Once you reach retirement age, you can technically use your super for whatever you want, as long as you first withdraw it into your personal bank account. If you’re going to use your super to buy a car, you need to have met one of the following conditions:
- You must be 65 years of age
- Or, you must meet the definition of retirement
- Or, you must start a transition to retirement income stream, allowing you to withdraw between 4-10% of this balance each year.
Super Withdrawal Options
There are a few ways you can receive your super: as an income stream, lump sum, or a mixture of both. Not all funds use the same withdrawal and payment method. Each method has different tax implications and affects how much money you have for your retirement.
- Super Income Stream: this is a series of regular payments from your super, paid at least annually. These are a popular choice because it’s easier for you to manage your income and spending. They may also be referred to as pensions or annuities.
- Super Lump Sum: some funds allow you to withdraw some or all of your super in a payment known as a lump sum. You may be able to withdraw in several lump sums. Once the lump sums are taken out of your super, you will need to declare them on your tax return.
Using your super to buy a car is legal if you meet the guidelines listed above. If you have a question about your superannuation fund and what you can use it for, contact the financial experts at Mortgage House.
