Depends on how much longer you think you will live!You probably...

Depends on how much longer you think you will live!

You probably have some assets in your super fund that will be taxable (if assets are distributed to non-dependents). My understanding is that the death of a single member will not trigger a tax liability if that member has specified the other member as the beneficiary, though. So if you nominate your spouse, then final dispersal can be delayed.

You should find out what percentage of assets will be subject to tax and what the rate of tax would be. There is going to be a trade-off between tax minimized in SMSF, as compared with tax paid when distributed to non-dependents.

Tax payable is as follows:

Tax-free component 0%
Taxable component - taxed element 16.5%
Taxable component - untaxed element 31.5%

I have only a taxed element in my fund. You should see this on your member benefit statement.

As you have an Allocated Pension one consequence is that you are limited to a maximum payment - hence the lump sum option (c.f. Account-Based Pension which is totally flexible with payments).

As a SMSF exists only to minimize tax, this is what you should focus on. If your income from SMSF is $60,000 split 50:50, then for the equivalent outside of super you would be paying close to zero tax (after allowing SMSF admin expenses). Obviously, as your income increases the tax savings will increase.

If you are not planning to depart this world soon, then there is no need to rush into any decision.

However, at some stage the life of the SMSF should be addressed. If a member of the SMSF dies, then another trustee must be appointed. If that member administers the fund, who is going to take over? A corporate trustee is more flexible, but I would argue doesn't solve the problem of who is running the fund.

As every year passes I can see there will come a time when I will have lost interest in running my SMSF, and don't want to burden my children with the job. At that stage I may also have lost interest in investing, and will probably just pay out the members, close the SMSF and put the money into cash - and hopefully pay some modest tax.