One of the most crucial financial decisions you can make throughout your lifetime is knowing how to manage your superannuation.
In Australia, superannuation is a vital part of retirement planning, helping ensure that one has enough funds once one stops working.
But you should review your super fund after retirement and change it for a better plan that suits your financial goal. Well, let’s find out more from our blog post below as follows;
Why you might want to change your super fund after retirement
One may want to change their superannuation fund after retirement for a variety of reasons, such as;
Better fees and investment options
Not all super funds individuals opt for have friendly charges; some have high fees that eventually consume people’s savings. This gives most people reasons enough to switch to a fund offering more reasonable investment charges.
More control over investments
Nothing beats the joy of taking control of your super investments as a retiree. It helps you live a deserving retirement lifestyle that everyone desires. If you want to experience this kind of freedom, choose a super fund with a self-management (SMSF)option.
Improved customer service
People prefer using companies that offer better customer experience, knowing that their needs will be taken care of. This will assure retirees that they will get great advisers to help them manage their retirement income well.
Consolidate super funds
Having many super funds throughout one’s working life will make one want to consolidate all of them into one fund. This is because managing one fund is more straightforward than having a couple and helps simplify a retiree’s financial life.
Step-by-step guide on how to change your super fund after retirement
Are you looking to change your super fund? If so, then here’s a quick step-by-step guide on how you can do it;
Review your current super fund.
First, before you decide to change your super fund, you must review your current fund to assess the fees and investment options, among other features. If you are not sure what to do, contact your financial adviser to help evaluate whether the fund is still the best option or you should change.
Consider your options
Consider your options by conducting research that will help you figure out which fund is best for you.
This could include information on fees, charges, returns, or even investment options and finding one that suits your needs.
Contact your new super fund.
Once you’ve decided on a good super fund, contact them and get to learn about their transferring process. Take note of each step to avoid making mistakes.
When transferring funds, make sure to;
- Confirm if there are any exit fees or transfer fees with your current super fund.
- Check for any waiting periods before you can access your super funds from the new fund.
- Ensure the new fund accepts your existing balance, especially if you have a large super balance.
Transfer your super balance.
Once you’ve mastered all the process and done the paperwork accompanied by changing funds, let the new super fund handle the transfer of your balance from the old fund. Ensure that all outstanding payments and charges, if you have any, have been sorted out before allowing the transfer to take place.
Update your withdrawal details.
Update your new superfund about withdrawals made through a pension or lump sum for your super. Let them know how you’d prefer to receive income, i.e., whether quarterly or monthly.
Monitor your new super fund.
It is always important to monitor and track your new super fund to see how your investments are performing. Review each statement regularly to stay informed about how the funds are being managed and whether they are aligned with your goal.
What to keep in mind when changing your super fund after retirement
Having to change your super fund is a big deal, and before you do that, there are several things you should keep in mind;
Exit fees
Before you exit, you need to understand that there might be charges. Some super funds charge individuals an exit fee.
Tax implications
Be aware of potential tax implications and consequences brought about by switching funds.
Impact on your retirement income
Always check to confirm that the new fund you want to move to can provide you with the income you need to support your retirement. Consider a super fund that can provide a regular income stream, such as a pension.
Insurance
If insurance coverage is provided through your previous super fund, such as income protection or total permanent disability, ensure that the new super fund offers similar or better coverage.
Wrapping up
Changing your super fund is a strategic move that can financially change one’s retirement life. Whether you are looking for a low fee, more control over your investment or better services, there will always be a super fund suitable for you. Seek professional advice from a registered tax advisor to help you.
