A self managed super fund (SMSF) is one of the most popular and effective forms of investment and wealth creation available to Australians. There are many benefits to a self managed super fund, including control over the investments you choose to invest in, flexibility and the taxation benefits offered by the government. The benefits of a SMSF has led to an increase in the number of Australians who choose to manage and control their own super fund. Reports suggest that there are currently more than 350,000 self managed super funds with an overall 700,000 members.
The other benefit of a self managed super fund is that it helps offer an optional retirement saving mechanism thus giving the investor greater flexibility and control over the investments. The funds also enable you the ability to choose from the wide range of investment and strategies that are currently available in Australia. For example, through your self managed super fund, you could invest in cash, shares, bonds or property.
Self managed super funds offers the investor the chance to take advantage of tax benefits. DIY super also accept rollovers from other existing superannuation funds. In addition, they allow one to decide the amount of funds that one can contribute to the self managed super fund. The super fund also enjoys concessional tax rates which apply to the realized capital gains so long as the SMSF has held the assets for at least 12 months. The concessional tax rate of 15 % is applied to the deductible contributions and income held by the self managed super fund.
Self managed super funds allows an investor to change an administrator without the need for paying penalties or exit fees. Also, upon the death of the investor, the dependants of the fund member are in a position to receive the whole balance of the account tax free. The premium payable for total incapacitation insurance and death is tax deductible so long as it is paid through the DIY super fund. The cheques from the funds can only be signed by a member of the funds making self managed super a safe investment haven for most Australians. The funds also offer an inexpensive and simple structure especially for investors who wish to invest as couples.
The other benefit of self managed super funds is that they are cheaper to establish and run compared to other normal super funds. They are also a more flexible investment option compared to commercial and retail funds as they allow you to invest in property, cash, bonds, mortgage investments, shares, private equity and fixed interests. The self managed super fund allows an investor to invest in a wide variety of financial instruments that would not be available through traditional super funds.
To find out more about self managed super funds, speak to our financial planner today on +61 7 3624 1900. Through Intellichoice Financial Services, our mortgage brokers can also help you buy property through your self managed super fund with a SMSF home loan.
