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I have forced investments via Australia's mandatory superannuation scheme. The value of this is about half the value of the remaining mortgage debt on my own home. If I had access to this money, I would pay down my mortgage.

The risk-free return available from saving interest on my mortgage is much more attractive than the possible (and taxed) return of any investment gains on the superannuation.

Is there any way to make this happen?

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2 Answers 2

If you're under age 55 and in good health generally you cannot withdraw your funds from super and your super fund cannot provide you with any financial assistance eg lend you money. However, for a very small percentage of people with unrestricted non preserved superannuation components ( check your statement most people's superannuation is 'preserved'which means they cannot access it until they meet a 'condition of release')they may withdraw their super benefits upto the unrestricted non preserved amount.

For healthy (& able) persons aged 55 and over they may access their super under the following conditions:

  • As a pension whilst still working
  • as a pension or lump sum if they permanently retire, change employment from age 60 or attaining age 65( regardless of your employment)

I can understand your frustration of having your money compulsory tied up in superannuation especially given the poor investment returns of the past 5 years. However, superannuation may be more flexible than you realize, I am an adviser at Grant Thornton and I am constantly telling clients that superannuation is not an invest but it the most tax effective long term savings vehicle available to Australians for their investment savings eg max 15% tax on income and capital gains if held for a year are taxed at 10%. If you're not happy with your investment returns you may like to seek some advice or,set up your own super fund - a self managed super fund where you can invest a wide variety of assets; shares, managed funds,cash, term deposits, property( your super fund can even borrow to help acquire the property)

I hope this helps

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You can set up a Self Managed Super Fund (SMSF) and use it to buy residential investment property, and as Justin has mentioned even borrow to acquire the investment property through the SMSF.

However, you cannot hold your home in the SMSF, as this would be classed as an in-house asset, and you are only allowed to hold a maximum of 5% of the total market value of SMSF as in-house assets. Furthermore, as you already own your house, you are not allowed to transfer residential property into a SMSF from a related party, even if done at current market value (you are allowed to transfer business real property from a related party at current market value).

Regarding loans, you are not allowed to lend money from your SMSF to a related party as well.

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