Skip to main content

Retiring overseas - what to consider

Major Issues when Moving Overseas

Almost without exception we believe that any Australians retiring overseas should seek financial advice before doing so, but consider the following issues.

Access to Superannuation

Some twenty years ago it was possible to access your superannuation as a lump sum, prior to meeting the normal preservation age/conditions of release conditions if it was your intention to move overseas on a "permanent basis". That flexibility no longer exists and there is no provision to simply transfer your super overseas, except with the narrow exception of transfers to New Zealand and into KiwiSaver accounts. Consequently, non-residents generally need to meet exactly the same access conditions as residents when it comes to superannuation.

Taxation of Superannuation

While your superannuation income or lump-sum payments might be tax-exempt in Australia, if it comes from taxed super funds, that may not be the case in the country in which you are resident overseas. Depending on your country of residency, there may be a double taxation agreement between Australia and your country of residence which determines taxing rights, the country may not levy any tax on your income or you may be subject to full marginal tax, with or without allowance for that part of the payments constituting a return of capital. Some countries may levy a wealth tax on your superannuation balance and others may seek to tax your superannuation earnings even before you begin to draw on your fund.

Obviously, you should seek professional tax advice in advance of any permanent or long term move overseas to establish how any income will be taxed - and certainly prior to any initial withdrawal of funds.

Age Pension

Except in relation to countries with which Australia has a Social Security Agreement, you will need to be resident in Australia on the date in which you qualify for an age pension. If you are resident overseas and return to Australia in order to lodge a claim for pension, which is then granted, you cannot usually take the pension outside Australia if you leave again within 24 months - this is referred to as "portability". These restrictions are in place in order to discourage people from simply returning to Australia, obtaining a pension, and leaving again.

This can be a very complex area and the involvement of a financial planner, or at the minimum a discussion with Centrelink, is strongly recommended. We have seen individuals and couples make very serious errors in this area; presuming they would automatically be eligible for the Age pension when they reached age eligibility regardless of their location - this is not the case.

Health Insurance

Very few retirees contemplate access to comprehensive health insurance when considering a move overseas. Unless retirees are moving to a country with a well developed public health system, to which they have reasonable access, then they need to make provision for International health insurance. Most importantly, that health insurance needs to have provision for medical repatriation cover, preferably back to Australia.

Unfortunately, no Australian insurers currently provide health insurance cover for retirees. Comprehensive insurance is available through International insurers but the costs can be very high, and indeed we have seen premium quotations exceeding $US100,000 per annum for overseas retirees in their 80s. The alternative is to arrange local health insurance, if quality care is available, and separately arrange repatriation cover - again, if available.

While some retirees use travel insurance, this carries some risks and care is advised. For example, travel insurance may not be applicable if you are resident in another country other than Australia, and it can be subject to a range of exclusions - particularly in respect of pre-existing conditions.

Our clear view is that if you cannot arrange access to good quality public or private health care in your country of retirement, or afford international health insurance with provision for repatriation to Australia or other quality health insurance, you should not retire abroad. The risks are too significant to ignore and the recent corona virus pandemic has highlighted just how unprepared many Australians living overseas were in terms of medical cover.

Please note prior to making any Inquiry: Financial regulations regarding the provision of specific advice mean that it is impossible for us to provide assistance unless it is provided as part of paid professional advice. If your circumstances are not complex and don't require paid professional advice you should direct any queries in relation to the Age pension directly to Centrelink.


If you would like to arrange professional advice in relation to the above matters, please complete the Inquiry form below providing details and you will be contacted accordingly. You will receive a fee quotation in advance of any advice or services being provided.