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An Investor’s Guide to Self-Managed Super Funds

For those looking to grow their wealth and increase their investments, there’s no better time to do so than now, as lenders and other entities continue to roll out widely available financial measures. 

There are many different strategies for investors to use to grow their bank accounts. One particular strategy is investing in a Self-Managed Super Fund (SMSF). Often those who invest through an SMSF do so for the control, flexibility and choice over how their retirement savings are invested.

However, it’s important to know that with an SMSF comes a fair amount of responsibility, as you are in charge of understanding the nature of the investments on offer and ensuring that they fit into your overall investment strategy. 

Defining Self-Managed Superannuation Funds

A Self-Managed Superannuation Fund is a type of do-it-yourself superannuation fund consisting of one to four members. Each registered member is a trustee of the fund, leaving them with the ability to manage it for more returns in the long run. 

When registering or starting an SMSF, you need to create a trust (a legal tax structure) with either individual or corporate trustees. Through the help of the trust, you’ll have a reference point for the following areas of concern:

  • The rules of operation
  • Guidelines on membership
  • Guidelines on investments
  • Guidelines on death benefits

Regarding taxation, the standards concerning SMSFs are rather straightforward in terms of how you should go about lodging your returns. Based on the current guidelines enforced by the Australian Taxation Office (ATO), these funds require an annual audit and a tax return filed each year. 

What Are The Benefits of SMSF and Who Are They For 

When it comes to understanding precisely why it may be significant for you to use an SMSF, there are several key advantages to look forward to (which make it worth investing in). 

Here are some of the most common benefits of these funds if you are interested in using an SMSF:

  • A more comprehensive range of investment options to choose from (as compared to standard super fund options);
  • Greater transparency in terms of investment history and transactions;
  • Flexibility in terms of accounts and systems (such as accumulation accounts and pension accounts);
  • Opportunities to use measures and appropriate strategies to maximise savings;
  • Capped associated costs (instead of the regular variable cost systems that are used for standard super funds).

Another couple of important benefits to highlight if you are someone looking to start using an SMSF is:

1. Having greater flexibility with tax: 

SMSFs have more flexibility to use tax strategies around capital gains, or taxable income.

2. Greater Asset Protection:

SMSFs can provide an effective way of protecting your assets against the risk of bankruptcy or other claims by creditors. This can be a particularly attractive benefit for business owners and professionals. 

SMSFs may be tax beneficial if you are self-employed to help you save for retirement. 

In Australia’s growing investment market, Self-Managed Superannuation Funds stand out as one of the most prominent tools that investors and wealthy individuals can use today. By using these solutions to your advantage, you can significantly improve the growth of your investment portfolio and yield maximum returns! 

If you’re looking for the best financial planning packages that will help you stay on top of your finances early on, EJM Financial Services is more than happy to help. 

Get in touch with our experts today!

EJM Financial Services Pty Ltd (ABN 63 006 492 182), is an Authorised Representative and credit representative of AMP Financial Planning Pty Limited, Australian Financial Services Licensee 232706 and Australian Credit Licence 32706. AMPFP Privacy Policy. Please read our Terms and conditions.
General Advice Warning: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.


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