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Accessing Super After Retirement Can Complicate Things If You Need To Come Back To Work.

Regardless of the careful planning you dedicate to your retirement, individuals who leave the workforce to retire and access their super may decide they want or need to return to work.

Understanding how the choice to exit retirement can impact upon your superannuation is important; disregarding the potential risks involved with returning to work after accessing super can see you land in murky water.

It is regulatory for members of many super funds to sign a mandatory declaration upon retirement before being eligible to access any super. The declaration states that the individual genuinely has no intention of returning to the workforce. Specifics of the declaration will vary depending on age, conditions of retirement and many more. However, circumstances can change. At the time of signing the declaration, an individual may have had no intention to work again, but they may now have no alternative.

You are eligible to return to the workforce after accessing super without raising any flags if it is for no more than ten hours a week. This type of work is ideal for people who find retirement unfulfilling or boring and want the social benefits of being involved in a workplace, but where being employed is not a financial necessity.

If an individual decides to return to part-time employment (10-30 hours per week) or full-time employment, they will need to ensure they are not breaching any regulations pertaining to super.

If you wish to return to work for any more than ten hours a week, you will need to satisfy the Australian Taxation Office and possibly the Australian Prudential Regulation Authority (depending on the type of super fund you have) that you acted honestly and in good faith when stating you would not return to the workforce at the time of accessing your super.

If you’re someone who often finds it difficult to make large lump sum payments for goods or services, you may want to consider looking into “Buy Now Pay Later” services.

Buy now pay later essentially means that, rather than paying in a full lump sum payment for a product or services rendered, there may be an option to pay through instalments of a certain amount over a set period to make the sum of the full amount in total. This method should allow you to pay in full for the product or service without overly straining your finances – you pay back what you can, as agreed upon when you begin the buy now pay later service.

Some popular buy now pay later services include Afterpay, Zip Pay, Brightepay, and some credit card networks such as  Mastercard and Visa, can offer buy now pay later arrangements.

Though it can be a convenient, immediate solution, it may be challenging to juggle the necessary repayments with other financial commitments. It’s not always the most appropriate method for people, and you should bear in mind your situation and ability in paying back the amounts. 

Before you sign up, keep in mind: 

  • It becomes easier to overspend with buy now pay later services, so know your limits on what you can and can’t afford.
  • You will be charged fees and costs to use the service, which can add up to a princely sum in and of itself.
  • Keeping track of your payments can be tricky if you’ve signed up for multiple services.
  • It could affect your loan applications for a car or mortgage as lenders consider buy now pay later spending just as much as your credit score.
  • Late repayments can appear on your credit report, which affects your ability to borrow money in the future.
  • Layby can be a cheaper alternative to buy now pay later, with no account-keeping or late fees to consider

If you are someone who could make use of BNPL services, you may wish to:

  • Ensure that when using the BNPL service, you stick to a set limit on what you spend so that you can comfortably pay it back later. 
  • Aim only to have one BNPL account at a time to manage payments through, rather than confuse yourself with multiple payments across different providers.
  • Always budget for bills, loan payments and BNPL payments, and 
  • Rather than use your credit card for payments to your BNPL account, consider linking to your debit account instead.

If you would like assistance in planning your financial future, help in managing your budget or some friendly advice, see us for a chat about what we can do for you.

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John Briggs

Jane Noller has been my accountant for the last 15 plus years. I can testify to Jane’s professionalism and expeditious manner in dealing with the day to day issues that surrounds our business accounting.

John Briggs

Registered Building Certifier