Unlike a retail or industry superfund, a Self Managed Super Fund (SMSF) lets you (as a trustee) decide how your fund is managed and control where your money is invested. It can offer greater transparency of your retirement savings and how your wealth is tracking. It also offers flexible investment options and helps you achieve the retirement lifestyle you deserve.
1) You’re in control
SMSFs let multiple members run a mixture of accumulation and pension accounts. Trustees can adjust their investment mix when it suits them, so they can respond to market changes, super rules or personal circumstances.
2) Flexible investment choice
When compared to other super funds, SMSFs offer more investment options.You can access direct shares, high-yielding cash accounts, term deposits, income investments, direct property, unlisted assets, international markets, collectables and more
As with all super funds, concessional tax rates apply to SMSFs. This means that while your SMSF is accumulating, tax on investment income is capped at 15 per cent. But in the pension phase no tax is applied, not even capital gains tax. Using effective tax strategies can help you grow your super savings and reduce tax payments as you transition to retirement.
SMSFs offer significant transparencies that allow trustees to align their personal goals with their investment decisions. Whether you’re passionate about property, shares or sustainable and ethical investing, SMSFs allow you to better understand where your money is invested, with complete visibility over performance and tax treatment.
5) Combine super assets
An SMSF allows a trustee to combine their super assets with up to three other members (such as partners or family members). Consolidating super accounts creates a larger fund balance. This increases the fund’s assets and investment opportunities – with only one set of fees.
If you have a SMSF, you must lodge an annual tax return and audit, and pay any associated ATO fees (these are capped, they are not based on a percentage of your super balance). The more an SMSF grows, the more cost effective it becomes. However, the total cost of running an SMSF will depend on the related investments and any costs associated with engaging professional advice.
Will an SMSF suit you?
As you can see there are many benefits to an SMSF, but there’s also risks and responsibilities. These include trustee responsibilities, cost-effectiveness and insurance cover.
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