Did you know that as of March 2024, there were 616,400 Self-Managed Superannuation Funds (SMSFs) in Australia, collectively managed by over 1.1 million members? While SMSFs account for less than 5% of the country’s population, they represent a significant portion of Australia’s superannuation assets, holding $933 billion in value.

So, what makes SMSFs so popular? Here are the top 10 benefits of having a Self-Managed Superannuation Fund:

1. Greater Control Over Investment Choices

One of the primary advantages of an SMSF is the wide range of investment options available. Unlike retail or industry super funds, SMSFs provide members with greater flexibility to:

• Invest in direct shares (domestic and international)
• Purchase residential and commercial property
• Acquire physical gold and other precious metals
• Invest in collectibles and art (under strict rules)
• Use term deposits and high-interest savings accounts

This flexibility enables members to align their investment strategy with personal financial goals and risk tolerance.

2. Broader Investment Options

SMSFs allow you to diversify your portfolio by investing in assets such as:

• Residential or commercial property
• Exchange-traded funds (ETFs)
• International shares

Diversification helps spread risk and potentially maximizes returns.

3. Tax Advantages

SMSFs offer several tax benefits, including:

• A concessional tax rate of 15% on earnings in the accumulation phase
• Tax-free earnings in the retirement phase (for balances up to $1.7 million per member as of 2023-24)
• Opportunities to implement tax-effective strategies like transitioning to retirement

4. Cost Savings for Larger Funds

While SMSFs have administrative and compliance costs, these can become relatively lower as a percentage of assets once the fund grows beyond $200,000. Fixed fees often result in significant savings compared to percentage-based fees charged by traditional super funds.

5. Pooling Resources With Family Members

An SMSF can include up to six members, enabling you to pool resources with family members or business associates. Benefits include:

• Greater purchasing power for investments
• Shared operational costs
• Opportunities for intergenerational wealth transfer strategies

6. Direct Property Investment

Unlike most retail super funds, SMSFs allow direct investment in residential and commercial properties. This provides opportunities to:

• Purchase your business premises through your SMSF
• Invest in residential property using a limited recourse borrowing arrangement (LRBA)
• Potentially reduce capital gains tax on property investments

7. Flexibility in Pension Payments

SMSFs provide greater flexibility in structuring pension payments to suit your needs. You can tailor pension strategies for tax effectiveness and adjust the amount drawn down as your circumstances change.

8. Customised Insurance Coverage

SMSFs allow members to customize insurance coverage, including:

• Life insurance
• Total and permanent disability (TPD) insurance
• Income protection insurance

This flexibility often results in more comprehensive and cost-effective coverage than what retail super funds offer.

9. Transparency and Control Over Costs

SMSFs offer complete visibility of all associated costs. You decide how much to spend on administration, auditing, or investment advice. This transparency helps in controlling expenditures and improving long-term cost efficiency.

10. Building a Secure Financial Future

An SMSF provides opportunities to:

• Align your super investments with your financial goals
• Control your retirement savings
• Secure a legacy for your family

Take Control of Your Retirement With Supertax

At Supertax, we specialize in helping individuals establish and manage SMSFs efficiently. From creating personalized investment strategies to ensuring compliance with ATO regulations, we’re here to guide you every step of the way.

Ready to reap the rewards of an SMSF? Contact Supertax today:

• Email: info@mysupertax.com.au
• Phone: 0424413808
• Address: Suite 1, 7 Bridge St, Werribee, Vic 3030
• Website: www.mysupertax.com.au