SPAA points to ATO's statistical validation
Figures recently released by the Australian Taxation Office (ATO) have highlighted the fact that self-managed super fund (SMSF) trustees are adopting a responsible approach to how they use their superannuation savings to live in retirement, according to Graeme Colley, director, technical and professional standards for the SMSF Professionals' Association of Australia (SPAA).
In fact the reality, according to Colley, is that in the five years to 30 June 2012, benefit payments from SMSFs averaged $18.9 billion a year.
"The importance of this number is the fact that by far the biggest percentage of these payments are made as allocated or account-based pensions - and this figure is growing," he said.
"In 2008, all pension payments totaled 64 per cent but by 2012 this figure had grown to 72 per cent, with the average benefit payment being $99,000 a year and the median payment $52,000 a year.
"From SPAA's perspective this is strong evidence that SMSF trustees are using their superannuation correctly," Colley continued.
"They are funding their retirement in a responsible way by drawing income streams when they reach retirement."
Colley said that he hoped such statistics were a nail in the coffin for yet another SMSF myth: that SMSF members take their superannuation as a lump sum as soon as they can and then go on to the aged pension.
"The situation in the ATO statistics shows quite the opposite," he said. "They are looking at their SMSFs in their totality so as to be self-sufficient in retirement, appreciating they are, on average, going to live for about 20 years in retirement."
Colley also pointed out that there were more new SMSFs paying pensions in their first year of operation, with an increase of 15 per cent in the number of new funds over the five years to 30 June 2012.
"This would suggest people want to take direct responsibility for handling their retirement incomes, a trend SPAA encourages," he said. "Our only proviso is that these people appreciate everything that's involved in being an SMSF trustee, and, if necessary, seek professional advice."
Originally published by SMSF Essentials.
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