Putting money into super.

I don't have any superannuation and am 60 years old with no income or Centrelink payments. I have been given $100,000 and am wondering should I set up a SMSF and put this into it or should I put it into a managed super fund.

How much can I put in prior to June 30th? What are the implications of putting the $100,000 into a fund?

Hi Helen,
There are lots of variables here that need to be tailored to suit you. Whilst I am not a financial planner, I don't think that an SMSF would be efficient with that amount of money due to the cost of set-up and compliance. You may be able to purchase an annuity that would give you some regular income?
Best to go and sit with a trusted financial planner who will give you some options
Good luck
Regards
Scott

Dear Helen,

This all depends on your investment strategy. Im assuming if you have no income, ideally you are looking to get a positive cash flow from the $100,000 to live off now. Is that correct? I would be happy to discuss investments that will get you above 8% return per year.

You can only contribute $35,000 into your superannuation before 30th June. From 1st July it will be $25,000 per year.

Hope that helps.

Hi Helen,
You are able to put money into super regardless of work or not under the age of 65. The limit for the type of contribution you are looking to make is currently $180,000. This will drop to $100,000 from 1 July 2017.

If all you have to put to super is $100,000 you will likely find the administration burden and cost of an SMSF too much, compared to other super funds.

The other thing to consider is do you have the expertise to manage the money or can you pay someone for this or would you be better off leaving it to one of the big super funds.

There's lots to consider and best if you seek professional personal advice to determine what is best for you. Taking into account you're overall position and plans for the next few years.

Regards
James

Hi Helen,

I agree with James. SMSF does provide lots of flexibility, though from quick thinking about your situation I'd bet a retail / industry super fund is the way to go for you.

I am curious why you wouldn't be receiving any sort of assistance from Centrelink - is it the $100,000 that's the issue, though typically the asset limit for Newstart is $250K for homeowners and $450K for renters (singles).

One thing I'd ask you to look into very carefully is the cost of the financial advice you receive. With the greatest of respect, $100K in super is a very modest amount to last you a lifetime so try to find a completely independent financial adviser and then for advice when you need it and not an annual % of your balance. Then shop around for a super fund - some have very, very low fees.

Damien
Squirrel