Self-Managed Superannuation Funds: What You Need To Know

Self-managed superannuation funds (SMSFs) have become increasingly popular in Australia over the past few years, with more and more people looking for greater control and flexibility over their retirement savings. SMSFs are essentially private superannuation funds that are managed by individuals or a group of up to four members who act as trustees of the fund.

SMSF Benefits

1. Greater Control and Flexibility
One of the primary benefits of having an SMSF is the greater control and flexibility it offers. As a trustee of the fund, you have complete control over how your retirement savings are invested. This means you can choose to invest in a range of different assets, including property, shares, and cash. You can also make investment decisions quickly, without the need for approval from a third party.

2. Lower Fees
Another key advantage of having an SMSF is the lower fees. While industry funds charge fees for the management of the fund, SMSFs typically charge a flat fee that covers all costs, including administration, accounting, and legal fees. This means that as the size of your SMSF grows, the overall fees you pay become relatively smaller.

3. Estate Planning
SMSFs offer greater flexibility when it comes to estate planning. You can nominate your beneficiaries and ensure that your assets are distributed according to your wishes after your death. This can be particularly important for individuals who have complex family structures, such as blended families, as it can help ensure that everyone is taken care of according to your wishes.

Who Benefits?

  1. High Net Worth Individuals
    High net worth individuals are generally the best clients to utilise an SMSF. This is because they have more complex financial situations and often require greater control over their investments. High net worth individuals also tend to have greater access to investment opportunities, such as property and private equity, which can be difficult to access through industry funds.
  2. Business Owners
    Business owners can also benefit from having an SMSF, particularly if they own property or have a self-employed income. An SMSF can be used to purchase commercial property, which can then be leased back to the business. This can provide tax benefits and help the business to grow over time.

SMSFs offer many benefits for individuals who are looking for greater control over their retirement savings. They can provide greater flexibility, lower fees, and greater control over estate planning. However, it’s important to be aware of the potential hidden costs associated.

If you think you are ready to make the transition over, reach out on 1300 225 552.


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