What to do with superannuation?

14th Nov 2009 by Tobias John Sterling

Once you meet the conditions for release, you'll be able to withdraw your superannuation as a lump sum. So what do you do with your superannuation now? Well, whatever you like, but many people in fact choose not to withdraw their super as a lump sum at all. The other option is to draw down on your superannuation slowly in the form of a pension or annuity (pensions can only be 'purchased' from superannuation funds with superannuation money, whereas annuities can be purchased from life insurance companies using superannuation or ordinary savings). There are a number of good reasons for this. First, it continues the regular payments that we all get used to during our working lives. Second, it removes the risk that you'll waste all or part of the capital on an unnecessary impulse purchase. Third, it means that the trustees of your superannuation fund are continuing to make investment decisions on your behalf on your remaining capital, and presumably they're better at it than you would be.

This answer is the subjective opinion of the writer and not of FinancialAdvisory.com