Looking to plan a comfortable retirement income? There are many options to choose from, both inside and outside of your super.
This is a complex area, and you need tax and entitlement advice. It is always a good idea to talk to a professional financial adviser about things like tax on superannuation withdrawals before making any significant decisions.
Accessing your superannuation
When you reach your superannuation access age and you’re eligible to withdraw your super, you have the option to leave it where it is and continue adding to it.
Retirement pension fund
Most people transfer their super balance into the pension account. Pension accounts pay a regular income to you on a monthly, quarterly, half-yearly or yearly basis.
It’s important to understand that unless you have a guaranteed product, you may outlive your pension account. The balance can increase or decrease in response to market performance and other variables.
Investing in an annuity
An annuity is paid by a life insurer in return for a lump sum, from a super fund or other savings. Again, payments can usually be paid monthly, quarterly, half-yearly or yearly and you can receive them for a certain period or for the rest of your life.
The main disadvantage is that your money is locked away, although there are now some products that allow you to make extra withdrawals.
Self Managed Superannuation Fund
Ever wondered why so many small business owners have self-managed super funds (SMSFs)?
A natural tendency to want to do it yourself is one reason; another is the ability to use your super to invest in property that can also be used in your business
CAN SMSFS ENGAGE IN TRANSACTIONS WITH RELATED PARTIES?
Generally speaking, SMSFs are prohibited from engaging in transactions with ‘related parties’ of the fund, which includes members of the fund, their family members and business associates.
Business real property is also excluded from the in-house assets rules (which generally prohibit transactions with related parties).
Residential property can be purchased but within limits and must not be rented out to any related parties.