SMSF in a Nutshell

SMSF Pros and Cons that will help

you take an informed decision

What is it all about?

Self Managed Superannuation Funds is one of the most preferred

investment options for most people in

Australia. So, what is it all about?

Read the article to know some of its

major advantages as well as

disadvantages.

SMSF Setup and Audit Services

Superannuation fund is an arrangement

for long term savings. Mostly aimed at

retirees, it enables people to contribute to

a fund. This fund is open to employees,

self-employed people among others and

provides numerous benefits to the

members of this trust and on certain

conditions, the government taxes these

savings at lower rates.

SMSF Setup and Audit Services

This same superannuation fund becomes

SMSF (Self Managed Super Fund) under

certain criteria. For instance, it has to

have less than five members and each

individual trustee is a fund member.

These criteria are no deterrent to peoples

and they keep on investing in it for

numerous advantages provided.

SMSF Setup and Audit Services

(SELF MANAGED SUPER FUND)

Advantages of SMSF

Complete control over the fund

The investor has full control over the

fund’s investments. For instance, he can

invest the fund in various assets such as

real estate, shares and even bank

deposits. However, he must strategize his

investment properly and steer it in the

right direction.

SMSF Setup and Audit Services

Continues after death

Setting up a SMSF not only benefits you,

but your entire family as well. In the event

of your death, the fund continues to give

the same benefits to your partner and

children. They can either let it be as it is or

even plan to invest it somewhere else.

Flexibility in the rules

As an investor, you get to decide the rules

of the fund and how it should operate to a

certain extent. For instance, you can

restrict the payment terms. This control

over the fund’s operation is one of its

major benefits.

SMSF Setup and Audit Services

A cost-effective option

The overall cost of a self super fund does

not increase with the growth in your

investment in it. This obviously means that

more the account balance you have, the

more cost-effective your fund will be.

Moreover, it must be noted that they do

not need to be licensed, which also saves

a few bucks.

Concessions on tax

As mentioned earlier, a SMSF allows the

investor to get tax concessions under

certain terms and conditions. For

instance, you can get a deferral of lump

sum tax , when the investment is in the

pension phase.

So, these were some of the major

advantages provided by a self managed

super fund. But then, every coin has two

sides. Likewise, a Self Managed Super

Fund also comes with its share of

disadvantages.

(SELF MANAGED SUPER FUND)

Disadvantages of SMSF

Taking responsibility

As a trustee of the fund or the director of

a corporate trustee, it is you who will be

responsible for the overall administration,

investment and other pivotal issues

related to the fund.

SMSF Setup and Audit Services

Can be expensive

Smaller SMSF funds will incur more SMSF

administration costs and can be pretty

expensive to maintain. Moreover, setting

up a SMSF with initial set up costs can

vary and go up.

Time consuming

To manage a self super fund, you need to

put in a lot of your time and efforts. This is

not possible for many.

To sum it all up

These were some of the advantages and

disadvantages of a Self Managed Super

Fund, which must have given you a heads

up. However, it is advisable that you

consult an investment expert or seek help

from a professional SMSF company.

Good luck!

Contact iCare SMSF

iCare Super

Level 1, 1 Oxley Road

HAWTHORN VIC 3122

Australia

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Website: http://www.icaresmsf.com.au/

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