Investing into your retirement days is something everyone should try to do one way or another, in order to ensure a financial peace of mind when they’re old and spent. One such investment strategy is the SMSF, which has significantly grown in popularity the past few decades in Australia and for all the right reasons.
It’s a fund where the trustees get to decide how their fund is managed and they have a lot of control over where all their money is invested. Having transparent visibility over your savings lets you get a better grasp over how their overall wealth is coming along. This gives them confidence in the lifestyle decisions and investments. There are significant advantages in having a sample SMSF investment strategy, some of them include:
Choice of Investments
This fund provides much more investment options than any other fund. As a trustee, you can access direct shares, term deposits, income investments, direct property, international markets, unlisted assets, collectables, high-yielding cash accounts and more. Moreover, having a sample SMSF investment strategy benefits you tax wise. There are concessional tax rates for this fund, and during the accumulation phase your tax on investment income is maxed at 15%, while there’s no payable tax (including capital gains tax) during the retirement phase. After you carefully consider your tax strategies, you can grow your saving and reduce tax payments as you enter your pension phase.
The self-managed super fund allows different members of the fund to run a mixture of pension and accumulation account. Each and every one of them can adjust their investments as it suits them, which allows them to make fast changes in market conditions, personal circumstances and super rules. Trustees can also align their personal goals with their investments. In other words, whether you’re passionate about shares, property or ethical and sustainable investing, SMSF lets you know where your money is invested and offers 100% visibility over tax treatment and performance.
SMSF allows a group of 4 trustees to combine their super assets. This consolidates the supper accounts and makes the fund balance much bigger, which increases the fund’s investment opportunities and assets with a single set of fees. ATO fees are also capped instead of based on a percentage. This means, the more your fund grows, the more cost-effective it gets. However, the costs may vary depending on whether you’re engaging professional support and on the investments you make.
While there are many benefits to the SMSF, there are also a lot of risks and considerations you should be aware of. These include insurance covers, trustee responsibilities, cost-effectiveness covers, the trust deed, and a couple more.