regime was in place. You may have UNP or RNP components as part of your super benefit.

Simply, UNP monies can be accessed at any time. RNP monies can only be accessed after you meet a condition of release or a cashing event. Generally, most RNP monies are contributions you may have made in addition to those your employer made. In this instance, if you left employment, these monies may become UNP and hence accessible.

• What is my Preservation Age?

• What about getting your money out?

To access your benefits you must meet a condition of release, or what is often referred to as a cashing event. The common cashing events follow.

Death and Permanent Disablement are obvious events that allow you (or beneficiaries) to access your super monies.

The conditions for release under financial hardship have been tightened so that you must have been receiving a relevant government income support payment for six months and can show evidence of not being able to meet your expenses. The old system did not have these checks and too much money was leaving super because people were irresponsible with their earnings. This is another example of regulatory bodies closing up 'loopholes' and to reinforce super is for retirement purposes, not to get you out of debt!

After age 60 and leaving employment, you can access your benefits.

Retirement: After age 65, you can access your benefits at any time. If you are not gainfully employed for at least 10 hours a week, you are no longer able to leave your benefits within super.
Source: ING

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Why borrow to invest?

Borrowing money to invest gives you the opportunity to achieve greater returns. Also known as gearing or margin lending, its a popular way to invest more in managed funds or shares.

You can use your existing cash, shares or managed fund assets as security for a margin loan. It is similar to taking out a mortgage - you provide the asset as security (the house)  and the lender loans you  money to help pay for the house.

1. Returns are multiplied. Borrowing money increases the size of your investment - so you can gain even more on positive returns on your investment. Of course, a geared portfolio will have a greater potential loss should the investment fall in value.
2. It can be tax effective. For example, interest on a margin loan is normally tax deductible, which reduces the tax you pay on investments and other income. Plus, you can pre-pay the interest for up to 12 months in advance, which allows you to bring forward tax deductions.
3. Diversification. This is a proven method of reducing investment risk without sacrificing long-term performance. With more money to invest, you can spread your money across more investments.

Whilst all care is taken in the preparation of this material, no warranty is given in respect to the information provided and accordingly no responsibility for errors or omissions, including responsibility to any person by reason of negligence is accepted by the company or any member or employee of the company.

The information above has been prepared on a general advice basis only. The information has not been prepared to take into account your specific objectives, needs and financial situation. The information may not be appropriate to your individual needs and you should seek advice from your financial adviser before making investment decisions