SMSF trustees “responsible” approach to SMSF funds: ATO

Australian Taxation Office figures highlight the fact that SMSF trustees are adopting a “responsible approach” to how they use their superannuation savings to live in retirement.

Graeme Colley, Director Technical and Professional Standards, of the SMSF Professionals’ Association of Australia (SPAA), says 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.

“In 2008, all pension payments totalled 64%. But by 2012 this figure had grown to 72%, 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. They are funding their retirement in a responsible way by drawing income streams when they reach retirement.

“Hopefully, these numbers are another nail in the coffin to the myth that says 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. 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 says there are more new SMSFs paying pensions in their first year of operation, with an increase of 15% 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. Our only proviso is that these people appreciate everything that’s involved in being an SMSF trustee, and, if necessary, seek professional advice.”

The post ATO figures highlight SMSF trustees ‘responsible’ in retirement appeared first on AdviserVoice.