Self Managed Super Funds
SMSF

Self Managed Super Funds

 

Self Managed Super Funds

Take control of your super!

Why is super so important?

For many people super is simply the 9% that your employer has to put into a fund on your behalf each year. Because you can’t access it and your employer makes the contribution it is usually easily forgotten about.

The reason it is so important is because it’s your money, and it’s just being placed into a superannuation fund so that it can grow and be there to access when you retire.

For many the age pension will not be enough to have a comfortable retirement (less than $20,000 a year), plus there is no guarantee the government will be able to afford this much in years to come.

Therefore, it’s important to build up a large sum to ensure you can live comfortablly when you do retire.

Because super has the benefits of compounding (earning interest on interest), and it is there for a long investment time frame it could be your greatest asset when you retire, or at the least has the potential to be.

If you start building your super balance early then the long term benefits to you in retirement could mean tens of thousands of dollars more to fund your retirement, without it costing you a lot now.

Having an SMSF will allow you to

Have a greater choice of investment opportunities:

  • An SMSF can invest directly into a wide variety of investments including shares, managed investments, property and cash, just to name a few.
  • An SMSF can also invest in commercial property which can be used in your business. For example, you can purchase an office space and lease it back to yourself or your business (at market rent).
  • You can choose to invest in assets you believe will achieve your retirement goal.

 

Take control of your retirement

By having control of the investment and strategic decisions you also have the ability to control and monitor how you are meeting your retirement objectives. You can monitor your investment in a more timely fashion as you have direct control of the investments in the fund. You do not need to wait for reports from your industry fund, to see how your fund is performing. As you know, usually by the time you receive the reports they’re out of date.

An SMSF gives you the ability to make decisions and action them faster. For example, you can buy and sell shares as the opportunities present themselves

Concessional Tax

SMSF’s profits are taxed at a concessional rate of 15% and Capital Gains at 10% (if held for over 12 months). You have flexibility to plan when to take profits to minimise your tax. You can use existing tax credits in the fund to offset tax on concessional contributions.

Flexibility on when and how much pension to take

You have the ability to choose when and how to access your benefits (subject to a condition of release being met). The payments can be taken as a lump sum or pension, they can be taken weekly, monthly or even annually. By having control of the payments you can plan when and how you take your benefits, and control your own cashflow.

Estate planning

An SMSF allows the members to put in place estate planning strategy to effectively transfer wealth from one generation to the next in the most tax effective way.

For example, you can choose to leave your benefits to specific beneficiaries eg. your spouse as opposed to your estate, where it may be paid out to non-dependent beneficiaries that could be taxed up to 31.5%. A bit of forward planning can save a significant amount of tax.

The above are only a few advantages of having a Self Managed Superannuation fund. Please give Mike Hall or Anna Agati a call on 5821 9177 to discuss how a Self Managed Superannuation Fund can work for you.