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Why retirees can spend more of their super than they think
Retirees in 2023 are grappling with a peculiar challenge that needs solving: once in retirement, most people fear running out of money so much they only draw the minimum amount required.
This article appeared in the Sydney Morning Herald, The Age, Brisbane Times and WA Today on Sunday 13th August 2023, in both print and digital
Retirees in 2023 are grappling with a peculiar challenge that needs solving: once in retirement, most people fear running out of money so much they only draw the minimum amount required from their super funds.
I suspect that’s because we don’t really understand that our super funds come into their own in the retirement phase – usually generating better returns than in accumulation – giving us the opportunity to consider drawing more retirement income than the minimum.
Retirement phase (formerly known as pension phase) is when superannuation performance is most important, as it is the time of life when your fund makes the largest amount of money through compound investing. In fact, for most people, between 50 and 60 per cent of your total funds in superannuation are generated during your retirement years.
So today we’re delving into the performance of retirement phase funds this year, and comparing the returns funds are making with the superannuation drawdown limits, and why you might consider drawing more than the minimum from your super fund in retirement.