SMSF options in pension phase
Self Managed Superannuation Fund trustees are just well place in the pension phase as those in conventional funds, and may even enjoy greater flexibility during periods of market volatility, according to Peter Crump, Superannuation Strategist for ipac South Australia.
"They're probably even more flexible in pension phase," he said. "In the first instance, you move from a tax concessional environment to an even better tax environment, which is either more tax free in terms of exempt investment income or fully tax free."Next in the list, according to Crump, is the ability to reset some of the tax components from an estate planning perspective by drawing money out.
"And if you're either below 65 or still working, you can put money back in and recirculate money under the withdrawal re-contribution process," he added. "Thirdly, you have the flexibility where you can actually start to contemplate the direction of your eventual benefit payments or pension payments for estate planning purposes."
For Crump, the perception of agility during pension phase can be a significant drawcard and is probably a large part of the reason behind SMSF start ups occurring in the years leading up to retirement.
"People want to be more agile and that agility is hard to achieve at a fund where you're not the trustee," he said. "For example, stopping and resetting pensions involves a series of paperwork in a public offer fund but it involves simple paperwork in a self managed fund."
"In many cases, its a perception rather than reality but people believe that they have greater agility and convenience."
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