Self-Managed Super Fund Members Retire with Higher Balances
According to new research from accountancy software provider Class, Self-Manager Super Fund members are retiring earlier and with larger member balances than their counterparts in public offer funds (i.e. retail, industry super).
In the recently released “2024 Annual Benchmark Report,” Class revealed that members aged 60 to 64 in Self-Managed Super Funds are 2.7 times more likely to utilise a transition-to-retirement income stream (TRIS) or retirement-phase income stream than those in public offer (APRA regulated) funds during the 2023 financial year.
Tim Steele, CEO of Class, highlighted that Self-Managed Super Funds continue to be the preferred choice for members approaching retirement. In last year’s report, it was shown that only 12.2 percent of Self-Managed Super Funds members aged 65 and older remained in the accumulation phase.
“Nearly 93 percent of Class Self-Managed Super Fund members over 65 have set up a pension, compared to just 49 percent of APRA fund members,” Steele noted at Class Ignite 2024 in Sydney last week.
“Our data indicates that members aged 60 to 64 are increasingly seeking to use TRIS and retirement-phase income streams, reflecting a proactive approach to their retirement planning.”
The report also revealed that over a quarter (26 percent) of Class Self-Managed Super Fund members aged 60 to 64 have moved their balances into tax-free retirement-phase income streams, in contrast to just 8.2 percent of APRA fund members.
“This trend suggests that Self-Managed Super Fund members are more attuned to the tax benefits of income streams and are more likely to adopt or maintain an income stream strategy both before and after retirement,” the report stated.
Additionally, Self-Managed Super Fund members are entering retirement with significantly larger balances, with the average TRIS balance for Class members at $581,817, compared to $208,798 for those in APRA funds.
The report draws on data from Self-Managed Super Funds on the Class platform, the ATO, APRA, and insights from industry experts.
This information is intended as a guide only and professional advice should be sought for individual circumstances.