Is An SMSF The Right Answer For You?
SMSF are always very topical and sometimes confusing. The MB+M Wealth Creation Team brings you this article from the SMSF Association that explains: “Is An SMSF The Right Answer For You? The team is always available to help answer your questions.“
With over 1.1 million Australians choosing to manage their own Self Managed Super Fund, it has become a popular option for those wanting more control over their retirement savings.
A Self Managed Super Fund gives you, as the Trustee, the ability to put retirement planning into your own hands.
The long-standing debate when comparing an SMSF to a
traditional superannuation fund is typically restricted to a
simple analysis of cost and returns; but in reality, it’s never
It also comes down to your motivations, your desire for
control and your own personal retirement goals. Yes, an
SMSF isn’t right for everyone – it must be considered on a
case by case basis – but it’s important to have all the facts
and information at hand so you can make the right decision.
“Lower fees, More control, Better choice,
WHY CHOOSE AN SMSF?
SMSFs enable you to take control of your financial future. The desire to gain greater control over superannuation assets and investments is the leading motivation for the establishment of SMSFs. As a trustee, you are responsible for making decisions on where your money is invested. Control lies in your hands. Your money. Your choice.
You control the fees, and you control the ability to achieve higher returns. It is this sense of comfort, confidence and security in managing your own affairs
Flexible investment choices
SMSFs provide the ultimate level of investment flexibility and choice. In addition to shares, fixed interest, and managed funds, SMSFs can offer increased flexibility, enabling you to invest directly into property, commodities, unlisted companies, and unlisted managed funds and trusts. This can even include your own small business property.
This ability to create a diverse, tailored portfolio is unmatched when compared to institutional superannuation funds.
Dissatisfaction with your existing fund
Taking control of an SMSF also means that trustees have oversight of their superannuation savings at all times. Many people decide to set-up an SMSF because they are dissatisfied with the performance of their existing superannuation fund. The fees may be too high or the investment options too restrictive. They may want more transparency over the fees they are paying or have more control over things like corporate actions.
Plan your tax
SMSFs can also provide additional flexibility to manage the tax paid by your fund. The flexibility of an SMSF allows individuals to control the timing of contributions and the purchase and sale of investments to achieve the best retirement savings outcome for members. SMSFs also provide for a seamless transition from accumulation to pension phase.
Plan your estate
With proper planning, and if structured correctly, an SMSF can provide additional flexibility and certainty regarding when, and to whom, death benefits are paid from your retirement assets.
DID YOU KNOW?
- Around half of all SMSF trustees own or have owned a small business 2
- 9 out of 10 trustees believe managing and engaging with their own SMSF provides them with a level of satisfaction 3
- The median “operating expense” of SMSFs is $3,923 a year 3
- The majority of SMSF trustees spend between 1 to 5 hours a month administering their SMSF 2
- The most common age range for establishing an SMSF is between 35 and 44 3
- SMSFs can be cost effective at balances of $200,000 or more ₁
- Over 50% of SMSF members have had their SMSF for over 10 years 2
There are strict regulations surrounding SMSFs. Aside from the annual audit of your SMSF, which must be done by an independent Approved SMSF auditor, you can choose the level of compliance and administration work you outsource to others – but as the trustee of your SMSF you remain ultimately responsible for ensuring your SMSF complies with the superannuation and taxation laws.
The ATO and specialist SMSF advisers are there to help.
1: See Cost of Operating SMSFs (2020)
2: Source: SMSF Member Experience Survey 2020 by SMSF Association
3: Self Managed Super Funds: A statistical overview 2017-18
“I enjoy making decisions,
and the satisfaction of
knowing the outcome
is in our hands”
Managing super can be complex and there are many rules to understand. Even if you enjoy managing your own superannuation, we recommend an objective review of your superannuation and retirement plans to help you take advantage of contributing to your super for as long as you can.
Alternatively, it may be time to hand over the management of your superannuation – talk to us now to learn more about maximising your super contributions and making the administration of it easy. Call MBM/OzPlan and speak to a highly experienced Certified Business Adviser.
Our commitment at MB+M/OzPlan is to help you achieve the investment outcome you desire and making your life easier…..
Article Source: Is An SMSF The Right Answer For You?
This publication has been compiled by OzPlan Financial Services, ABN 35 005 391 202 AFSL 221235 and is current as at time of preparation, January 2021
Material contained in this publication is an overview or summary only and it should not be considered a comprehensive statement on any matter nor relied upon as such. The information and any advice in this publication do not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. This publication may contain material provided directly by third parties and is given in good faith and has been derived from sources believed to be reliable but has not been independently verified. To the maximum extent permitted by law: no guarantee, representation or warranty is given that any information or advice in this publication is complete, accurate, up-to-date or fit for any purpose. It is important that your personal circumstances are taken into account before making any financial decision and we recommend you seek detailed and specific advice from a suitably qualified adviser before acting on any information or advice in this publication.
Visit Our Insights Page For More Helpful Articles