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.
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