Don't throw the SMSF out with the bathwater

If you believed the press DIY superannuation is all but finished.  Don’t believe the press.

Sure, we’ve seen the introduction of the “transfer balance account” (which seeks to put a cap on tax-free pension entitlements from super) and there are plans for some other changes like to the tax treatment of franking credits or the prohibition on borrowing (both of which may or may not ever see the light of day given that Labor need to not only win the election but convince an as-yet unknown Senate crossbench of the wisdom of those changes).

But even with these limiters superannuation still remains a very efficient and attractive structure for your retirement planning, and particularly self managed superannuation.

The changes might make superannuation a little less attractive – but “a little less” is not zero.  Super enjoys material tax concessions and a forced saving scheme that could easily become a person’s largest asset.

Self managed super offers some major benefits:

• control  - over what to invest in, over what costs and fees to pay, over what insurance to have, over whether or not to leverage and of course over when to take your benefits
• flexibility in all these decisions
• cost sharing via aggregation of a family’s various super investments in one SMSF
• the ability to invest in direct property
• gearing to majorly leverage investment return
• the ability to convert the family’s business premises into a retirement savings asset
• much greater flexibility in member estate planning
• protection from over-charging by unscrupulous public offer funds.

Don’t let the negative comments about super, and self managed super in particular, dissuade you from investigating whether a DIY fund is right for you.

No comment about self managed super is complete without reference to regulation by the ATO and ASIC.  With the tax concessions the government offers comes the responsibility of operating the fund properly so the ATO will want to know that you have a basic understanding of your obligations and ASIC will need assurance that you understand the trade-off between the higher costs of operating an SMSF and the potential for higher returns.  Information about what you need to do is widely available so make sure you understand the basics and get good support from your accountant, financial planner and superannuation lawyer.  

For more information about our special legal review and bulk update pricing available please contact our Help Desk on (02) 8296 6266 or email info@supercentral.com.au.