With over 1.1 million Australians making the switch from a traditional industry superfund to a Self Managed Super Fund (SMSF), it is no surprise that it is a more popular option than ever for those wanting more autonomy and control over their retirement savings and investments.
An SMSF puts the power in your hands, giving you the ability to fully control your retirement planning and investments. The long-standing debate when comparing SMSFs to traditional superfunds is typically based on a simple analysis of cost and returns; but in reality, it’s not that simple.
It ultimately comes down to your motivations, desire for control and your own personal retirement goals as a trustee.
An SMSF won’t be for everyone – It must be considered on a case by case basis. But it is important to have all the facts and information at hand so you can make an informed decision.
Why choose an SMSF?
CONTROL
SMSFs allow trustees to take full control of their financial future. The desire for greater control over superannuation assets and investments has been the greatest catalyst for the steady increase in establishment of SMSFs. As a trustee, you gain the responsibility of making the big decisions on where your money is invested. You take control of the fees, and the ability to generate higher returns. It’s all up to you. Your money, your choice.
FLEXIBLE INVESTMENT CHOICES
SMSFs are the ultimate providers of investment flexibility and choice. Not only do you have the opportunity of traditional assets such as shares, fixed interest and managed funds, SMSF’s also give trustees the opportunity to invest directly into property, commodities, unlisted companies, and unlisted managed funds and trusts—there’s even the option to invest in your own business property.
This flexibility of an SMSF means you can build a diverse portfolio tailored to your individual needs and circumstances.
DISSATISFACTION WITH YOUR EXISTING FUND
Many people choose to set up an SMSF because they’re dissatisfied with the performance of their industry superfund. This often stems from frustration with high fees, limited investment options, or a lack of transparency and control over corporate actions. By taking control of their SMSF, trustees gain full oversight of their superannuation savings, allowing them to make decisions about where their money goes and how it’s managed.
PLAN YOUR TAX
SMSFs can provide additional flexibility when it comes to the tax paid by your fund. This flexibility enables you to control when you make your contributions or purchase/sell assets, helping you achieve the best retirement savings outcomes. SMSFs also provides a seamless transition from accumulation to pension phase.
PLAN YOUR ESTATE
With the right planning and careful consideration of structuring, an SMSF can provide you with more flexibility and certainty over when, and to whom, your death benefits are paid from your retirement assets.
DID YOU KNOW?
SMSF numbers are at a record high and growing, with over 610,000 established funds and more than 1.1 million fund members/trustees.
- 80% of trustees believe their SMSF is good value for money.
- Approximately half of all trustees own or have owned a small business.
- 90% of trustees feel satisfied managing and engaging with their SMSF.
- The median cost of running an SMSFs is around $3,923 a year.
- Most SMSF trustees spend between 1 and 5 hours a month managing their SMSF.
- The most common age range for establishing an SMSF is between 35 and 44.
- SMSFs are most cost effective with balances of $200,000 or more.
- Over 50% of trustees have had their SMSF for over 10 years.
Statistics courtesy of the SMSF Association
While SMSFs are flexible and efficient, they’re also subject to strict regulations. Aside from the annual audit of your SMSF, which must be done by an independent Approved SMSF Auditor, you as the trustee can decide on the level of compliance and administration work that is outsourced to others – however, it ultimately remains your responsibility as the trustee to ensure your SMSF is compliant with tax and superannuation laws.
At BIS Cosgrove, our team of Gold Coast SMSFA Specialist Advisers are here to help you with all aspects of your SMSF, from setup, to advice, administration, property and any complexities you may come across on your SMSF journey.
Why wait? Take your financial wellbeing into your own hands. For help with your SMSF, get in touch with us to talk to one of our SMSF Specialist Advisers today.
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The material and contents provided in this publication are general and informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.
