Benefits of a Self-managed Super Fund
With so many options for super, how do you know if your fund will provide you the most for your retirement? Super funds pool your money with other peoples’ and are typically controlled by fund managers. Most funds aren’t accessible by their members until their retirement. Australian employers are required to pay super contributions of at least 9.5% to their employees. People can also add to their super funds with their own money. Since many of us depend on our super for retirement, it’s critical to spend time choosing the right fund for your circumstances. Self-managed super fund is one option which seems to be increasing in popularity.
What is a Self-managed Super Fund?
Self-managed Super Funds (SMSF) are those super funds which are arranged as trusts to provide additional benefits to their members. The main differentiating point between an SMSF and other kinds of super funds is structuring, which designates its members as trustees of the fund. This means that as a member of an SMSF, you have influence to control the fund to meet your individual needs – other funds don’t provide this benefit.
Investment Control
A vital consideration of SMSF’s is the investment control they offer to their members. This allows them to take an active role in the future of their fund. An SMSF may allow its members to have input in investing in shares, fixed interest assets and property via managed funds (typically conditional). Other common investment opportunities include gold and other physical commodities as well as managed portfolios.
Flexibility
Another perk offered by SMSF’s is the flexibility in investing. Members have more freedom in acquiring and selling investments, which means they can be more responsive to changing market conditions. Members of SMSF’s also have the ability to pool their own assets with up to three other members, which can open the door to investment opportunities otherwise unattainable.
Tax Benefits
Greater control of investments can also provide more effective management of the fund’s tax position. More input into the tax strategy of your fund means more effective growth and a reduction in tax payments as you transition into retirement.
Estate Planning
Greater freedom is offered for members in the process of estate planning. Members of SMSF’s have the advantage of being able to make binding death benefit nominations which do not void. Many other funds require these nominations to be updated every three years, or else they will lapse.
How We Can Help
Lockwood Partners have a practised SMSF advisory team that can assist you in structuring your fund and making the right investment choices. Our expertise includes:
- Independent audits of SMSF’s
- Confirming fund compliance with legislative requirements
- Development of wealth generation and tax effective strategies through your fund
Members of self-managed super funds are subject to obligations and regulations that govern investments and tax laws. We can help you navigate this complicated area of the law. For more information on Self-managed Super Funds, reach out to the team at Lockwood Partners
The SMSF Advisers Network Pty Ltd is an Australian Financial Services Licensee, license number 430062, and is a fully owned subsidiary of the NTAA.
Superannuation advice provided as a Corporate Authorised Representative No. 124 4433 of SMSF Advisers Network Pty Ltd ABN 64 155 907 681 AFSL No. 430062.
