Australians heading into face a tough decision on how to access their hard-earned . The question is: Should you opt for a lump sum, an income stream, or a combination of both? And just like every broad-based question in life, it circles back to the cliched but truthful answer: "It depends". That's not ideal for someone seeking a more definitive answer, but what you can do is understand the pros and cons of both routes to obtaining your money.
Here's a breakdown to help you make an informed choice. Options for accessing superannuation When you retire, you can withdraw your super as a lump sum, convert it into an income stream, or combine the two. Each approach offers unique benefits and trade-offs.
A lump sum gives you immediate access to your entire super balance, which you can use to pay off debts, invest, or enjoy some long-awaited luxuries. all funds offer this option. According to MoneySmart, this superannuation option can be appealing if you have high-interest debts or want to make significant one-off purchases, such as downsizing your home.
But spending large amounts upfront could deplete your super faster than expected, potentially leaving you with fewer funds for later years. Investing outside super might also expose you to higher tax rates than those within the super system, especially when buying and selling shares or property. It really depends on what your estimated annual living expenses might be.
This includes things like holidays and medical appointments, and y.
