International Retirement Funds - For Australians and other Nationalities
Superannuation structures within Australia provide a tax effective environment within which to save for retirement. However, it provides a low tax environment only within an Australian context - with both contributions and earnings still attracting tax during the accrual phase.
Depending upon your personal circumstances - including the host country in which you are located, whether you intend to pursue a long term expatriate career, your remuneration and projected contribution levels and your retirement plans - it may be very beneficial for you, and/or your employer, to consider participation in an International Retirement Plan. This is particularly the case if you do not envisage Australia as being your eventual place of retirement.
The benefits of participation in an International Retirement Plan typically include:
Before deciding to pursue such an option - whether as a substitute for Australian superannuation or as a "top up" in addition to contributing to those funds - you must receive professional advice to ensure that there is an appropriate fit for your circumstances.
If you ask why participation in these structures might be preferred to simply maintaining an overseas investment account, there are a number of potential tax planning advantages associated with foreign superannuation funds. If the superannuation fund is properly set up, on return to Australia the member's benefits may remain offshore and continue to grow tax free. However, international retirement funds are complex entities by nature and substantial setup and other costs will apply - meaning that the fund balances involved will normally need to be significant, and the individual to be anticipating a significant expatriate career, to make the process economic.
We stress that professional advice should be sought prior to participation to ensure that all the legal and other requirements are addressed. Professional advice may be obtained through the Inquiry Form at the end of this page regarding the selection of an appropriate fund and any associated taxation issues.
Advice is also available for other nationalities who are considering investing in, or establishing, an international retirement fund.