Retirement Planning Gold Coast: Should You Choose a Self-Managed Super Fund?
Any retirement planning Gold Coast professional will tell you that the sooner you begin, the better off you will be. That’s why every Australian should learn about retirement savings and expenses now rather than when they need them. The self-managed super fund is one option that may provide the best results for you.
What is a Self-Managed Super Fund (SMSF)?
An SMSF is a trust structure that provides benefits to members and their beneficiaries when they retire. Unlike other super funds, members of an SMSF are also trustees. This structure can include one to four members. It is given a Tax File Number and Australian Business Number. It will also have a transactional bank account to receive contributions and rollovers, to pay pensions and to make investments. All investments the SMSF makes are done under the name of the fund and are controlled by its trustees.
Being an SMSF Trustee
There are two trustee structures used in SMSFs. One is a corporate trustee, which is a company that acts as the trustee while members are directors. This approach is simpler and more efficient and flexible when it comes to membership. Other SMSFs make each member a trustee.
As an SMSF trustee, you would be responsible for helping with investment decisions and strategy implementation. There are strict administrative obligations when keeping records, tax returns, audits, and financial statements. That’s why many trustees hire a retirement planning Gold Coast professional (like us at Oculus) to assist them.
What Are the Benefits of an SMSF?
One of the main benefits of an SMSF is the investment control. Trustees have a say in decisions and investment choices. They can also access derivatives and more when hedging risk or implementing downside protection. Other SMSF benefits include:
- The Ability to Borrow for Investments
SMSFs are permitted to borrow to fund investments. For example, a couple with a $200,000 SMSF balance could receive a limited recourse loan to buy property with a value of $400,000. This type of funding can be obtained for 60% to 70% of the purchase price. However, when utilising this benefit, the property cannot be lived in by the trustee or their relatives. Borrowed funds can be used for maintenance on the property, but not for improvements.
- Minimised Taxes for SMSFs
Trustees can minimise taxes through their SMSFs. This can be done by timing contributions and allocating earnings to certain members or reserves. Greater flexibility allows trustees to build a unique strategy that keeps tax obligations as low as possible. In a public superannuation, individual circumstances are not considered which means that a trustee could make a decision that negatively affects another.
- Tax Benefits for Family Members
Future Service Benefit Deductions and other strategies allow trustees to extend tax benefits to their family members. A large tax deduction could translate into years of tax-free funds after a member’s death.
Retirement Planning Gold Coast
Retirement planning starts with Oculus Group. We offer a team of experts who can discuss your needs and come up with a plan that works based on your income, budget, and expectations. Invest in our expertise now so that you can enjoy a comfortable retirement later.