What Are The Benefits Of A Self-Managed Super Fund For Small Business Owners

 

If you are a small business owner, you may have considered establishing a self-managed super fund (SMSF). An SMSF is a unique retirement savings vehicle that gives investors the freedom to manage their own investments and provides access to tax incentives and other benefits that other superannuation funds offer.

Here’s a closer look at some of the key benefits of having an SMSF:

Tax Savings

One of the main advantages of establishing an SMSF is its tax savings opportunities. Contributions to a person’s SMSF are taxed at 15%, which is far lower than the marginal income tax rate most people pay on wages, salaries, or business profits. Plus, if members decide to withdraw from their fund before they reach pension age – usually 55 for those born after July 1, 1961 – contributions may be subject to tax instead of regular income.

Reduced Fees

Because there are no external management fees associated with a self-managed super fund, it can potentially save you lots of money in fees compared to using conventional funds or trusteeships. Furthermore, as long as members adhere to taxation requirements and regulations, trustees may even qualify for reduced lodgement fees with the Australian Taxation Office (ATO).

Asset Control

Unlike conventional funds designed by investment managers who buy and sell stocks and shares according to performance data, an SMSF gives trustees full control over the group's holdings. This means that members have much greater input regarding which assets will make up their private retirement vehicles and can direct their investments towards particular types of options depending on personal preferences or strategies.

Investment Flexibility And Variety

Most managed funds are limited when it comes to investing locally due to restrictions placed on investment ideas by external managers; but with an SMSF there near-unlimited access local opportunities in terms of investment options. Self-managed funds can accommodate almost any type of asset imaginable - including property investments not available through traditional sources - ranging from stocks and shares, bonds, cash products like term deposits or foreign currency options.

Estate Planning Benefits

Finally, just like with traditional forms of superannuation or retirement planning options available through licensed professionals or financial consultants; having an SMSF also affords owners access exclusive estate planning benefits only available through this type vehicle structure such as allowing members name beneficiaries upon death and outlining plans for distribution upon reaching pensionable age.