A self managed super fund (or SMSF) is one of the most up and coming trends for investing your superannuation (a regular payment made by an employee into a pension fund). For years, the trend used to be investing those payments into either a retail or an industry superfund. Times are changing and, according to www.smsfselfmanagedsuperfund.com.au, one of the best ways to invest over the last ten years is into a self managed super fund.
What are the best reasons to invest in an SMSF?
- An SMSF helps you to take control of your superannuation – This type of fund allows you to choose where you invest your money. Being able to choose between different types of investments (international shares, residential and commercial property, term deposits, etc) puts the control back in your hands. If your money isn’t performing like you’d like it to, change it! The power is yours to get the returns you’re hoping to see.
- An SMSF will allow you to save money on fees – SMSF funds are one of the most cost effective funds out there. Most fees are set, no matter how much money you have to invest in your self managed super fund. This is very different from a lot of other funds. If you are investing a thousand or ten thousand, you should end up paying the same amount. This is especially beneficial for those just starting out.
- An SMSF allows you to manage up to four superannuations in one single fund – If you’re managing other people’s funds as well as your own, changing to a self managed super fund allows you to consolidate to a fund with one annual fee. This usually counts for up to 4 people.
- An SMSF allows you to combine Pension and Accumulation funds in one place – With some standard funds (namely, retail and industry funds), your money is separated into two different funds : one pension fund and one accumulation fund. An SMSF allows those benefits to be combined and managed in a single place. This reduces the fees you have to pay to manage two separate funds into one.
- An SMSF allows you to transfer personal assets into a fund – Instead of cash, a self managed super fund allows you to contribute assets (for example : managed funds, shares, and commercial property). These are called specie contributions and allows you to consolidate or combine family assets under a single tax umbrella. However, you should make sure you consider capital gain taxes in this type of contribution. Depending on the amount you are investing, it might not make sense in relation to the taxes.
In closing, you should definitely consider the advantages of switching your money to a self managed super fund to make the most efficient use of your investments with the fewest fees. It allows you to combine multiple funds, multiple users and gives you the flexibility to invest how you want to invest.