What is a Self Managed Super Fund?

A Self Managed Superannuation Fund (SMSF) is one where you, as a trustee and member, have responsibility over the management, investment and administration of your super fund. SMSFs are quite different from other super funds because they're run by you, for you and any other members of your SMSF. SMSFs are established for the purpose of building retirement savings.

A super fund (except in the case of a single member fund) is an SMSF if all of the following apply:

  • the fund has up to four members
  • if the trustees of the fund are individuals, each individual trustee is a member
  • if the trustee of the fund is a corporation, each director of the corporation is a member each member is a trustee of the fund or a director of the corporate trustee of the fund
  • no member is an employee of another member, unless they are related and
  • no trustee of the fund (or director of a corporate trustee) is paid for services performed in relation to the fund, except in certain limited circumstances.

It is also possible for you to set up your fund with only one member.

SMSF structures can be quite simple or complex depending on your needs. There's a lot to consider, but you can outsource aspects, such as administration, to save you time and free you up to focus on what's important to you.

Benefits of SMSF

The benefits of SMSFs include:

  • Greater control over your super, as you make the key decisions and you're in charge of where you invest your money.
  • Flexibility and choice. You construct your fund's investment strategy and enjoy more investment choice. The choice of investments in SMSFs is far greater than what other super arrangements can offer. You can invest in property, direct shares, cash, term deposits and more.
  • Costs. You are in control of what services you require and how much you pay for them.
  • Tax advantages. There are potential tax savings in SMSFs depending on your personal circumstances and investment strategy.
  • Pool your super with family or other members of the fund, for potential cost savings.
  • The potential to borrow to buy a property within your super fund.
  • Insurance can be included in your SMSF to protect your income and assets, for example life insurance, total and permanent disability (TPD) and income protection.
  • Planning for when you're not around, by specifying who you want to leave your money to.

Download your copy of a Macquarie Bank report "Self Managed Super Funds - take control of your future" which is a comprehensive overview of SMSF, by clicking on the report below.

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