A Self-Managed Super Fund (SMSF), is a small superannuation fund established under super law that gives you control over how your assets are invested and structured. Similar to other super funds, the purpose of a superannuation fund is to provide for you in retirement.
SMSF key facts:
- There are fewer than five members.
- Each member is a trustee.
- No member is an employee or member of another fund unless they are related.
- No trustee or director of the corporate trust can be paid for being a trustee.
At Anchor Wealth, our objective is to help you understand how a SMSFcan makes your retirement goals achievable. Together, we can ensure that your SMSF continues to meet your objectives over time. We also stay abreast of changes in legislation and compliance for SMSF’sso that we can pivot and change if needed, so that your SMSF is always working for your financial goals whilst remaining compliant.
HOW SMSF’s WORK
As a member of an SMSF, you are a trustee and involved in the funds’ operations. The SMSF has a bank account where income and expenses flow through, i.e. accounting expenses and income from investments.
Super law allows you to formulate and implement an investment strategy for your SMSF and invest the money accordingly. You and your member trustees decide how to reinvest income you have generated, via the investment strategy reflected in the trust deed. Bank account funds can be used to pay the funds expenses (for example, taxes and insurance premiums), and if the fund has retirees, pension payments can be paid.
The main advantages of an SMSF include:
Control– As a member, you act as a trustee and, therefore, you control how the fund makes its investments. You have control — so that your investment fund is as secure and as flexible as you need it to be.
An SMSF is subject to certain restrictions that allow Australians to invest directly in a range of assets including cash, securities, property, managed funds, real property, equity warrants, unit trusts, and derivatives.
A SMSF has significant tax benefits for you:
- Before-tax dollar contributions through salary sacrificing or claim a tax deduction in some circumstances for your contributions.
- Returns and capital growth are based on the lowest tax rate of any entity structure in Australia.
- Pension and lump sum benefits payments in retirement are generally untaxed, if ove the age of 60.