How to have a secured future with SMSF
A Self-Managed Super Fund (SMSF), is set up solely for the purpose of saving up for retirement. When managed and administered properly, members can have a secured future with SMSF.
How does SMSF work?
Unique to other supers, SMSF members are also the trustees or directors of their fund. In addition, members receive contributions and rollovers, make investments and pay out lump sums and pensions through their SMSF. Moreover, the retirement benefits a SMSF provides allows members to achieve their future financial needs.
Moreover, trustees have full control over managing their SMSFs. Trustees are responsible for deciding how the fund should be run while maintaining its compliance with super and tax laws.
Trustees must have a documented investment strategy, outlining the fund’s objectives, before they can set up a SMSF. Furthermore, this investment strategy will serve as a guide to every investment decision to the fund made by the trustees.
What are the benefits of a SMSF?
Aside from retirement benefits, there are other benefits that members of a SMSF can also enjoy such as:
- Flexible Tax
If the SMSF is compliant with super legislations, the members’ contributions and fund earnings will be taxed at 15%. This is indeed a lower rate compared to other supers. Also, after the age of 60, the benefits you will receive will be tax free. Likewise, when the SMSF is in pension mode, fund earnings also become tax free.
- Investment control
Since, trustees have control over their fund, they have the freedom to quickly act on an investment opportunity. Further, they can invest in practically all the products available to public funds.
- Estate planning
SMSF also allows members access to flexible member death benefits. For example, you have the option to distribute your funds future members of your family or paid as a pension.
- Rare assets
Aside from having full control over your investments, SMSF also allows you to invest in less popular or rare assets. For example, you can buy gold or invest in art, antiques, or collectibles which is not possible with other supers.
Is SMSF right for you?
Indeed, the number of benefits SMSFs provide members are broader and more flexible than other public funds. However, experts warn that SMSF is not for everyone.
Although, SMSFs provide access to a broad range of investments choices, they come with stricter administrative responsibilities and compliance regulations.
Moreover, the regulations and policies for SMSFs are constantly evolving. Hence, you must ensure that your knowledge on SMSFs is always up to date. You also have to consider the costs involved with setting up and managing an SMSF.
The Australian Taxation Office (ATO) regulates all SMSFs. Further, the ATO ensures that each SMSF complies with financial reporting and taxation obligations. Hence, you have to have some legal expertise to meet the legislative and tax compliance regulations for SMSFs.
Managing a SMSF can also be very time intensive. You have to dedicate a lot of your time managing your SMSF, otherwise, your investment might suffer. There are also several administrative tasks you must complete are:
- lodging a combined fund income tax and regulatory return annually
- ensuring the SMSF accepts contributions from its members
- notifying the ATO of changes in the fund’s details
- maintaining proper and accurate tax and super records
Since you will be responsible for setting your investment strategy, you need to have knowledge on investment. In addition, you need to have a good understanding of financial markets. Moreover, the ATO has placed a number of restrictions on investments made with SMSFs that you have to comply with.
How can you have a secured future with SMSF?
For you to successfully administer your SMSF yourself, you need to have solid investment experience and a lifestyle with a lot of free time. However, if you don’t have the specialised knowledge and expertise, you can always get a SMSF Administrator to help with your fund.
Hiring an SMSF Administrator to manage and administer your fund for you can give you several benefits, such as:
- Save you time – delegating the SMSF admin work will free up your time
- Less stressful process – remove the burden of meeting obligations with the ATO and keeping track of reporting deadlines
- Peace of mind – sleep better knowing your fund remains compliant with super guidance and tax laws
DBA Advisory offers a full range of SMSF Administration services, including:
- SMSF setup, establishment, fund rollover, and wind-ups
- SMSF compliance and administration services
- Drafting of minutes and investment strategies
- Preparation of annual financial statements, and preparation and lodgment of SMSF annual returns and other reports
- Daily reconciliation of investment records, daily bank reconciliation, setup of account-based pensions and income stream calculation to pension and contribution caps monitoring, and transfer balance cap monitoring.
In addition, our SMSF Administration Division is composed of experienced SMSF accountants. Thus, they can expertly establish your SMSF based on your needs and requirements for your future.
They are also equipped with the basic technical skills and can run any SMSF software available. Hence, you will receive high quality and timely reports, for you to make the best investment decision and secure your future.
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