High-end SMSFs warned against complacence
While the typical self-managed super fund (SMSF) couple at age 65 are in good stead for a comfortable retirement, big spending SMSFs have been warned against over-confidence, new research reveals.
The Retirement Adequacy paper from Accurium (formerly Bendzulla Acturial) revealed a 65-year-old SMSF couple can spend up to $58,128 per annum without having to worry about running out of money.
This was based on the Association of Superannuation Funds of Australia (AFSA) comfortable retirement standard for a couple.
"The really good news is that they can safely increase this ‘comfortable' spend in line with inflation and maintain their purchasing power over a long retirement that could last 20 or 30 years or more", Accurium chief executive Tracy Williams said.
But SMSF retirees who draw much more than the ‘comfortable' level of income are less likely to sustain this spending through their retirement.
However, more than half of 65-year-old SMSF couples cannot afford to spend $70,000 every year, while 75 per cent cannot afford to spend $100,000 per year.
"Of course, the level of retirement spending which can be confidently maintained by typical 65 year old SMSF couples will increase if they also hold significant financial assets outside of their fund, a not uncommon situation given that compulsory superannuation only commenced 22 years ago in 1992," Accurium said.
The paper looked at 60,000 SMSFs across Australia.
AUTHOR
Malavika Santhebennur
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