• Facebook
  • LinkedIn
  • Twitter
Monash Group Financial Planners
07 4639 7160 Get in touch
  • Home
  • About
  • Services
    • The Process You Can Expect
    • Personal Financial Planning
    • Personal Protection
    • Business Solutions
    • Claims Care Service
    • Estate planning
  • People
  • FAQS
  • Monash Talk
  • Contact

SMSF Pension and Exit Strategy

February 9, 2015 by Jack R Hobbs - Principal Financial Adviser

SMSF Exit strategy - resized Pinterest Feb 2015The pension phase of self-managed superannuation funds (SMSF) is a hot topic at many barbeques of late.

While it’s interesting to see the progression of discussion through the SMSF lifecycle; SMSF exit strategy is an area that also deserves some serious consideration.

Some disturbing news

Here is a summary of an article I recently read which highlighted some disturbing Australian Taxation Office, SMSF statistics. (SMSF sector enters next phase, http://www.financialstandard.com.au/news/view/47557624)

According to ATO statistics, the amount of money entering self-managed super funds (SMSF) is now exceeded by the benefit payments being taken out by members.

In the 2012/13 financial year, ingoing flows from member, employer and other contributions to the funds equalled $24.1 billion.

This figure was lower than $26.4 billion which was taken out in benefit payments during the same period.

That’s a $2.3 billion difference.

The preceding year $27 billion went in and only $22.8 billion taken out.

What does this mean?

What this means is that more and more members of self-managed super funds are reaching a matured stage of their fund.

The SMSF early adaptors’ funds are reaching maturity and they are drawing down the fruits of their labour.

And while there is still a large amount of money being rolled into these funds, the overall trend is changing.

A large amount of funds are being taken out in pensions and other phases.

It is predicted that in five years’ time we will see many more drawdowns from SMSFs.

Financial planners need to move their focus away from creating funds and creating wealth, towards strategies of distribution of that wealth by way of member payment and the winding up of funds.

Exit strategy and wealth distribution are areas in SMSFs that I have felt have long been overlooked.

Often there has been no exit strategy put in place for trustees or members who, due to death or serious illness need to retire from the fund.

Do you have an #SMSF exit strategy?

Click To Tweet

Income Streams

From a management point of view it is pleasing to see the trend of having income streams as the preferred method of which payments are being made.

This means members are using the fund to provide tax effective ongoing income, rather than taking a lump sum; spending it or placing it in a less tax effective investment.

The total SMSF payments taken as lump sums have fallen by 22% since 2009; now they are taken in pension phase.

Longevity Risk

Increased ‘longevity risk’ is a concern among the aging population who are living longer than they had expected to.

SMSF are a very tax effective way to provide you with a self-controlled retirement income stream.

Discuss your options with your financial adviser.

Do you have an SMSF exit strategy?

Who will manage your exit if you are no longer able to, due to incapacity, are unable to provide your own trustee services or simply no longer have the desire to manage it yourself?

The solution is to work with a financial planner who specialises in SMSFs.

A #financialadviser can structure an #SMSF exit with minimal cost of time & money to the fund.

Click To Tweet

Talk to the Monash Group Financial Planners team to find out how.

Filed Under: Blog, Superannuation Tagged With: investments, retirement, SMSF, superannuation

Have you been considering financial advice for your family or business?

Find out from people inside the industry, what you need to know to get the best results.

Get your copy of the Secret to Financial Advice

About Jack R Hobbs - Principal Financial Adviser

Hi. Thank you for visiting Monash Talks. For more than forty years I have worked in financial advice to help people prepare for the potential speedbumps in life. I can help you obtain financial peace of mind through insuring against potential risks. Let's talk - Regards Jack.

Learn more about Jack by visiting his profile page.

If you would like more content like this, please subscribe to receive Monash Talks.

CLIENT STORIES

https://www.youtube.com/watch?v=RdQ6QLb7bAs

Monash Talk categories

  • Blog
  • Financial Advice
  • Frequently Asked Questions
  • Health & fitness
  • Superannuation
https://www.youtube.com/watch?v=gBKRsF320RY

Latest Tweets

  • With 30 June just around the corner, here’s a handy summary to help you take advantage of any potential personal t… https://t.co/aLyANkMAHS June 16, 2019 10:15 pm
  • Follow us on twitter

About Us

About Us Our History | Financial Advisers in Toowoomba

At Monash Group Financial Planners we work with our clients to insure their lifestyles through professional planning for each stage of their lives. We are a family owned financial planning practice focused on providing services that help you achieve ... Read more

Our Services

Our Services | Monash Group Financial Planners

You may be overwhelmed with the information about the different services available within financial advice. Don’t panic… We are here to help. We sift through all the information for you to find the best products to meet your individual and business ... Read more

Our People

Jack R Hobbes | Monash Group Financial Planners

The Monash Group Financial Planners team consists of qualified financial advisers working together to provide current, accurate advice, tailored to your needs. Together, we will provide you with diverse industry knowledge and experience to meet your, ... Read more

Latest Article

Insurance Premiums and Flies - the Buzz on what to do

If considered from the wrong angle, insurance premiums can feel as irritating as a fly that returns to buzz around your head. No matter how much you wave your hands in the air and wish they would disappear, they continue to exist. In fact, you ... Read more

Copyright 2021 Monash Group Financial Planners Website By The DMA

  • About Gallagher
  • Important information
  • Sitemap

Gallagher Benefit Services Pty Ltd
ABN 49 61 1 3 43 803
AFSL 488001
15 Isabel Street
Toowoomba, QLD, 4350