Benefits of Self-Managed Superannuation Fund (SMSF) Over Other Funds
Everyone wants to secure their future, especially when it comes to retirement. There are various ways by which people have been saving for their future in Australia. Over the five or so years people have started investing in a new type of asset class known as crypto in a SMSF. For most of the population, it may be an unknown term.
Over the last financial year SMSF’s have had one of their best years in terms of new SMSF’s opened and now there are well over 1m SMSF’s in existence. Crypto is also a new asset class with approx. 2% of all SMSF super invested in this asset class.
So why start and SMSF? Suppose you are someone who wants to take complete control and want to become more involved in their superannuation. Based on the latest data statistics, the SMSFs hold approximately one-third of the total superannuation funds. They are often the preferred choice for people who are highly engaged with their superannuation and retirement planning. That there are many advantages of SMSFs that we will talk about.
SMSF can borrow to Buy property
Using the SMSFs, the trustee can borrow money from the funds and buy single significant assets such as commercial or residential property that is impossible in other kinds of funds or schemes. For example, a couple with a combined SMSF balance of $200,000 can take a loan and buy a property worth $400,000.
Transferring your wealth to the next generation
The other benefit of using the SMSFs is that you can use the fund to transfer it to your future generations. You can participate in several helpful estate planning that offers benefits, control, and flexibility over a member’s estate plan. By this, you can ensure that the funds from the SMSF go to the right people at the right time and with the minimum tax deductions.
Perhaps the most obvious benefit of using the SMSFs is the level of accountability that every member has. As the trustee and member, you will have more control and know where all the investments have been made. You are effectively the fund manager. It is one option that is simply missing from the Retail Super Funds due to their size. With SMSF, you get to keep track of the value of your super regularly and give you the ability to track the outcome of your investments and make the management of your fund easier.
Costs of running your fund
SMSFs are a much more cost-effective option as you don’t have to pay high fees. The cost has come down due to technological advances and competition between service providers. The operational costs of running an SMSF are fixed. As the fund grows in value, its fees will generally reduce proportionally, thus making it one of the most cost-effective options when your superannuation portfolio gets over a certain value.
Asset protection protects the members from litigation and bankruptcy. In any of the cases, your superannuation benefits will likely be covered. In the event of an investment failure, a business owner may be left with their superannuation balance as their only remaining asset. However, as superannuation is intended for retirement, you can help us with that fund to save a struggling business.
Self-Managed Super Funds are popular today. You must be willing to take on the responsibilities and may need the help of an expert financial guide and educate you along the way.
Thinking of investing in a crypto based SMSF or need help with the tax, audit and compliance of your SMSF. Feel free to contact us