When we look at what SASS members are choosing to do with their benefit on retirement there are some clear trends. Nearly 80% per cent of members opting to stay invested with a super fund rather than take a lump sum. In this article we explore why super is potentially a good fit for SASS members in retirement.
Super gives you more options to flex your investment muscles
For generations, Australians have thought of property investment as the go-to strategy for securing their financial future. The idea of buying a rental property, living off the income, and eventually selling for a profit seems straightforward.
Like all investments, the reality is more complex. Once you leave SASS, you are essentially taking full control of your investment strategy. Typically, investing in property limits you to one or a few properties, resulting in a concentrated investment in a single asset class. In comparison, investing through super gives you investment options across various asset classes, such as shares, property, and fixed income. Plus, your investment strategy is managed for you by retirement experts who understand how to manage retirement risks and generate a stable income.
The table below provides a comparison, highlighting the key differences and potential benefits of each approach.
Scroll table horizontally on mobile
| Key consideration | Property Investment | Investing through super for retirement |
|---|---|---|
| Initial Investment | Investment amount determined by the market (purchase price, stamp duty etc) | You choose how much super to convert to an account-based pension |
| Taxation | Capital gains tax on sale, rental income tax | Tax-friendly environment, with zero tax on investment earnings in retirement (up to a balance cap) and on withdrawals after age 60 |
| Diversification | Limited to property market | Broad diversification across asset classes |
| Liquidity | Lower (selling property takes time) | Higher (easier access to funds) |
| Ongoing Costs | Maintenance, insurance, property management fees | Low fees, no maintenance costs |
| Income Stream | Rental income, potential capital gains | Regular, tax-effective income payments through account-based pension |
| Risk Management | Dependent on individual investor | Professional risk management strategies |
| Investment Expertise | Requires self-education or reliance on external advisors | Managed by professional investment managers |
| Borrowing | Ability to leverage investments with loans | No borrowing for investment purposes |
| Time Commitment | Active management required | Passive investment option |
Investing in property with Aware Super
When you invest with Aware Super you can benefit from direct property investment without having to become a property manager yourself.
Watch this short video to find out more.
Invest with the retirement experts
As a SASS member, at retirement you have the opportunity to transfer some, or all, of your benefit to another super fund and into a retirement income stream account, also known as an account-based pension. This account provides regular income payments during your retirement years, and just like with investments outside of super, you get to choose how your money is invested.
At Aware Super, we understand that investing your retirement savings can be a daunting task, which is why we have a team of retirement experts who can help you navigate the complex world of retirement investing. If you don't make an investment choice when you open a retirement account with us, we'll invest your super in our Conservative Balanced Option.
Our Conservative Balanced Option has been designed with the needs of retirees in mind. It aims to take a balanced approach towards delivering long-term returns . About 50% of our retired members choose to invest their super in this option, which reflects the confidence they have in our investment approach.
Aware Super has a large and well-resourced team of over 100 investment professionals managing the risks and opportunities in the market. In fact, we are one of the largest providers of dedicated retirement investments in Australia. We’re also one of the longest standing retirement investors. Our investment approach aims to deliver outcomes to help our members retire with more. We aim to invest in a mix of good quality assets. This helps you to grow and protect your super savings.
Like all big financial decisions, choosing what to do with your super makes sense when you can think about it in the context of your lifestyle and plans for retirement. If you need help deciding what to do with your SASS benefit, an Aware Super financial planner can review your personal circumstances, talk you through each option and ultimately help you make a more informed decision.
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The right choice today could mean a big difference to your future.
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At Aware Super, we are experienced in your State Super scheme and know the ins and outs of planning for a successful retirement.
To help you make better decisions for your retirement, book today for a no cost, obligation free appointment with an Aware Super financial planner.
The information contained in this article is given in good faith and has been derived from sources believed to be reliable and accurate. No warranty as to the accuracy or completeness of this information is given and no responsibility is accepted by Aware Super Pty Ltd or its employees for any loss or damage arising from reliance on the information provided.
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