Superannuation is a highly tax effective vehicle to invest long term and save for retirement. It can also be a source to pay for your life insurances if your cash flow is limited. Here at Approved, we will tailor a superannuation strategy for you that helps you to maximise tax concessions and/or government benefits to ensure you have enough when you stop working.
- Assisting you to develop retirement goals that match with the type of lifestyle you would like to have in retirement
- Advice in regards to existing / established funds
- Consolidation of funds to provide ease of management and reduce fees
- Selection of investment options that match with your attitudes towards investing
- Review and recommendations of insurance solutions within your superannuation fund
- Advice around salary sacrifice and other strategies that help boost your retirement savings.
How self-managed super funds work
SMSFs are a legal tax structure with the sole purpose of providing for your retirement. SMSFs are regulated by the Australian Taxation Office (ATO).
An SMSF can have one to four members. Each member is a trustee (or director if there is a corporate trustee).
Running your own fund is complex. When you run your own SMSF you must:
- Carry out the role of trustee or director, which imposes important legal duties on you
- Set and follow an investment strategy that ensures the fund is likely to meet your retirement needs
- Use the money only to provide retirement benefits
- Keep comprehensive records and arrange an annual audit by an approved SMSF auditor.
If you decide to set up an SMSF you are personally liable for all the decisions made by the fund even if you get help from a professional or another member makes the decision.
If you’re running an SMSF you will typically need:
- A large amount of money in the fund to make set up and yearly running costs worthwhile
- To budget for ongoing expenses such as professional accounting, tax, audit, legal and financial advice
- Enough time to research investments and manage the fund
- The financial experience and skills to make sound investment decisions
- To organise life insurance, including Income Protection and Total and Permanent Disability cover.
You can pay an adviser a fee to do the administration or help with the investment decisions for your SMSF. However, make sure you understand what your adviser is doing because you cannot pass on the responsibility of being a trustee or director
Having access to a broader range of investments is often a reason for starting an SMSF. Through an SMSF you can invest in the usual investments such as shares, term deposits, managed funds and property. You can also hold alternative assets such as antiques and artwork in an SMSF.
The ability to choose your own shares may have been a driver for setting up an SMSF, but unless you have a lot of money to invest, you are unlikely to be as diversified as a fund manager, who has the advantage of using pooled funds to buy a broad range of shares.
Some people use their SMSF to invest in property. For information on the rules around property investment within super and the costs involved go to our SMSFs and property webpage.
Many SMSFs hold collectibles such as artwork, jewellery, antiques, coins, stamps, vintage cars and wine. There are very strict rules on holding these assets in your SMSF.
These assets, when held within an SMSF, must be insured and they cannot provide a present day benefit. This means that artwork cannot be displayed in your home or business, you cannot drive a vintage car, you cannot wear jewellery or drink the wine. For more information, see the ATOs webpage on collectibles and personal use assets.