If you have ever thought about opening a Self-managed super fund, you may be thinking there are many advantages and benefits, and these are all positive. Remember however, there are professionals out there that specialize in self-managed funds for a reason. Getting started may not be as simple as you think. Here are a couple of things you may like to consider before opening a SMSF:
What can you invest in?
- Shares – physical gold and other commodities
- Fixed interests – collectables
- Property (residential and commercial).
Advantages/Benefits
- You get to choose how to invest and manage your savings, giving you greater control of your assets
- Have the option to pool your super with up to 3 other members to increase your investment opportunities
- There is greater flexibility in specifying how death benefits can be paid
- Any income produced solely by assets to support an income stream (ie pension) may not have any tax payable within the fund on that income
- If you hold a commercial property for more than a year any Capital Gains is reduced by 33.3%.
Disadvantages
- Can be quite expensive and time consuming
- You cannot access any of the funds until you retire
- Any property you acquire must be kept at arms-length. Ie commercial rates apply to every party
- Every fund has strict compliance laws you need to abide by. The fund will be audited every year to ensure you adhere to these guidelines
- You are responsible for your own decisions. The onus is on you to make a positive investment and maintain it for the benefit of the members.