Accessing Your Self Managed Superannuation Early…

Though you may have spent years investing in your retirement, things may arise that cause you to consider accessing the funds stashed in your self managed superannuation.  In doing so, there are several things to consider, as penalties can significantly chew up large amounts of your capital, not including the amount that you withdraw to resolve your economic struggles.  The money is within your grasp, however, and if you feel that you need the funding to prevent further disaster in your personal finances, there are steps you can take to withdraw from your fund or borrow against it.  Both of these options have particular drawbacks, and knowing which is right for you will ultimately benefit you moving forward.Knowing When Withdrawals Are AllowedBecause of the tax benefits involved with stashing money in your SMSF,  withdrawing the funds early requires some extra paperwork and an understanding that you will be absorbing some stiff penalties in the process.  However,  if you need the money today,  you can withdraw funds from your self managed superannuation by proving that you are actually enduring a severe economic hardship.  The entire process is governed by the Australian Prudential Regulation Authority,  so you’ll need to exhibit the hardship to their representatives.  If approved,  you’ll be able to move forward with your withdrawal and get the financial relief you need.Initiating the ProcessThe fund oversight organisation is the first group you should contact if you are considering the release of SMSF funds.  They are the “gatekeeper” in a way,  as they maintain the right to approve or deny the withdrawal.  They will explain the necessary documents you must provide to receive an early release of your capital, and even after you get approval from the APRA,  you must contact the fund management firm again to get confirmation that you will be able to access the money.  There will be substantial fees likely applied to your account;  so be prepared to see a large chunk of your retirement fund disappear.What is “Financial Hardship”?Getting approved to withdraw funds from your self managed superannuation isn’t easy,  but there are particular situations in which getting the necessary go-ahead is likely.  For example,  those who are about to lose their home due to foreclosure or those being crushed with sudden medical bills can apply for withdrawal.  Additionally,  any family members who have developed a disability or terminal condition may require expensive home-based care,  and should this happen, you can also consider this to be “severe economic hardship”.  Getting funds from your SMSF can be a life-saver, provided that you fully understand the ramifications of accepting the money early.Your self managed superannuation is your money, whether you are at the specified withdrawal age or not.  And, when should the need arise, you can access the funds.  Following the proper protocol is essential, and having the necessary documentation to prove that there are economic woes that cannot be resolved without it is the key. Your provider and the interactions with the Australian Prudential Regulation Authority (APRA) will be the determining factors in whether or not you are granted access to the funds.The tax benefits are what ultimately invoke the need for early withdrawal penalties, but when disaster strikes, know that you have options.  Investing in your future is one of the sure-fire ways to guarantee that you can enjoy an elevated lifestyle long after your career is over.  But, if the need arises, you can access the funds if it helps to prevent an economic disaster that you simply cannot recover from.  It should be noted that one must avoid these situations at all costs, but should it occur, you have options.