In the past, most people invested their Superannuation in Retail or Industry Superfunds to which their employers contributed a percentage of their salary. Fund managers then made investment decisions on behalf of the members of those Funds. This landscape has dramatically changed in the past 10 years, with almost 1.1 million Australians switching from Retail or Industry Funds to SMSFs. The reasons for the change include the additional control over their Super and potentially lower fees. Now let us have a closer look at the advantages that an SMSF can offer.
4 Reasons For Setting Up An SMSF
Take Back Total Control Of Your Super
An SMSF gives you total control of your Super by allowing you to choose where you invest your Super. Many of our clients are disappointed with their Superfund’s performance or simply think that they can do a better job by managing their own SMSF. Having total control means the members of the SMSF can invest in a wide range of investments. For example, with an SMSF, you can invest in Term Deposits, Australian & International Shares, Residential & Commercial Property.
Save Fees On Managing Your Super
An SMSF can also be the most cost effective type of Superannuation Fund, particularly where industry funds charge a % and the $ fee increases considerably as your balance grows. If you have $200,000 invested in the fund, your fees are $ 4,800. SMSF might save you fees. Talk to us for independent assessment.
Transfer Assets From Your Personal Name To An SMSF
It is sometimes possible for Members to make contributions of assets instead of cash like Shares, Managed Funds, and Commercial Property from the Members’ personal names into an SMSF (called in specie contributions). In specie transfers allow you to consolidate your Family Assets under the one SMSF tax advantaged structure. We note that taxation and capital gains tax issues should be considered.
Accumulation And Pension Funds In One
With Retail and Industry Funds your benefit is typically invested separately in a Pension or an Accumulation Account. This means that when you wish to draw down your Super Benefit as a Pension your Super Benefit will need to be transferred to a separate Pension Account and any additional contributions you make will be added to a completely separate Accumulation Account. An SMSF can hold Pension and Accumulation accounts in one Fund. You can commence a Pension and continue contributing to the same SMSF. There is no need to split your Super Benefit into multiple Funds. Your SMSF can account for these as separate accounts within your one Fund.
Before You Start
An SMSF can be a great vehicle to take back control of your Super but an SMSF may not be right for everyone. We recommend that clients should have combined super balance of $200,000 or more before considering an SMSF. We can assist you in understanding what is involved in the set up and ongoing management of your SMSF via our Free SMSF Initial Meeting.
If you want to learn more about SMSFs, call to book your free meeting in Brisbane CBD (07) 3145 0182 or Capalaba (07) 3823 2344