SMSF – Saving for your retirement can be a cause of concern for many people, particularly if you’re over 45, self-employed and thinking that your superannuation balance may not be enough to support you in the lifestyle you’re accustomed to living. That being said, a a promising solution would be to set up a self-managed superannuation fund or SMSF. In short, its most distinct difference from other types of super funds is that it will be managed by you. Meaning, you will have complete control over your money and your retirement. With this, there is a need to have extensive knowledge and skills on how it works as you assume full responsibility for your fund, which is where we can come in to assist you in navigating through the uncharted waters of managing your own superannuation
How It Differs
An SMSF is a type of superannuation fund, different from retail or industry funds as you will be the one managing or you can utilize the advisory services of a third party for example a financial planner, which we have a trusted network to choose from, so you can contact us so that we could set up an introduction. A very important distinction to note that in using an advisor for your own fund, their aim is the best interest of the members within the fund. In retail and industry funds there are thousands of members, all of whom whose interests have be considered.
This is the great advantage in having an SMSF, your advisors (us included) work for you, for your benefit and for your gain.
As mentioned previously, other types of funds can have an unlimited number of members, whereas and SMSF is limited to four members. It acts similarly to a trust in which there is a trustee, which can be the individual members themselves or a company. Having a company is something we strongly recommend as this covers you in matters of asset protection and can serve as an effective tool in succession and estate planning.
Furthermore, if you have a company as a trustee then all members must be directors of said company. In the case that there is only one member of an SMSF, you will require two trustees. Another reason we recommend having a company as a trustee is that if the ATO penalize the fund for contravening legislation, penalties apply to EACH trustee. If the trustees are individuals, they can be penalized up to $10,800 each depending on the contravention.
Why You Should Consider SMSF and saving for your retirement
Among others, one of the most significant reasons why you might want to consider SMSF is the fact that it offers complete control. It will provide you with the discretion on where to put your money. You have the freedom to invest it in real estate or other assets as you wish, where income is taxed at a very favourable rate of 15%.
Having an SMSF offers flexibility. You will have a diversity of selection for investments. A common strategy is using your SMSF to purchase a commercial property and have it available for lease. From this, you will be able to earn rental income, which as mentioned above is taxed at 15%,
For more information, please don’t hesitate to contact us.