Benefits of Self Managed Super Funds
Of the $1.23 trillion invested in super at 30 June 2010, $390.8 billion was in self
managed super funds (SMSFs). That’s 31.8% of all superannuation funds, with SMSFs
now representing the largest slice of the super industry.
For many Australians, SMSFs offer 4 major advantages:
- More control over investments.
- Greater investment flexibility.
- Generally lower fees than industry and retail funds.
- On average, better performance than industry and retail funds.
More control and greater flexibility over investments
SMSF members can choose where their retirement savings are invested, with options
including listed shares, bonds, listed investment companies (LICs), exchange traded
funds (ETFs) and direct property.
This flexibility in investment options allows SMSF members to actively manage their
investments. With a hands-on investment approach, SMSF members can quickly adjust
their portfolios as markets change.
Lower fees and better performance
A Commonwealth Government report titled A Statistical Summary of Self-Managed Superannuation
Funds (Dec 2009), based on ATO and APRA data, found SMSF members generally pay lower
fees and that, on average, SMSF investments performed better than all other super
funds over 2006, 2007 and 2008.
How an SMSF could benefit you
Depending on your individual situation, the advantages of an SMSF may include:
- tailored tax management on investment income and capital gains
- greater flexibility in investment choices and asset selection
- control over your total investment portfolio, with the ability to take account of
the risk profile of all your assets, including those held outside superannuation
- the ability to pool your resources with up to 4 fund members with similar financial
objectives, such as family members
- maximum flexibility in establishing and managing pensions, including account based,
transition to retirement and term allocated pensions
- greater flexibility for accessing Centrelink benefits such as the age pension
- investing in direct property
- the ability to transfer personally owned listed shares, business real property and
managed funds directly into your superannuation fund, and
- the ability to own business real property in your superannuation fund, to assist
your business cashflow.
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