SMSF
Self Managed Superannuation Funds
Self managed super funds are ideal for investors who want greater control over the operation, management and investment strategy of their superannuation assets. However, a SMSF is not suitable for every investor, so it’s vital to know what is right for you. The team at Makari & Co can assess whether the SMSF concept is suitable for you. The benefits of a SMSF include:
Control over investments – You have direct input into how your retirement savings are invested. This means that you can tailor an investment strategy specific to your needs and financial circumstances.
Investment flexibility – You have access to a large variety of investment products not typically available through traditional retail funds.
Tax concessions – Franking credits generated by share investments can help to offset tax liabilities, including earnings, contributions and capital gains tax. Superfunds are taxed at a rate of 15%.
Cost-effective – High net wealth individuals and small to medium-sized business owners with over $100,000 in superannuation assets may incur lower administration costs than they would using traditional retail super funds. As the level of assets within a SMSF increases, these costs as a percentage of the fund’s assets may reduce.
Estate planning opportunities – A SMSF can be passed on tax-effectively to nominated beneficiaries, including adult children or young dependants. In the event of bankruptcy, assets held within the fund may also be protected from creditors.
Fund portability – Unlike an employer sponsored fund, where a change of career can mean having to set up a new super fund or having to consolidate existing funds, a SMSF is flexible enough to follow you through your career.
Some super ways to save tax
Five top super tips
Your super could be the most tax-effective way for you to save, invest and build wealth for your future, by making clever use of Makari & Co.’s super tax advantage strategies. You may pay significantly less tax.
- Self-employed? Use your super to save tax
If you are classed as self-employed or substantially self-employed and meet eligibility criteria for tax purposes, your contribution to super may be fully tax deductible. - Give your spouse some super and receive a tax rebate
Contributing money to your spouse’s super is another tax effective way to invest for your future together. To receive the full rebate, you must have satisfied the assessable income (including exempt income and reportable fringe benefits) criteria. - Try sacrificing
Salary sacrifice is where your employer makes deductions from your before-tax salary to make super contributions. It means you’ll probably pay only 15% tax on your super contributions*, instead of making investments from what’s left with your after-tax salary. - Concessional tax treatment means faster growth
The maximum tax rate on your super investment earnings is only 15%. Compare this to your marginal tax rate, which could be 48.5% (including the Medicare Levy). This means that you may have more money in super and has the potential to grow faster, with complimentary returns. - Top up by regular contributions or ad hoc contributions
The Government dictates mandatory super contributions equal to 9% of your earnings base. However, most experts agree that this level may not be adequate to meet most people’s potential needs in retirement. They recommend a level closer to 15% of annual income.
For further information about Self Managed Super Fund, or like to get more articles or assistance in your own SMSF, please feel free to contact us.
