Superannuation refers to the retirement benefit granted to the working class. This benefit helps secure the future of many in Australia, and it is designed to help them prepare for retirement as part of a three-pronged approach. To access your supercare, you need to have reached your preservation age, being over preservation age and starting a transition-to-retirement income stream (TRIS), 60 or over and ceasing an employment arrangement or death.

You can select either to receive your supercare benefits as a pension income stream or lump sum, or even a combination of both. Note that, pension and lump sum payments have different taxation rules if you access them before turning the age of 60. However, after you’ve reached the age of 60, both these super benefits are tax-free when accessing them.

Protected from Bankruptcy

In case you declare bankruptcy, your super benefits are preserved to the Reasonable Benefit Limit (RBL) of your pension. By doing so, the assets of the individual or business owners are protected from being taken by creditors during bankruptcy. However, there are firm rules in place for those who are trying to manipulate the system to anticipate declaring bankruptcy. Before your benefits are protected during bankruptcy, the individual will be under a lot of scrutinies.

Lower Tax Rate During Retirement

When the individual has begun receiving the allocated pension, there is no tax on capital gains or income. The super fund will be responsible for a tax of 15% of the assessable amount until the person reaches the required age, which is 60.

Salary Sacrifice

The individuals who use salary sacrifice will receive huge savings since earnings that go towards salary sacrifice are taxed only at a minimum rate of 15%. This means if the individual is at a tax bracket of 45%, then they will receive huge savings.

Conclusion

It’s imperative to note that in the superannuation circumstances, retiring varies from ceasing an employment agreement when you’re over the age of 60. In case you do this, you can obtain your super when you leave a job that ceases employment, even if you get a new job with a different employer.

Meanwhile, you can only receive the super benefits you have accumulated with your previous employer. The other super that you’ve started accumulating on at your new work must be preserved until you reach another super requirement in order to release it; in such cases, it would be the age of 65. To legally receive your super in Australia, you are required to meet the rules and regulation put in place to access the funds. Remember, different circumstances of release have various payment conditions and tax implications.