The transfer balance cap has required some large SMSFs to transfer pension money back to accumulation, and the two pools must be treated carefully to maintain the full benefits from superannuation.
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In retirement, it is the level of spending rather than investment returns which is the primary determinant of retirement outcomes, and there is a significant difference in spending patterns in later years.
Accurium’s facts and figures guide compiles current rates and schedules for tax, superannuation, retirement, social security and aged care, updated to 1 January 2018.
Months after the major superannuation reforms of 1 July 2017, advisers and their clients are still asking important questions, especially about transfer balance caps and segregation.
Defined benefit pensions once meant sitting back and enjoying the guaranteed income flow for life, but their treatment under the new pension rules is a potential minefield.
Four questions every SMSF member with large balances should be asking in the run up to 30 June 2017. There’s enough here to warn not to leave understanding the rules until the last minute.
Anyone with large super balances should know their choices well before 1 July 2017, although they no longer have to decide how to segregate between accumulation and pension.
Long periods of low returns are likely to compromise retirement goals that were set some years ago. This places greater importance on retirement advice and not assuming average returns and lifespans.
SMSFs transferring funds to a tax-free pension account under the proposed cap of $1.6 million will not need to sell or segregate assets from an accumulation account for the same member.
More wealth and better education levels mean SMSF trustees have a longer life expectancy by 2-3 years. They should be financially prepared and save for for those extra retirement years and beyond.
The ASFA ‘comfortable retirement standard’ for a couple is only $58,128 per annum, below the average full-time wage. SMSF trustees should check these numbers as an estimate of how much and at what age before they retire.
Get ready for more pension-related changes: from 1 January 2015 the way account-based income streams (including account-based pensions) are assessed under the income test for Centrelink purposes will be changing.