The head of an actuarial research firm has predicted that SMSFs incorporating older husband-and-wife couples as members will continue to have significant appeal despite a increasing trend towards a number of younger individuals committing to running their own super fund.
“For husbands and wives this will [still] be a popular vehicle because as people get older, and they move into retirement and have an account-based pension, they’re likely still to want an accumulation account, they might be working part-time or they might be lucky and be above the pension transfer balance,” Rice Warner executive director Michael Rice said during a thought leadership session at the virtual SMSF Association National Conference 2021 today.
“So to get those four accounts with all the assets pooled is something you can’t do in an APRA (Australian Prudential Regulation Authority) fund.
Rice pointed out having married couples in SMSFs would also present an opportunity for improving the superannuation experience of their children by eventually including them as members in the fund.
“Many of us probably think if we’re going to live until we’re 80 or 90, our kids are going to be retired when they inherit all our money, [and] there are techniques to start building their super balances,” he said.
One technique he singled out was for parents to withdraw some of their existing superannuation benefits and gift it to their children so they can in turn make a non-concessional contribution with the gifted monies back into the SMSF.
“That’s a lot easier to do if [their children] are in the same vehicle,” he noted.
“So I think that will be one trend. There may be others, but given the low cost of running an SMSF, if you’ve got a reasonable balance, I think that the demographics will expand and more and more people will see this as attractive.”
