Is an SMSF right for you?

 

Is an SMSF right for you?

Making the choice to start your own self-managed super fund (SMSF) is a big financial decision that comes with many benefits but also contains added legal and regulatory responsibilities. However a SMSF can help you take control of your financial future and plan for your retirement by allowing you to use your Super differently than a traditional Superannuation Fund.

SMSFs provide more investment options than any other Super Fund such as investing in shares, high yielding cash accounts, income investments, property, term deposits and can also allow you to borrow money as a first time home buyer. One of the key draws about a SMSF is that you can benefit from the concessional tax rates on investment income capped at 15 per cent and during the pension phase there is no tax payable. Therefore avoiding capital gains tax and a way to navigate that is by speaking to your local smsf accountants (or accounting firm Melbourne) to help assist in navigating the tax advantages compared to investing after tax income.

An industry rule of thumb is that the trustee or trustees should have over $200k AUD in their current Superannuation. SMSFs also allow multiple members to run the fund (maximum of 4) trustees have control over their investments and can respond to changes in market conditions. This allows you invest better understand where your money is invested and access to more opportunities to grow your retirement compared to a traditional Super Fund.

SMSF trustees must lodge an annual tax return & audit, and pay ATO fees. The rule of thumb is that SMSF become more cost effective as it grows, but the total cost of running it will depend on whether you have professional help and the related investments. By speaking to smsf accountants you can better understand the numerous benefits to establishing an SMSF and the associated number of risks to be aware of.

For more information please contact your local accounting firm Melbourne.

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