Today, the Self Managed Super Fund (SMSF) is considered to be a number one choice for many Australians. That’s because the members of this fund can enjoy a number of SMSF benefits such as, investment flexibility and greater control over their assets.
Compared to the traditional institutionally managed superannuation funds, an SMSF offers many advantages for its members. Interested to know the unique benefits of SMSF? Read on:
Flexibility. One of the greatest SMSF benefits is the flexibility which is provided. This fund allows special investments to be made, depending on the specific needs you and the other trustees may have before or after retirement. With an SMSF, the trustees have the flexibility to make quickly and easy changes to their investment strategies.
Control. With an SMSF, the trustees are those who decide about the investment strategy, and those who choose in what assets to invest. However, this control involves some obligations such as: the trustees will be responsible for monitoring the performance and the progress of the SMSF investments.
Investment Choice. Generally, an extensive range of investment options are available by establishing an SMSF. The trustees can choose options such as property investment, direct fixed interest, and international shares. These options are not provided by other superannuation funds.
Tax Control. This is one of the biggest SMSF benefits. With an SMSF, the trustees have the control and the flexibility over the tax position of the fund. Furthermore, they have great flexibility in terms of dealing with tax liabilities.
Borrowing. Recently, new rules have been introduced which allow the trustees (under a particular type of arrangement) to borrow a certain amount of money. Although there are some limitations, these new rules can be fully utilized by trustees to acquire property from their SMSF.
Pension Planning. The SMSF allows transition from accumulation into flexible income. It offers you the ability to take tax free income after retirement which is a big plus.
Cost Saving. Compared with other superannuation funds, the SMSF may provide cost savings for you. But this will depend on your individual circumstances.
Asset Protection. In case of litigation or bankruptcy, your benefits are protected, even if you need to withdraw some.
Note: It is important for you to know that in order to enjoy the SMSF benefits, you must have a well-developed SMSF investment strategy. It is required by the law and it must be in compliance with the ATO standards.