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Advantages of a SMSF

The main advantages of a self managed super fund include:

Control - Members of a self managed superfund also act as trustees and therefore have complete security, flexibility and control over the fund and its investments.

Investment Choice – With a self managed super fund you are able to (subject to certain restrictions) invest directly in a wide range of assets including cash, securities, real property, managed funds, equity warrants, unit trusts and derivatives.

Tax Concessions – Self managed super funds (like other superannuation funds) offer significant tax benefits. For instance:

  • you can contribute before tax dollars through salary sacrificing or claim a tax deduction in some circumstances for your personal contributions,
  • while your money is invested, you benefit because complying superannuation funds are subject to the lowest rate of tax of any entity structure in Australia on income and capital gains, and
  • when you receive the benefits either as a pension or lump sum, you generally won’t pay any tax on them if you are aged over 60.

Income in Retirement – A self managed super fund offers the most flexible option for taking benefits in retirement, whether the benefits are taken as a pension or lump sum or both.

Insurance – Members of a self managed super fund are able to obtain total & permanent disability insurance and life insurance through their SMSF. The premium is paid by the super fund and is a tax deductible expense to the super fund.

Cost Effective - A self managed super fund can be a cheaper option than other superannuation alternatives. This is attributable to two factors: 1) The majority of expenses for a self managed fund are fixed in nature, while retail and industry funds charge fees as a percentage of assets under management. 2) With a self managed super fund you can consolidate up to 4 of your family’s super within a single fund. By doing so only one collective fee is paid, instead of each member paying separate fees.