the SMSF Myth or Mission

Is a Self Managed Super Fund (SMSF) right for you? Or Maybe you already have a SMSF but want to make it work harder for you?

More than a Million Australians run their own SMSF. But the small business clients talk and the news media is in a frenzy about SMSF’s and property investments.

We understand that SMSF’s don’t suit everyone, so it’s important you get the right information to decide for yourself and discuss with an SMSF specialist advisor.

To assist you to make a correctly informed choice, here are the FACTS:

Why do people set up their own SMSF?

  • To be able to make their own decisions about where their super is invested.
  • To invest in your own chosen property (business premises or residential).

Is it expensive to set up a SMSF?

No, it isn’t. You need a SMSF Trust Deed (the document that contains all of the rules for running your super fund) and we recommend you incorporate a Company to be the Trustee (the decision maker) for the SMSF. Our price for this is $3,000 plus GST, which includes preparation of all required documents, the establishment of a new Cash Management Account, and everything legally required for a SMSF. For example, if you have $200,000 in super, then the setup costs are 1.5% of your super balance – very low for setting up your financial future!

What are the ongoing running costs of a SMSF?

The ongoing costs start from as little as $200 + GST per month for the administration of your SMSF (includes tax returns, annual financial statements, minutes of Trustee’s meetings) plus $500 + GST for the annual audit of your SMSF.

How does a SMSF compare with standard super?

This is where you’re comparing apples and oranges, with any fund as no fund is created the same or invested the same. It’s important to understand why an SMSF will suit you and your needs, not just about cost or performance. Some SMSF maybe more costly and outperform, but other maybe cheaper and still outperform depending on the investment strategy.

How much super do I need to set up a SMSF?

Some media stories suggest you need at least $200,000 (or even higher) to make it cost effective to have a SMSF. We disagree. A SMSF is your family wealth creation vehicle. Even if you have as little as $100,000 in super right now, it may make sense to establish a SMSF and then set up life insurance (owned by the SMSF) on SMSF members while they are still fit and healthy. Also, in many situations using a SMSF can give you much better estate planning options and wealth creation options.

As an example, if you have $100,000 in super and purchase a property (using a borrowing arrangement) valued at $400,000, then you would have a SMSF with $400,000 in gross assets. Assuming a capital growth rate of 5%, you would generally expect the larger amount of $400,000 growing would provide a better outcome than the smaller amount of $100,000 growing. This is why many people consider a borrowing arrangement for a SMSF.

What investments can I make in a SMSF?

Typical investments include shares, cash, term deposits, and property. There are specific rules about what you can invest in, so it’s important you seek our advice before you make any decisions and ensure your fund and it’s investment stratgety is right for you and your circumstances.

FREE SMSF Consultation – Book NOW!

To assist you to make an informed decision, contact us TODAY on (02) 6041 1687  for a FREE consultation. We can clearly explain, using our SMSF Comparison Report, the benefits of a SMSF and whether or not a SMSF is the right thing for you.

Don’t delay. The sooner you get started with the right advice, the sooner you will grow your assets to have a better financial future!

This article is provided as general information only and does not consider your client’s specific situation, objectives or needs. It does not represent accounting advice upon which any person may act. Implementation and suitability requires a detailed analysis of a client’s specific circumstances.