A popular choice for managing superannuation is to take personal control via a self-managed superannuation fund (SMSF). SMSF retirement management is growing in popularity with over 603,000 funds and 1.1 million members. With a membership limit of six people per fund, the ATO estimates the value of assets in SMSFs at over $868 billion.
So, what’s the attraction? Below are some key advantages of managing your own super:
Control
With SMSFs, all members of the fund are also trustees and are therefore responsible for all decisions. ATO requires them to manage the fund in accordance with current superannuation laws.
Flexibility
Trustees can seek the assistance of administrators and licensed advisers to help them meet and maintain their legal responsibilities in the running of their fund or they can do it all themselves.
Investment Choice
Offers available to trustees are a much wider range of investments than retail or industry funds may offer. This allows maximum flexibility in investment selection, especially for geared investments and non-traditional assets like artwork, bullion and certain types of landholdings. However, there are strict rules that govern how personal-use assets and collectibles held in SMSFs are stored.
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 financial sense.
Cost Savings
Retail super funds are usually charged as a percentage of the account balance, so for accounts over $250,000 it may be more cost-effective to establish an SMSF than to use a retail fund.
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 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 especially for SMSF retirement management may allow for binding death benefit nominations. A binding death benefit nomination can be used to ensure that a death benefit is paid as directed by a will. This can provide greater certainty in the distribution of assets.
Many find SMSF retirement management rewarding despite its legal responsibilities. Although there are many things to consider when converting your super funds to an SMSF, the added choices, flexibility and cost-effectiveness may outweigh the additional time taken for administrative purposes.
SMSF for Retirement Management
Don’t miss out on the added choices, flexibility, and cost-effectiveness that comes with SMSF retirement management. If you’re considering making the switch, contact us today to learn more and receive a free consultation: https://bit.ly/your-right-choice