Superannuation has long been heralded as the best way to provide for yourself in retirement, and an excellent long-term investment. There are many different types of super funds.
What are self-managed super funds?
Whilst it does not suit everybody, a Self-Managed Super Fund (SMSF) is an attractive option for those who are looking for more control over their retirement savings and investments. It differs from a normal super fund because all of the members act - directly or indirectly - as trustees, with the authority to make the day-to-day decisions about how the fund operates and how to invest, subject to the superannuation laws.
Benefits include:
- More control than other funds
It is often the ability to have more authority that makes a SMSF so attractive. Being able to choose how to manage your money gives some people a huge benefit. But you do need to be careful and having some experience of managing investments or a business is a huge plus.
You can delegate some aspects of management to a financial planner, but ultimately the compliance of the SMSF is your responsibility.
- Ability to pool your super
Another benefit to an SMSF is the ability to pool your resources with up to three other members. This increased pool may allow you to access investment opportunities that may not be available otherwise to your SMSF.
- Relatively Low Cost
Lower fees are an attractive part of a SMSF which could be split across all the members.
- Convenience
When set up correctly, modern technology means that you can now have access to one of your largest assets in your hands at the click of a button. You are able to view your statements at all times rather than waiting for a benefit statement to be mailed to you, so this information (and more) is available when you need it.
Family super benefits can be pooled together (up to 4 members per fund), which means an SMSF can slot in well to your overall investment strategy and succession plan.
- Investment flexibility and estate planning
SMSF members also have greater flexibility in buying and selling investments and this hands-on approach can mean, for example, as market conditions change you can quickly respond by adjusting your investment portfolio. However, it is always advisable to seek advice from your financial planner before making any changes.
You can sometimes also add value to your SMSF with real property.
- Effective tax management
Because an SMSF can give you greater control of your assets and investment decisions, you may be able to better manage the tax position of the SMSF.
At Profacc Accountants & Profacc Financial Planning, we help you with superfund registrations, preparation of SMSF financial statement, preparation and lodgement of SMSF income tax returns, registration of SMSF Corporate Trustees and more!
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