SMSF: Can you get further, faster, if you’re in the driver’s seat?
In the last decade, Self Managed Super Funds have become the fastest growing area of the superannuation industry in Australia. This high level of growth can be associated with the number of benefits that are associated with DIY-ing your superannuation.
If you have not yet considered taking control and driving your super, here are some significant benefits that you may be missing:
Allocate more money for your super, not for fees
Depending on the balance of your super account, establishing a SMSF may be more cost effective. Retail funds charge their customers based on a percentage of the account balance, so for example if your fund exceeds $250,000 it may be beneficial for you to discuss setting up a SMSF with a Modoras Executive Planner. Learn more about self managed super funds by clicking here.
Put yourself in the Drivers Seat
Self Managed Super Funds are structured so that members of a fund are also trustees. This allows all members (up to four), to manage the way in which the fund is run and they are also responsible for the decisions that are made. Often trustees opt to consult a professional to ensure that all decisions are made in accordance with superannuation laws. Consult one of our experienced Executive Planners to ensure you are maximising your super fund and minimising risk.
Get your investments into the right gear
Trustees within a SMSF have a larger choice when in comes to investments. More choices mean more flexibility when selecting where funds are invested, which includes geared investments and non-traditional investment options.
- Direct property. An SMSF can invest in direct property, whereas retail funds usually cannot. In addition, a business property owned outside superannuation can be transferred into an SMSF. For many self-employed people, having their SMSF own their business premises can make a lot of financial sense.
- Taxation. SMSFs can allow trustees to take a more tailored approach to managing taxation, especially when it comes to capital gains tax.
- Insurance. SMSFs can hold life, temporary disability and permanent disability insurance on their members. This can be a tax-effective way of managing both the cost of the insurance and any future insurance payouts.
- Estate planning. The trust deed for an SMSF may allow for binding death benefit nominations. A Will can be challenged in court, but under a properly executed binding death benefit nomination trustees must pay a death benefit as directed. This provides greater certainty in the distribution of assets.
Despite the detailed legal responsibilities attached to SMSFs, it is clear that many people find the ability to manage their nest eggs highly rewarding. Although there are many things to consider when converting your super funds to an SMSF, the added choices, flexibility and cost effectiveness may far outweigh the additional time taken for administrative purposes. Please contact one of our advisers if you would like more information about these highly regarded options and find out if an SMSF might benefit you.
At Modoras, we’re ready to help you help yourself.
https://www.ato.gov.au/superfunds “Self-managed super fund statistical report – June 2009” Accessed 8 December 2009
Unisuper Fact Sheet – Binding Death Benefit Nominations 2008
This article is published by Modoras Pty Ltd ABN 86068034908 AFS and Credit License No. 233209. This article contains general information only and is not intended to represent specific personal advice (Accounting, taxation, financial or credit). While every effort is made to ensure that the information is accurate, users must be aware that some information may not be accurate or is no longer current. No individual personal circumstances have been taken into consideration for the preparation of this material. It is recommended that you obtain your own personal professional advice before making any financial or business decision.