The Top 11 Benefits Of Setting Up A Self Managed Super Fund

October 28, 2016

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By Yannick Leko

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The Top 11 Benefits Of Setting Up A Self Managed Super Fund
Posted on Friday, October 28th, 2016

Every year we see a population growth in Self Managed Super Funds, with over 1 Million SMSF Members in 2014.

Here are a few interesting facts about the recent growth of SMSFs:

  • There are now over 530,000 in Australia, which account for almost one third of Australia’s retirement funds.
  • Total assets in SMSFs increased by 12.5% in the 2013-14 financial year ($557 billion as of June 2014)
  • For the 5 years to 2013, SMSF was the fastest growing sector of the super industry.

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*data taken from ATO’s Self Managed Super Fund Statistical Report 2014 

So, what accounts for the impressive growth in the number of SMSFs, not to mention the total balance of funds?

Here are just 11 of the reasons we believe more people are turning to SMSFs

  1. You have greater control over investments and more investment opportunities.
  2. You can purchase real direct property, both commercial and residential. (It is also possible to rent the commercial property out to your business so that the rent is an income stream for the fund.)
  3. You can borrow to purchase investments in certain circumstances.
  4. It’s possible to have up to four people in a SMSF, which allows you to use more resources.
  5. You have far more control over your CGT position because you manage the buying and selling of assets, unlike being a member of another fund which will apply taxes to your fund balance upon the sale of an asset,regardless of when you became a member of their fund.
  6. There is far greater flexibility in managing your pension. There’s no need to sell assets when you begin to drawdown on your SMSF, and you may not pay any CGT when you do decide to sell assets.
  7. You can transfer personally owned shares, business real property and managed funds into your fund.
  8. You can invest in direct shares with a high level of franking credits.
  9. Funds with higher balances are not penalised, and usually receive lower fees than other funds.
  10. There may be no investment fees managing your share or commercial portfolio.
  11. Transactions in and out of the SMSF can be made on the same day so that if you need to make a last minute deductible contribution you can do it, which is not the with other super funds.
Peter Mastroianni
Peter Mastroianni is a property finance expert and the co-founder of Loans Only, specialising in investment lending. He is the author of two top-selling real estate books and host of The Rentvesting Podcast. Peter is passionate about supporting the next generation of investors rethink the traditional home ownership model. He does this by championing the ‘Rentvesting’ strategy through www.rentvesting.com.au.

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