3 Benefits of Setting Up a Self Managed Super Fund

With everyone very much in tune with safe investing and ensuring secure future, who hasn’t heard of Self Managed Super Fund (SMSF). Growing number of Australians are thinking or are already setting up a self managed super fund all in order to safeguard their retirement years. They know just how powerful of a tool SMSF is in ensuring a fruitful retirement. In fact, SMSF is Australia’s largest super sector. And numbers prove it. In the 5-year period, number of new Self Managed Super Funds has doubled. So, if everyone else is setting up a self managed super fund, why not set up your own.

SMSF allows up to four member the most which are also the trustees. This rule applies regardless of whether you are setting up a self managed super fund under individual or a corporate structure. Every member has an obligation to run the fund for the benefits of all member. This includes:

• choosing the right investment strategy,

• investing assets for the benefits of other members,

• paying benefits, and

• being in compliance with the rules, laws and requirements of the Australian Taxation Office (ATO).

Because every member is a trustee and actively participates in the management of the SMSF, this super provides greater control. And this is probably one of the major reasons why more people are setting up a self managed super fund. Also, some are setting up a self managed super fund because they are not happy with their current funds or have been advised to in order to secure their future. Whichever the reason, it is evident that SMSF offers great benefits. Here are the three major ones:

Greater Flexibility

When it comes to investment strategy, SMSF offers greater flexibility. With SMSF you can invest in assets you could not with other super funds. For example, you can invest in direct property, exchange traded funds, bonds, shares, etc. Such flexibility allows SMSF members to decide on the investment strategy and decide where the fund’s assets will be invested.

Lower Fees

This is another great benefit of setting up a self managed super fund. According to recent reports, SMSF members pay less fees than members of other super funds. Of course, careful consideration of investments and minimum number of transactions are the key to lower fees.

Low Taxes

If you are paying high taxes with your current super, then setting up a self managed fund is the solution. As long as your SMSF is in compliance with all ATO regulations, you can take advantage of the many tax concessions provided by the Government. Another great benefit of setting up a self managed super fund is that assessable income earnings are taxed at the maximum concession rate of 15%.