The $5M Super Story Every Expat Needs to See Before Coming Home
We’ve been working closely with long-term Australian expats based in Tokyo and Singapore who are planning their return to Australia in 2025.
These senior executives are employing a two-part strategy for retirement planning after many successful years abroad. The strategy includes:
A Significant Foreign Superannuation Plan (as an expat of 20 years)
A Modest Australian Superannuation (having lived outside Australia for two decades)
Australian Superannuation
For returning expats, Australian super remains a highly attractive and tax-effective retirement structure. And there’s a valuable window to make substantial contributions before the financial year ends on 30 June 2025:
Contribute up to $120,000 per individual in non-concessional contributions
Couples can collectively contribute $240,000 toward their individual $1.9 million pension caps
The Pension Cap is the maximum amount you can transfer into a tax-free retirement income stream. For FY 2024–25, this cap is $1.9 million.
From 1 July 2025, take advantage of the 3-year bring-forward rule to contribute up to $360,000 per person, and repeat this strategy in four years.
Potential contributions over four years:
$120,000 each before 30 June 2025
$360,000 each in FY 2025–26 (activating bring-forward rule)
Another $360,000 each before 30 June 2029
Total: $880,000 per person When invested wisely, this can place a couple well on their way to maximizing their pension caps.
One executive, after two decades of international work and disciplined savings, has built a $A5 million (US$3.2 m )foreign super plan invested in global assets.
Now returning to Australia at age 62, he’s beginning to draw a pension from the plan.
Example Scenario:
Contribution Value at Residency: US$3.2 million (≈A$5 million)
Annual Pension Withdrawal: A$390,000
Capital Deduction Calculation: A$5 million ÷ 20 years (life expectancy for a 62-year-old male) = A$250,000/year
Outcome: *Pension (A$390,000) – Capital Deduction (A$250,000) = $140,000 taxable income →
Tax liability approx A$35,988 which equates to an effective tax rate of just 9.22%
*Note this is an example only and the actual pension amount would be calculated by an Actuary
If you're an executive planning your return to Australia in 2025, understanding the interplay between foreign and Australian superannuation is critical.
These strategies can create significant tax efficiencies and support a smooth transition into Australian retirement.
Best wishes
Regards,
Dale Hoy
m) +61 419 364 994
Here are 2 ways I assist Australian expats plan their repatriation.
1 Download my checklist on the 7 key areas for Australian expatriates to start exploring with their advisor.
3 Book a private conversation with me at your convenience.
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