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SMSF Pension Advice

Maximize Your Retirement with Expert SMSF Pension Advice and Strategies

New Wave SMSF.

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SMSF and Pensions

Pension advice is an important aspect of managing a self-managed superannuation fund (SMSF) in retirement. The transition to pension phase involves the conversion of the SMSF assets from the accumulation phase to the retirement phase, where the fund starts paying income streams to the members. 

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There are several types of pension options available for SMSFs, including account-based pensions, transition-to-retirement pensions, and defined benefit pensions. Each pension option has its own unique features and benefits, and the choice of pension type will depend on the specific circumstances of the SMSF members.

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It is essential to seek professional advice when transitioning to pension phase, as it involves complex financial and tax considerations. An SMSF advisor can provide guidance on the appropriate pension type, the minimum and maximum pension payments, the tax implications, and the impact on the SMSF investment strategy.

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In addition, ongoing pension advice is necessary to ensure that the SMSF complies with the pension rules and regulations, such as the minimum pension payment standards, the transfer balance cap, and the treatment of death benefit pensions.

 

Overall, seeking professional pension advice can help SMSF members optimize their retirement income, minimize tax liabilities, and ensure compliance with regulatory requirements.

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SMSF Transitition to Pension

Transitioning to a pension in a self-managed superannuation fund (SMSF) can be a complex process, but it's a crucial step towards enjoying a comfortable retirement. When a member of an SMSF reaches retirement age, they have the option to begin drawing down on their superannuation savings as a regular income stream or lump sum payment. This is known as transitioning to a pension. 

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There are many benefits to transitioning to a pension in an SMSF, including potential tax savings and the ability to access your superannuation in a flexible manner. However, there are also strict rules and regulations that must be followed to ensure compliance with the law. 

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Some key considerations when transitioning to a pension in an SMSF include calculating the minimum and maximum pension payments, determining the most tax-effective way to structure the pension, and ensuring that the SMSF's investment strategy is appropriate for the pension phase. 

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At New Wave SMSF, we offer expert SMSF pension advice to help our clients navigate the complex process of transitioning to a pension. Our team of experienced professionals can help you understand your options, develop a tailored pension strategy, and ensure that your SMSF is compliant with all relevant regulations. Contact us today to schedule a consultation.

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SMSF Actuarial Certificates

An actuarial certificate is a report prepared by an actuary to calculate the tax-exempt percentage of income earned by an SMSF that pays pensions. This is required because only a portion of the income earned by the fund is taxed once it begins to pay a pension.

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An actuary will use various factors to calculate the tax-exempt percentage, including the member's age, the size of their pension account balance, and the proportion of the year in which the pension was paid. This percentage will then be used to calculate the fund's tax liability.

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Actuarial certificates are important for SMSFs paying pensions as they ensure the fund is complying with the relevant taxation laws. Failure to obtain an actuarial certificate when required can result in the fund incurring significant penalties.

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At our firm, we can assist with obtaining actuarial certificates for your SMSF and provide advice on any tax implications of transitioning to a pension. Our team of experts can also provide guidance on how to structure your SMSF to maximize your retirement income and minimize your tax liability. Contact us today to learn more about our SMSF pension advice services.

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Pension Preservation Age

Pension preservation age is the minimum age at which you can access your superannuation benefits in the form of a pension. As of 2023, the preservation age will be 60 years for individuals born after 30 June 1964. For those born before this date, the preservation age varies between 55 and 60. 

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It is important to note that even if you have reached preservation age, you may not be able to access your superannuation benefits as a pension until you have met other conditions of release. This could include retiring from the workforce, reaching age 65 or meeting certain medical criteria.

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When considering transitioning to a pension in a self managed superannuation fund, it is important to seek professional advice to ensure you are making the right decisions for your retirement goals and financial situation. A qualified financial advisor can help you understand the rules and regulations around pensions, including the tax implications and potential benefits of transitioning to a pension.

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Which Pension should you commence?

When transitioning to pension phase in a self-managed superannuation fund (SMSF), it is important to consider which type of pension to commence. The two main types of pensions are account-based pensions and defined benefit pensions. 

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An account-based pension pays an income stream based on the account balance, while a defined benefit pension pays a set income amount based on factors such as length of service and salary. 

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The choice of pension will depend on individual circumstances, such as retirement goals, financial needs, and risk tolerance. An account-based pension may provide more flexibility, as the income stream will fluctuate based on investment returns and can be adjusted as needed. A defined benefit pension may provide more certainty, as the income amount is fixed and guaranteed by the fund. 

