Australian Superannuation is the main stay of the Australian retirement system. Self Managed Super Funds (SMSF) within that are the main stay of how people in Australia take control of their own super. The other alternative is the Small APRA fund, the SMSF is administered by the Australian Tax Office where as the SAF is administered by APRA.
In Australia SMSF represent about 20% of the Fund and about 80% of the investments. This is because of the large size of most SMSFs.
Although the wisdom of most financial advisors, who themselves often do not have these funds, is that a fund should have over $200k in it to start the majority are started with sub $100k. These are not my figures but are that of the Australian Tax Office.
The majority of SMSFs are started with about $60,000 and with the prime intent of consolidating a couples Super savings and using the fund to buy the property under their business. Which is a great use for a SMSF.
The SMSF allows the active investor who is educated in Financial and Taxation systems to really maximise their wealth at the same time as minimising taxation, using the great tax benefits that the Australian Government gives to the SMSF market.
The basis of this type of investment is to have the right type of retirement plan, the right type of investment plan and the best type of investment advice you can have.
Often people using a SMSF are using it in conjunction with salary sacrificing in their job, super contributions if they own their own company, with partner contributions, investment in shares that pay franked dividends, long term joint ventures in plantations, property, agriculture and gold on top of the normal investment types.
All this is perfectly legal and done properly can reduce a high income earners or self employed persons complete tax bill down to around 7-10% or about what Kerry Packer used to pay.
SMSF are also used to maintain the main bread winners life assurance inside a very tax effective system on death. The SMSF set up correctly can be used to pay out payments to family members in sums and ways that reduce to sometimes zero the tax burden that can fall on families due to death. Once again you need to pay for good advice and check out everything to ensure that your will and SMSF are set up correctly.
For a free report on the subject and to get a professional Financial Advisor to call you can fill out the form below. Please note that you should seek the advice of both a Financial Advisor and Tax Advisor prior to setting up any type of SMSF.
