Thinking about self-managed super

There’s been much buzz around self-managed super funds, but what are they all about? Many people are weighing up their options and now more than ever are considering taking control of the biggest asset they have (besides their home).

Here we discover the key factors that are making self-managed super fund so attractive.

Reduce Your Super Fees

When it comes down to it, nobody likes paying for anything when they don’t have to. Many corporate, industry or retail super funds charge their fees based on how much you have in your superannuation fund and are calculated as a percentage, not a flat fee. Therefore, as your super grows, you’ll be charged more!

An SMSF does away with all of the percentage calculations and allows you to pay a flat fee, which doesn’t increase as your fund gets bigger. So when you add it up, think of the money that you could save with a self-managed superannuation fund on fees alone.

Maximise Your Returns

Aside from the money you’ll be saving on fees a SMSF will allow you to maximise your returns by splitting up where you invest your money. You can invest in shares, managed funds, residential properties, cash and fixed interest in whichever proportions you think are appropriate for you. By having this control, when a market dips you can act upon this by shifting your assets elsewhere.

With a company, industry or retail run super fund, you are exposed to their particular strategy which limits your opportunity for returns.

Reducing Your Tax with Salary Sacrifice

Salary sacrifice is simply an agreement you make with your employer to pay part of your pre-tax income into your self-managed superannuation fund.

  • The raw dollar advantage in choosing to salary sacrifice is that the contributions put into your SMSF are not taxed in your name but your SMSF at 15%.
  • So, if your personal tax rate is more than 15%, there is a tax benefit in salary sacrificing. If you sit at the top tax rate of 46.50% you can save up to 31.50% on each dollar you salary sacrifice into your SMSF.

By doing this, you can add thousands of dollars in tax benefits annually. Click here !

Claiming Benefits – Claim Co-Contribution

The Australian government has set up a scheme which matches dollar for dollar the additional contributions one makes to their superannuation. Although the government’s contributions are capped at a certain amount, there is still great opportunity to add to your SMSF balance. Many reputable companies who assist with setting up a self-managed superannuation fund will have all the relevant paper work for you to apply for this scheme.

Finally, be advised that you cannot access SMSF money for purposes other than your retirement needs. SMSF funds are bound by the sole purpose test, which says that superannuation investments are meant only to provide retirement benefits for the trustee(s).

Conclusion

While it is our duty to secure our financial future through prudence and alertness, it pays to remember the other durable values of life. As the great philosopher Bertrand Russell said, “The most valuable things in life are not measured in monetary terms. The really important things are not houses and lands, stocks and bonds, automobiles and real state, but friendships, trust, confidence, empathy, mercy, love and faith.”

This explains why the reason why the government gives a tax break for the income from self-managed super. Visit this site for more information : http://www.smsfselfmanagedsuperfund.com.au

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SMSF – Why So Popular?

The facts that are catching the attention of more and more individuals regarding self-managed super funds(SMSFs)  are as follows:

Investment control: The Trustees of an SMSFs –Many individuals prefer their own funding investments together with shares, residential and business property, farms, and other investments.There are limitations under the superannuation legal guidelines of how these belongings can be utilized (together with use by means of contributors) and who they can be received from. Thus,in case they could meet the fund’s on investment method, they will have to be suitable investments. click here for more about SMSF.

 

Family members super funds: SMSF is considered as a true inter-generational asset accumulation and also a wealth transfer car. There is no any legal period limit as to how long an SMSF can go. Therefore, lots of customers build it for when their children grow up -the benefits go well beyond the grave.

 

There would be an Australia’s most effective tax haven: The simplified super annuation offered by means of the previous government provides tax-free lump sums and pensions payable from a self-managed super annuation to members over the age 60. This is a large improvement for investors for the duration of their retirement when compared with all different forms of investment structures together with the loved ones trust, family organization or investing on my own or in a partnership. The other comparative exemption are the capital features tax exemption on a investor’s primary home or the sale of a business asset that meets the small business capital positive aspects tax exemptions. for further related info, click on  : https://www.dixon.com.au/smsf/is-an-smsf-right-for-you

SMSF - Why So Popular

 

Social protection benefits: the place a member is over age pension age (sixty five years for a male and 64.5 years for females) belongings of their SMSF member account are verified for belongings experiment and the income scan. The place a pair’s mixed belongings together with superannuation is lower than $1,092,000 for a house owner then a component cost pension is payable. For incomes test purposes, pension income much less the tax free share is classified. The tax-free factor isn’t decided by way of whether the pension revenue from the fund is tax-free within the member’s fingers; however, the component of the pension that relates to non-deductible contributions, such as the CGT exempt component and other capital type accessories.

 

The best Self-managed superannuation fund estate planning: The ATO has recently recounted that a member’s superannuation benefits can’t be taken care of by way of a member’s will. It is the trust deed of the fund that have got to provide rules as to how the trustee of the fund is to pay out a deceased member’s advantages to their dependents or legal estate. Importantly,going from a tax method perspective, there will be no tax regarding lump sum payments to dependents of members who pass away. A dependent involves a partner, a youngster under the age of 18, someone in an inter-dependent relationship (reside together and furnish mutual help) or an individual who’s financially sound upon the deceased member.  If the deceased member is over age 60 and receiving a tax-free pension income then this sales may continue to be paid tax free to the member’s dependents – apart from any fiscal dependent who’s a child and is over the age of 25.

 

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"SMSF – Why So Popular?"