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Three benefits of SMSFs

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Have you ever been caught daydreaming about your super? Boring? Never! Too may of us don’t think enough about this nest egg that keeps piling up while we work.

Now some of us like to think of looking after our super ourselves. Setting up a self-managed super fund makes a lot of sense if you like to take control, but looking after your super nest egg needs to be something that’s right for you? Let me be frank – SMSFs can be a taxing affair (they can attract a nice tax rate but  they do require a lot of grunt work).  

Perhaps this is where I can help. I’m appearing at the Trading & Investment Expo next Friday, where I’ll dive into the SMSF pool to discuss the pros and cons, obligations and issues, and investment strategies surrounding DIY super. If the idea of controlling your super has appeal, or you currently have your very own SMSF but want to make the most of it, come along.

For those not quite sure about an SMSF, here are three reasons why an SMSF could be the way to go.  

1. My money, my way

Are you a dedicated investor who likes to keep a tight reign on where your money goes? SMSF trustees have ultimate control over how they invest their nest egg (of course, it must be legally compliant) and, as a trustee, you’ll know exactly where your money is, where it’s going, and how it’s invested.  

2. Keeping it in the family

An SMSF allows four family members to participate as trustees. This means you can reap the estate planning benefits, including the ability to leave income to dependent and child beneficiaries.

3. Hello low tax rate!

Did you know SMSFs only incur a maximum tax rate of 15 per cent? And that can be reduced by offsetting other tax credits.  

Now, before you get excited, SMSFs do have some pitfalls. They require a lot of hard work and if you don’t comply, you’ll be in for a nasty penalty. For more in-depth do’s and don’ts, come see me in Sydney on 5 August. I’ll be the one with the microphone.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

Published on: Thursday, July 28, 2011

The Switzer Super Report is a newsletter and website for self managed super funds. With exclusive commentary from Peter Switzer, Roger Montgomery, Paul Rickard and Charlie Aitken the Switzer Super Report will help you maximise your after tax investment returns and grow your DIY Super. Click here for a free trial or subscribe today.

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