Retirement Options from an Audit Super Fund
Every one of us has the ability to work hard and earn an income. This has become our asset as an individual. In life, there will be a time that we want to retire and enjoy life with our hard earned savings thus planning and investing for the future is really important.
The government has always been active in encouraging people to save for retirement. A retirement income from a Self Managed Super Fund or generally known as SMSF Pension is a great way of saving for retirement. Once you set up your own SMSF you can have the benefit of investing your superannuation according to your own preferences.
SMSF Audit Sydney - As a member of Super Fund you can only choose from two types of pensions.
1.Account-based pension:
This is the most common type of pension also known as allocated pension. People who usually have this pension are those who have fully retired. What's good about this type of pension is that you have unlimited access to your account balance. However, be aware that it only lasts depending on the investment returns that your pension assets deliver. Since it is a regular income you receive in your retirement, it is drawn from your super benefits and provides the security of regular payments.
Account-based pension has also its rules:
·All members must have reached retirement or satisfied a condition of release.
· The minimum pension payment must be paid at least each year.
·The pension can be commuted, stopped and started as required.
2.Transition-to-retirement pension:
This is a new type of pension wherein the SMSF converts your current accumulation account into a pension account and begins to pay you your pension entitlements as requested. This is for those people who have reached the 55 year preservation age but have not yet retired from the workforce.
The rules of a transition-to-retirement pension are slightly different from the normal account-based pension.
·It is a non-commutable pension and you can only withdraw not more than 10% of the account balance each year in pension payments.
·The minimums and maximums change based on your age.
·All members must have reached their preservation age of at least 55 years.
When deciding whether an SMSF pension is the right type of superannuation for you, there are essential things that you have to consider.
It is definitely time consuming when setting up an SMSF. You will not only have to manage your own investments but you also need to administer the fund. You also need to comply with the rules and regulations set out by the ATO. So even if you work with a superannuation accountant and independent auditor, you still need enough time to get everything done.
Skills and knowledge are also important. You need to understand the investment side of things. Besides, you will also need to set an investment strategy plan to ensure you comply with the laws and regulations.
To grow your SMSF, superannuation savings are required to establish a competitive fund.
Finally, you have to understand the risks. You need to balance the level of risk against the level of financial return that's why it's important to think about your investment options carefully.
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