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It is important to seek professional advice when considering which pension to commence, as there may be tax and regulatory implications to consider. An experienced SMSF adviser can provide guidance and help you make an informed decision.

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Recent News

  • What services do you offer?
    New Wave SMSF financial planners offer a wide range of services to help clients manage their self-managed superannuation funds (SMSFs). Some of the services we offer include: SMSF set-up: An SMSF financial planner can assist clients with the establishment of a new SMSF, including the preparation of trust deeds, appointing trustees, and registering the fund with the Australian Taxation Office (ATO). Investment strategy development: SMSF financial planners can work with clients to develop an investment strategy that is aligned with their financial goals and risk appetite. This includes selecting investment assets, determining asset allocation, and monitoring investment performance. Compliance and administration: SMSF financial planners can help ensure that clients' SMSFs remain compliant with regulatory requirements, including the preparation and lodgement of annual tax returns, financial statements, and other reporting obligations. Retirement planning: SMSF financial planners can help clients plan for their retirement income needs, including determining their retirement goals, estimating retirement expenses, and developing a strategy for drawing down on their SMSF assets. Estate planning: SMSF financial planners can assist clients with estate planning, including the creation of binding death benefit nominations, the establishment of testamentary trusts, and the development of succession plans. Risk management: SMSF financial planners can help clients manage risk within their SMSFs, including insurance needs analysis, the selection of appropriate insurance products, and the development of risk management strategies.It’s a great way to help people navigate your site and can even boost your site’s SEO.
  • Is an SMSF the right choice for me?
    Whether an SMSF is suitable for you depends on various factors such as your financial goals, investment experience, and the time and resources you have available to manage the fund. Our financial planners can help you assess whether an SMSF is the right choice for your individual circumstances. Book in a free 30 Min consult today.
  • What are the investment options available to me in an SMSF?
    SMSFs offer a broad range of investment options, including direct property investments, shares, managed funds, and term deposits. However, trustees need to ensure that their investments are in line with their investment strategy and comply with regulatory requirements. Our Gold Coast SMSF Financial Planners can assist with guiding you towards the right investment strategy
  • How much super is recommended to start an SMSF?
    The amount of money required to start an SMSF will vary depending on your individual circumstances, goals, and investment strategy. While there is no minimum amount required by law to establish an SMSF, most financial experts suggest that you should have at least $200,000 to $500,000 in superannuation savings to make an SMSF cost-effective. Before deciding to start an SMSF, it's recommended to seek professional financial advice to ensure it's the right choice for your individual circumstance
  • What accounting services do you offer?
    New Wave SMSF is a forward thinking accounting firm providing tailored self managed superannuation fund (SMSF) services on the Gold Coast and across Australia. We assist clients with: Accounting, Structuring, SMSF Software, SMSF Setup, Tax, BAS, Compliance, SMSF Bookkeeping and Tax Advice. At New Wave, our mission is to empower, excite and build confidence in SMSF's by providing clarity in their figures.
  • What are the costs involved in setting up an SMSF?
    The costs of setting up an SMSF can vary depending on the complexity of the fund, the number of members, and the services required. Typically, the setup fees can range from $1,000 to $3,000, while ongoing costs can range from $2,000 to $3,000 per year. We can provide you with a fixed fee quote based on the size and complexity of your work.
  • What are the rules and regulations around SMSFs?
    SMSFs are regulated by the Australian Taxation Office (ATO) and must comply with the Superannuation Industry (Supervision) Act 1993 (SIS Act) and the Superannuation Industry (Supervision) Regulations 1994 (SIS Regulations). The rules cover various aspects of SMSF management, including trustee duties, investment restrictions, contribution limits, and reporting requirements.
  • How do I ensure compliance with ATO regulations?
    To ensure compliance with ATO regulations, SMSF trustees need to maintain accurate and up-to-date records, prepare and lodge annual returns, and follow investment restrictions. Engaging an experienced SMSF accountant can help ensure compliance with ATO regulations and provide peace of mind.
  • What are the tax implications of having an SMSF?
    SMSFs enjoy concessional tax treatment, with income earned within the fund taxed at a maximum rate of 15% (or 0% if in pension phase). Additionally, SMSFs may be eligible for capital gains tax (CGT) discounts if assets are held for longer than 12 months. However, there are various tax rules and regulations that SMSF trustees need to be aware of to avoid penalties and fines.
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