If you work in Australia, then you are likely to have at least one superannuation account set up to help you out financially during your retirement. All employers in the country are required to contribute a set amount out of each employee’s pay cheque to their super account. You are also able to make contributions to the account throughout your working life.
These funds will sit in your super account until you reach at least 60-years old. If you are over 60-years old and you are no longer working, you may be eligible to start receiving funds for your super account. Otherwise, you will need to wait until you are 65-years old to receive these funds.
Super Fund Options
Once you are eligible to start receiving your superannuation funds, you will have three disbursement options. You can select to leave your super funds remain in the account untouched until later, you can invest these funds in a retirement income stream, or receive a lump-sum or regular instalments of your funds. Below is a closer look at these three options.
- Leave Super Funds in Account. If you have reached the age where you can start withdrawing funds from your super account, but do not really need them just yet, it may be a good idea to just let them sit in your account. This will provide more money for you later on down the road when you may be in need of additional funds. The downside is any investment portions of this money may be taxed at a higher rate than other methods.
- Invest These Funds. You can also select to transfer some of these funds to a pension investment stream. This can provide a great investment opportunity for those who can afford to transfer a portion of their funds. This investment is taxed at a lower rate and can increase your savings. However, there is always a risk involved in any type of investment, and the government sets minimum amounts that you must transfer to these funds.
- Start Withdrawing Funds. Your third option is to start withdrawing funds from your super account. You can request a one lump-sum payment for the total amount of funds in your account, or receive regular payments for years to come, or a combination of both. It is not advisable to withdraw your entire super account funds unless you have a clear plan for how to utilise these funds.