HOW LONG WILL YOU
NEED TO WORK TO REACH
YOUR RETIREMENT DREAM?
A Self-Managed Super Fund (SMSF) could be the key to having the retirement you have always dreamed about.
10-Point SMSF Guide
Superannuation is something most of us try our best to avoid thinking about. But by being up to speed with the different types of Superannuation options available to you, you are setting yourself up for a better future.
Why Would I Choose A SMSF?
- Control your investments, control your taxation
- Have transparency on fees being charged to you
- Taxation saving strategies with contributions
- Taxation saving strategies with pensions
- Minimise your transaction costs (you don’t have to sell down your investments when moving to retirement within a SMSF so there is no capital gains trigger)
- Borrowing in your SMSF to purchase a business premise
- Using equity in the fund to borrow and buy a residential property
- Achieve better long-term growth than your current fund by controlling your investments
- Large tax savings for business owners
- Transferring your wealth effectively to the next generation via proper estate planning
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How much do I need in superannuation to start a SMSF?
The cost of running a self managed superannuation fund is on par with retail funds when your combined balance (you and your spouse) reaches between $200,000. This is the break even point on administration and other hidden fees you already pay.
What does a SMSF cost me?
To establish a SMSF with a corporate trustee you will need to pay for a trust deed and a new small proprietary company.
The cost of this structure is $1,800 to $2,000 plus GST which includes the documents above, our time establishing it for you correctly and meetings to take you through the process correctly and advising on how to rollover your old super into the SMSF. You will receive a hard copy of the documentation and can have a soft copy of the SMSF trust deed.
The annual costs of a SMSF are usually around $2,000 for accounting and taxation, $259 for the ATO SMSF Levy and $48 for the ASIC special purpose annual review fee.
Optimise Your Retirement Plan With Our Free SMSF Guide
Why would I use an accounting firm instead of a low cost provider?Control of Investments
By using a low cost provider you are limiting what products you can invest in and which brokers you may use. One of the biggest reasons people choose to move to a SMSF structure is to control the growth and returns on their retirement money.
By going with a low cost provider your investments are reduced to those investments on the provider’s list of acceptable options, which usually provide the low cost provider with a commission, which is how they can lower their accounting and low cost audit fees. Is it fair that your term deposit banking is fixed with a 1% lower interest rate, so that the administrator can take their 0.2%+ clip of your bank balance from the provider as a kickback? If you move to a SMSF for control and transparency of fees, then moving to a low cost provider is probably not for you. Search for it and you will find a wave of disallowed investments. Further searches might find ASIC infringement notices for breaches of the ASIC Act in regards to the supply of financial services.
Why would I use an accounting firm instead of a low cost provider?Taxation Control
By timing pensions and structuring investment strategies to utilise the concessional tax treatment for the funds, tax can be reduced and for most retirement phase client’s refunds can be claimed from ATO for any excess credits.
There is also the flexibility when it comes to dealing with taxable liabilities for your fund, as this fund only has one single tax return although there may be up to four different members for the fund and each can have numerous pension accounts.
There are also contribution and reserving strategies an accountant can advise you on, instead of paying 47% excess contributions tax by making an error that a low cost providing robot will not think about.
Why would I use an accounting firm instead of a low cost provider?Expert Advice and Service
We set up our trust deeds and corporate trustee entities correctly from the beginning. We have our clients meet with us and walk them through the documentation. We don’t email you a load of confusing PDF documents without advising on what they are, what they mean and where/when to sign them all.
We review our trust deeds regularly to make sure they are up to date for any changes in the law.
We help you with an investment strategy so that you can be confident you are choosing investments that match your criteria.
We make sure your insurance policy adequately covers your needs and is the best value for your premiums paid.
Low cost providers give you no advice. Low cost providers make you do all the work. Low cost providers offer a very low level of service annually.
Whereas we can provide you with high level advice, excellent service and regularly monthly or quarterly reporting with access to our software to view how your fund is tracking. Without up to date information, how can you make timely investment decisions that will affect your future?
Why would I use an accounting firm instead of a low cost provider?Fee Transparency - Costs of Running a SMSF not advertised by Low Cost Providers:
If they were truly transparent, they should probably be advising you on the annual ASIC fees for trustee companies, as well as the ATO’s SMSF levy of $259 per annum.
The annual fixed fee for these operators is increasing at $100 per annum, which is 12.5% on an $800 starting fee.
If you pay peanuts, you usually attract monkeys.
Can I Still Use a SMSF Adviser?
Yes, many SMSF members choose to enlist some help from professional financial planners. Some sound advice can go a long way be it a financial planner, a proper investment strategy or your choice of broker.
You still make the choice of investments, you are still in control, you are just getting a bit of help.