Does moving overseas affect super?

Have you ever dreamt of living overseas for a while once you've retired?

Australians are well known for being enthusiastic travellers, so once they have the flexibility of retirement it's not surprising that many think of moving to one of the destinations they've loved.

And with the higher cost of living in Australia, there are even more people toying with the idea of relocating to a country where every dollar they've saved goes a lot further.

Popular retiree destinations for Australians include Italy, Greece, Spain and Portugal. Asian destinations like Thailand, Malaysia, Vietnam, Bali are also appealing - they're close by and have an especially low cost of living.

However, before you pack your bags, say adios and head to foreign shores, it's important to first make sure you understand any negative implications it could have on your financial situation. Crucially, that includes your super and also access to the Australian age pension.

The good news is continuing to access and manage your super while living overseas is no problem.

Financial planner with NGS Super, Toby Perkins, said the rules around when you are able to access your super still apply. "If you qualify, you are able to access an income stream," he said. "However, income needs to be paid into an Australian bank account."

But doing your due diligence on your intended new country of residence is still vital, from looking at its tax system and exchange rate, to its cost of living and the services available, such as healthcare.

"While any income/lump sums from NGS are paid tax-free when you are over 60, the tax rules for your new home country may be different," said Mr Perkins.

"The exchange rate with your local currency may make an income stream paid in Australian dollars less reliable so it's something to carefully consider. And while living costs might be lower, you may not have access to services like free quality health care as you do in Australia so could end up needing to pay extra for it."

If the income you're planning to rely on when living overseas includes an Australian age pension there are a few details to tick off before you depart.

Mr Perkins said Australian pensioners can stay up to six weeks overseas before they return to Australia and still receive their Australian pension normally. However, if you're moving overseas or your travel plans exceed six weeks, your pension payments may be affected.

"Once you reach six weeks your supplement will drop to the basic rate, and any energy supplement will stop," Mr Perkins said. "And when you reach 26 weeks overseas your rate will depend on how long you were an Australian citizen. If it's more than 35 years your rate won't change in most cases, but if it's less you might get a lower rate."

If you're planning to apply for the age pension, do that in Australia before you leave. "You can get the age pension while you're not in Australia, but there are some conditions that can stop payments. Visit Services Australia for the list of conditions,'' said Mr Perkins.

Another factor to be aware of is if the country you plan to live in is one of the more than 30 that has an international social security agreement with Australia. "The rules around social security agreements can get complex so it's a good idea to get professional advice from Services Australia," said Mr Perkins.

This is part of a series of articles to help you prepare financially for the various stages of life. Each month, an NGS Super expert answers your questions. Just email your question to ASKNGS@ngssuper.com.au

The information provided is general information only and does not take into account your personal objectives, financial situation or needs. Before acting on this information or making an investment decision, consider your personal circumstances and read our Product Disclosure Statement and Target Market Determination available at ngssuper.com.au

This is branded content prepared by NGS Super Pty Limited ABN 46 0003 498 487 AFSL 233 154 the trustee of NGS Super ABN 73 549 180 515.