5 Most Important Benefits Of A Self Managed Super Fund

1. 5 Most Important Benefits Of A Self Managed Super Fund

2. About Us SMART Financial Advisory takes pride in being a financial planning firm that focuses on creating a difference in the lives of their clients through providing the highest standard of service. We deliver tailored strategic solutions across a broad range of financial planning services that has been helping Australians achieve their financial goals and freedom. We are a corporate authorised representative of InterPrac Financial Planning Pty Ltd and specialise in Retirement Planning including; Investment, Superannuation, Personal Insurance, Estate Planning, and Centrelink and Aged Care advice. We provide independent financial advice to ensure that your current savings and funds are invested effectively for you and your family. Our motto is to help you PLAN, INVEST, ENJOY!

3. 1. Investment Choice One of the key benefits of a SMSF is investment control, and the wider investment choices such as residential and commercial property, collectibles, term deposits and direct shares that SMSF members have compared to industry and retail super funds. You will also have access to derivatives to offer downside protection or hedging your portfolio risk.

4. 2. An SMSF can borrow to invest in property With the rules that allow SMSFs to borrow, SMSF members can now purchase large single assets such as commercial property that would otherwise be outside of their reach. For example, a couple with a combined SMSF balance of $200,000 can borrow money via a limited recourse loan to purchase an investment property worth $400,000. Generally, a limited recourse loan can be secured for up to 60%-70% of the purchase price of a property. This excludes other costs associated with the purchase such as legal, stamp duty etc.

5. 3. Tax Minimization Apart from defined benefit super funds (like a government employee fund), most other superannuation funds will offer the ability to take a tax-free pension as an income stream upon retirement.

6. 4. Tax Control Through timing pensions and structuring as well as tilting investment strategies to utilise the concessional tax treatment for the funds, like targeting franking credits, tax can be reduced and for most retirement phase client’s refunds can be claimed from ATO for any excess credits. There is also the flexibility when it comes to dealing with taxable liabilities for your fund, as this fund only has one single tax return although there may be up to four different members for the fund and each can have numerous pension accounts. Where the fund has one or more members who have retired and are therefore paying 0% tax, tax advantages can be achieved by allocating earnings from members who are not retired and are therefore sitting in a 15% tax environment.

7. 5. Pay for your Life Insurance through your SMSF You may have some insurance cover through your current industry or retail fund. This cover is referred to as ‘group insurance’ and isn’t tailored towards your needs, plus it can be reduced or cancelled by your super fund at any time without your consent. If you apply for personal insurance that is tailored to your individual needs it is ‘guaranteed renewable’. A ‘guaranteed renewable’ policy is an insurance policy feature that obligates the insurer to continue coverage as long as premiums are paid on the policy. Do you have any queries about SMSFs? Do you require a proactive financial advice? Feel free to contact our experts now!

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