Self-managed super funds are an effective superannuation strategy for those individuals looking to exercise greater autonomy over their retirement.
Examine the following advantages of using a SMSF.
Minimise tax bill: one of the major benefits of using a SMSF is the ability it provides you to minimise your tax bill. Investment income is taxed at a 15 per cent cap during the accumulation phase; during the pension phase, there is no investment property tax.
Transparency: using a self-managed super fund provides greater transparency for you, allowing you freedom over where you chose to invest your money. Because you are responsible for your own super contributions, you are not going to get lost as one could being a member of a large super fund.
Asset protection: SMSFs are a type of trust, meaning that the assets in the SMSF are owned by the trustee. This is particularly useful for business owners for example, as they can transfer ownership of their business across to the SMSF, keeping the business safe from creditors.
Investment pooling: SMSFs allow family members to pool together their money and resources, thus making it possible to invest in areas that would not otherwise be financially viable. Take note when investing using your SMSF as there are regulations to be aware of, such as not being able to inhabit any of your investment properties.