Retirement after relationship breakdowns

Facing a relationship breakdown near retirement requires careful planning to separate superannuation and assets to ensure you stay financially stable and secure in the future.

By Anette Sampson - 4 min  read

headshot

A little about Annette

Annette Sampson has spent many years writing about how we can all make the most of our personal finances. She specialises in making complex subjects like super easier to understand.

Separating from a partner is a major life upheaval at any time. But having seen a few older couples go through it recently, it has struck me that in some ways it’s different as you approach retirement than when you’re younger.

The theory is that your pre-retirement years are a golden time to plan a less hectic lifestyle with your life partner. Travel, hobbies, maybe a sea change or tree change. After working and building up your assets, it’s time to enjoy them.

But it’s also a time when relationship problems that were hidden or pushed under the carpet while you were focusing on things like work, raising a family, and paying off the mortgage can come to the fore.

Let’s be honest. Separating at any age is messy and frightening. But if you break up when you’re younger, both of you hopefully have the ability to move on and rebuild things like your retirement savings. But the closer you get to retirement, the fewer options there are to start again. Instead of looking at beach houses or cruise packages, you’re wondering if you can afford to go it alone.

So, it’s really important to make the most of what you have.

How super is treated in separations

The good news is that as you get closer to retirement, super is often a significant asset. The bad news is that it’s rare for couples to have equal amounts saved in super. Women, in particular, often miss out because they take time out of the workforce to raise a family. Or often they just get paid less!

Legally, super is regarded as an asset of the partnership, regardless of whose account it is actually in. That doesn’t mean it has to be split down the middle, or even split at all, but it does need to be considered when dividing up your assets. It’s part of the pooled assets which you can either come to an agreement about splitting or get a court ruling if you can’t agree. The law takes into account things like how long you’ve been together, what you’ve contributed to the relationship (non-financial contributions as well as financial ones), and your future needs.

In some cases, it may work better for one partner to take assets like super while the other gets all or more of the family home. It will depend on your needs and circumstances.

Generally, the law is very similar for married and de facto couples. Note that there are now laws to stop people hiding or lying about their super in a breakup. It’s now possible to ask the Australian Taxation Office for details of your ex’s super to be provided to a family law court if you believe it is not being properly disclosed.

But super is a bit different

The difference with super is that it is still subject to the rules and regulations that govern things like when you can access your money. If you decide to split your partner’s super, for example, you don’t automatically receive your share as a cash payment. It will still be ‘preserved’ in the super system until you meet a condition of release – generally that means you turn 65 or retire earlier after reaching your preservation age (55-60 depending on when you were born, but 60 for anyone born from July 1, 1964).

Because super is ‘future money’, rather than ‘now money’, it is also possible to defer splitting super until later – say at retirement. However, it is more common for separating couples to want everything resolved at once so they can plan ahead with certainty.

What happens next

Super can be split by either a financial agreement or a court order and the process will be determined by your fund’s rules. Expect lots of form filling and documentation.

But the bottom line is that if you’re splitting one partner’s super, that money can usually be transferred to the other partner’s account. Some funds will allow the receiving partner to set up a new account in their own name, or the money can be transferred to an existing account.

Because different components of a super account may be treated differently for tax purposes, the ATO says the tax-free and taxable components are calculated immediately before the split and proportionately divided between you. That way the tax treatment remains the same, even though the money has been split. After that, the money is effectively yours, and you will be taxed on any lump sums or income paid from your account. Because your total super balance has changed, this may also affect how much you can or should contribute going forward.

It's also worth reviewing who your super goes to if you die. Chances are you don’t want it going to your ex.

Seek advice

While your super fund will be able to give you basic information on how super benefits work and how it will handle a split, this is an area where you will benefit from professional advice.

A family law expert can guide you through the process of splitting your assets, but it’s also worth consulting a financial adviser or accountant who understands super and can ensure the split maximises the outcome for both of you. 

Zest! recommends

RETIRING

Q&A: Pre-retirement guidance and advice

There are several ways to access guidance and advice in the years just before retirement.

By Emma Barrett

Read the article

The views and opinions expressed in this article are those of the author and do not purport to reflect the views and opinions of Russell Investments.

Issued by Total Risk Management Pty Limited ABN 62 008 644 353, AFSL 238790 (TRM) as trustee of Russell Investments Master Trust ABN 89 384 753 567. Nationwide Super and Resource Super are Divisions of the Russell Investments Master Trust. The Product Disclosure Statement (‘PDS’), the Target Market Determinations and the Financial Services Guide can be obtained by phoning 1800 555 667 or by visiting russellinvestments.com.au, or for Nationwide Super by phoning 1800 025 241 or visiting nationwidesuper.com.au, or for Resource Super by phoning 1800 824 227 or by visiting resourcesuper.com.au. Any potential investor should consider the latest PDS in deciding whether to acquire, or to continue to hold, an investment in any Russell Investments product. Russell Investments Financial Solutions Pty Ltd ABN 84 010 799 041, AFSL 229850 (RIFS) is the provider of MyTracker and the financial product advice provided by GoalTracker Plus. General financial product advice is provided by RIFS or MUFG Retire360 Pty Limited (Retire360) ABN 36 105 811 836, AFSL 258145. Limited personal financial product advice is provided by Retire360 with the exception of GoalTracker Plus advice, which is provided by RIFS.Russell Investments Employee Benefits Pty Ltd (70 099 865 013) (RIEB) is the provider of the Super Tracker Mobile App.

This communication provides general information only and has not been prepared having regard to your objectives, financial situation or needs. Please note, errors may occur on occasion and if they do we will rectify them. If you identify an error, please let us know and we will rectify it. Before making an investment decision, you need to consider whether this information is appropriate to your objectives, financial situation and needs. If you'd like personal advice, we can refer you to the appropriate person. This information has been compiled from sources considered to be reliable but is not guaranteed. Past performance is not a reliable indicator of future performance. To the extent permitted by law, no liability is accepted for any loss or damage as a result of reliance on this information. This material does not constitute professional advice or opinion and is not intended to be used as the basis for making an investment decision. This work is copyright 2025. Apart from any use permitted under the Copyright Act 1968, no part may be reproduced by any process, nor may any other exclusive right be exercised, without the permission of Russell Investments.


Russell Investments' ownership is composed of a majority stake held by funds managed by TA Associates Management, L.P., with a significant minority stake held by funds managed by Reverence Capital Partners, L.P. Certain of Russell Investments' employees and Hamilton Lane Advisors, LLC also hold minority, non-controlling, ownership stakes.

© Russell Investments Group, LLC. 1995-2025. All rights reserved. This material is proprietary and may not be reproduced, transferred, or distributed in any form without prior written permission from Russell Investments. It is delivered on an "as is" basis without warranty.