SMSFs offer control but not certainty
Retirees may feel they have more control via a self-managed superannuation fund (SMSF), but the structure can still not deliver the guarantee many of them are seeking, according to PIMCO country head, New Zealand, Tony Hildyard.
Discussing new research released by the company this month, Hildyard said certainty remained the missing ingredient.
"Retirees are very risk averse, they want some income certainty, they want control of their assets and they're very frightened of running out of money (during retirement)," he said.
Hildyard said while a self-managed super fund may well provide much of what retirees were looking for, the problem is a lack of guarantee.
"On average, it's going to work because what you tend to find with self-managed super funds is that they're more income-biased," he said. "That's a definite advantage, but the problem is that when you retire, you don't have a regular income, your tolerance for risk disappears or reduces, and you can't take the uncertainty of an average outcome."
"You can't be in a situation where you've got a 50 per cent chance that you'll have enough money to retire on."
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