What is a Self Managed Superannuation Fund (SMSF)?

Like other superannuation funds, SMSFs invest members’ contributions and in turn provide benefits to members at retirement, or death benefits to beneficiaries.

The main difference between SMSFs and other types of superannuation funds is that as an SMSF member you also act as a Trustee. The Trustee is the manager of the fund, the legal owner of the assets and has the job of making sure the fund is administered correctly.

This means Trustees who are also members have a lot more control, but also increased responsibilities over their fund, especially in the area of investing the fund’s assets.

One of the key advantages of SMSFs is that Trustees can choose how to invest the fund’s assets. All Members are Trustees and therefore have full control over where their retirement savings are invested. This has both its benefits and considerations including:

  • Increased control over investment decisions
  • Greater flexibility
  • Wider investment choices
  • More estate planning options
  • Ability to tailor your investment strategy to suit your specific needs and circumstances
  • Ability to invest to maximise tax efficiencies and cost savings
  • Ability to pool your resources with your spouse’s superannuation benefits to help reduce costs or acquire high-cost investments
  • Retirement income streams can be tailored to suit your needs
  • Ability to gear your superannuation savings by implementing a limited recourse borrowing arrangement

Speak to your Financial Planner or Accountant today to see if this is a suitable strategy for you.