Taking control of your financial future and starting a Self Managed Super Fund can can offer a lot of benefits but they can involve the investment of a great deal of your time and effort and there ar a few things you need to be aware of before you get started.
Benefits of a Self Managed Super Fund
Some of the main benefits of managing your own super fund include:
Being able to choose where you make investments
There are tonnes of different investment options including shares, term deposits, property, international markets, collectables and many more. This flexibility also allows you complete transparency over where you super fund is investing. If you are passionate about shares, sustainable or ethical investing, or property, a self managed super fund will give you complete transparency.
Reducing your tax payments
All super funds, including SMSFs are subject to concessional tax rates of 15% during the accumulation phase. During the pension phase, there is no tax (including capital gains tax) due. This means that by working closely with your financial planner and accountant, you can work out tax strategies that will allow you to increase your super savings and reduce the amount of tax payable as you move into retirement.
Flexibility
A SMSF allows you to invest in a mixture of different assets which can be adjusted as it suits you. This allows you to make quick changes in response to market conditions, changes to superannuation rules or your own circumstances.
How do you know if a Self Manage Super Fund is for you?
The best way to determine if a SMSF is for you is to talk with one of our financial planners. They can work out your financial goals and whether or not a self managed super fund will help you to meet those goals. Our financial planners and accountants are certified to manage Self Managed Super Funds and will also be able to talk you through the pros and cons, helping you to weigh up if the investment is worth it for you.
What are some of the considerations for a Self Managed Super Fund?
Choosing your insurance
A lot of standard Super funds will offer their members life insurance, income protection and total and permanent disability cover. When you open a SMSF, you will need to organise this insurance yourself. We offer a range of insurance services for our clients!
The administration fees and costs will be different
A SMSF requires far more time, skills and effort to manage and is tailored to your needs. This means it is a personalised service and will result in higher fees. You must also take into account how you will be paying your financial planner, whether it be a commission based payment of a fee for service. BIS Cosgrove charges a fee for service meaning you only pay for the work that we do and all of this is discussed with you before we begin implementing any strategies.
Navigating the rules
Self Managed Super Funds are subject to specific and complex rules which can be hard to understand. This is why it is vital that you consult with a professional who is certified to manage a SMSF – they invest their own time into knowing the ins and outs of the rule system so you won’t get caught out when investing incorrectly. Investing in property with a self managed super fund in particular can be a difficult area to navigate.
Despite these disadvantages, a carefully planned and managed SMSF can be a great way to build your nest egg the way you want.
Call BIS Cosgrove today on (07) 5598 3800 to start your own Self Managed Super Fund and work towards your best financial future.
