Let’s discuss the advantages and disadvantages of having SMSF
Last time, we discussed the most common questions about Self Managed Super Funds (SMSF). We gave you a guide as to what an SMSF is and how they work. Now, we will discuss it a little further by giving you the advantages and disadvantages of having SMSF.
Here are some of the pros of using an SMSF for your superannuation funds:
1. You have control over how and where your money is invested.
2. There can be fee savings if you have more than $200,000 invested. You can combined your and your spouse’s super balance to create an effective cost saving.
3. SMSFs offer the potential to use tax saving strategies
4. SMSFs can purchase your business real property.
5. SMSFs can give you certainty for your estate planning.
There are also disadvantages that you should also take into consideration, here are some of them:
1. You have to make sure your fund complies with the regulations (although your accountant will advise and guide you on this)
2. You have to administer the fund (again, your accountant will handle most of this)
3. As a trustee of the fund, you are open to personal litigation if the fund is not run properly.
4. You are responsible for the fund’s investment strategy (although this is established with you financial planner)
We hope these helped you further understand SMSF. If you need further assistance, you can also contact us at (03) 9810 3666. We are happy to discuss your future with you.