As some Australians get older and begin to approach retirement they may face the challenge of finding a suitable person to look after their retirement assets.
This issue highlights the possibility that many DIY super funds could have a use-by-date. As Australians become older many may no longer have the interest, desire and eventual ability to maintain sufficient knowledge to continue to manage their DIY super fund. Research has shown that a quarter of the population might eventually suffer moderate or severe health problems that will affect their capacity to manage their DIY super fund.
However, the remaining 75 per cent often have enough time to prepare themselves and consider their options for the future.
Here are some options when considering the future of the DIY super fund:
- Trusted professional advisor One option to consider is relying on a trusted advisor to take over the responsibility of looking over the fund. An advisor would be able to give specialised investment advice and would also have a good knowledge of DIY super funds and their maintenance. However, it may not always be possible to find a suitable advisor to give the level of service required.
- Public super fund Another possibility is to move out of a DIY fund and back into a public offer super fund. However, this move will require research and careful consideration. The decision to move into a public super fund would need to be considered earlier, rather than later.
- Adult children – Adding children to the family’s DIY super fund would allow them to contribute their own super into the fund. This would allow them to become involved in the running and maintenance of the fund, and ultimately becoming the dominant members in place of their parents. The decision to add adult children to the DIY super fund would need careful consideration.
The children would need to show an interest in taking a significant role in the running of the fund. There is also always the chance that children could change the fund’s investments arrangements.
- Investments – Also, there is the possibility of leaving the DIY fund in favour of retirement investments, such as annuities that pay a guaranteed income for the rest of the investor’s lifetime.