SMSF 7 Key Benefits

Posted on Dec 23, 2013 | 0 comments

Most Australians who are seeking to have more control and increased value from their superannuation are opting for a Self Managed Super Fund (SMSF) as a retirement option. The main motivation behind this move is the desire to gain more control over their investment choice rather than leaving it all up to the Fund Managers. What is perhaps not so widely known are the additional key benefits that make SMSF a powerful vehicle for retirement investment.

1. Investment choice

Trustees have access to wider a choice of investments, however, the real benefits lie in having more sophisticated strategies of investment that work for you.

2. Tax Control

Trustees have more flexibility and control when it comes to the fund’s tax position. Internal structuring and strategic planning of investments, is is possible to significantly reduce, and even eliminated tax, which is of particular benefit to retired persons. A little known strategy exists whereby other members can benefit from tax deductions in future years when a member dies.

3. Estate Planning

Trustees can create a strategy to achieve their exact objective with excellent tax benefits, including leaving tax advantaged or even tax free income to dependants with control as to when they are paid a lump sum and providing for child beneficiaries that no other investment structure is able to match.

4. Borrowing

New rules recently introduced allow superannuation funds the benefit of borrowing money which can be utilized by SMSFs.

5. Cost

Depending on account balances, the cost of operating a SMSF could be much lower than that of other commercial funds.

6. Pension Planning

SMSFs allow for a seamless transition into flexible income streams from accumulation income with flexibility on how to go about it.

7. Asset Protection

In the event of bankruptcy or litigation, the asset protection provided by SMSFs is crucial to protect retirement benefits.

Once you have become acquainted with the intricacies of SMSFs, you will see why it has become such an effective and popular retirement vehicle. However, it goes without saying that there are also significant responsibilities associated with being a trustee of an SMSF.

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