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What to do with super in retirement

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I’m 61 and am about to end my working days. What shall I do with my super?

This is the shortest question I have had on record, but the answer will be a whole lot longer. Let’s be clear on this – the laws governing financial planning mean I can’t give you specific advice but I can generally tell you what usually happens when someone retires and plans to live off their superannuation proceeds.

If you are in a defined benefit super fund, which many public servants are in, you will receive your benefit, which some people see as a ‘pension’ but it is really a defined benefit.

These are usually adjusted for inflation and go on until your final day on this earth. Most super nowadays gets converted into an allocated pension. An allocated pension is simply an income stream that you receive from your super fund when you retire and are over 55. This simply means that say each month or other period, you nominate cash that is transferred to your bank account for you to fund your living expenses in retirement.

I recommend contacting your super fund. Tell them you want to be briefed on what happens when you switch from super to an allocated pension.

There are also term pensions but they aren’t as popular as allocated pensions and a September deadline on these make them less relevant for your purposes. By the way, you could invest your super money yourself but you would want to be an expert to beat the returns and the relative safety of an allocated pension.

For advice you can trust book a complimentary first appointment with Switzer Financial Services today.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

Published on: Wednesday, May 04, 2011

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