Is a Self Managed Superannuation Fund right for me?

SMSFs an attractive option: top 6 benefits of Self Managed Super Funds

About one third or $420 billion of superannuation savings in Australia is now held in Self Managed Super Funds, or SMSFs, says Christine Hallowes from EFS, part of the Count Wealth Accountants network.
Also known as a ‘Do it Yourself’ or ‘DIY Fund,’ a SMSF is a super fund you set up and manage yourself, in contrast to employer and retail super funds which are managed by professional trustees and managers. “A SMSF member becomes their own fund’s trustee and can seek advice from experts like accountants, financial planners and lawyers when they need it,” says Christine.

A key benefit for many is greater investment choice, which can be tailored to specific retirement goals.

As well as the conventional asset classes of cash, fixed interest and managed funds, SMSFs also have access to investments such as residential and commercial property and direct shares. For example, business owners may seek to make their business premises an asset of their SMSF.”

Christine also advises that a SMSF can be an excellent vehicle for holding death and disability insurance, giving you and your family peace of mind. “Premiums for death and disability insurance are tax deductible in the SMSF (unlike in situations where death and disability insurance are held outside superannuation), and may be funded from your super contributions or fund account balance.”

Christine notes that, subject to certain rules, a SMSF can also borrow to invest in assets such as residential or commercial property.  “These assets are then held in the tax effective superannuation environment, which can result in a significant boost to your retirement savings.”

Once you reach age 55, you can start a pension in your SMSF. Earnings and capital gains from the investment assets that support a pension are not subject to tax in the fund. According to Christine, “by timing asset sales in a SMSF to take advantage of these rules, substantial tax savings can be achieved. That said, it is essential that your fund be reviewed to work out whether this strategy will be effective – which is where a good financial adviser comes in.”

Christine points out that self managed super funds may allow added flexibility in determining how your estate will be paid after your death. “For Australians, superannuation is often the largest asset after the family home so it may be a substantial part of your estate. Therefore, it’s important to ensure that your superannuation funds are paid to your dependants in the most tax effective way.”  Christine advises that, when determining the best way to pay your superannuation benefits on death you should consider factors such as tax, family circumstances and other estate assets.

Finally, Christine notes that a pension drawn from a SMSF may allow you to draw tax efficient pension payments to supplement your income as you approach retirement. “You could “salary sacrifice” your employment or business income into the SMSF, while at the same time receiving pension payments. Salary sacrifice contributions are taxed at 15% rather than your marginal tax rate. Pension payments are tax free over age 60 and otherwise are taxed advantageously.”  As mentioned, assets that support a pension are subject to zero tax in the fund.

Christine Hallowes is an Authorised Representative of Count Financial Limited, an Australian Financial Services Licence Holder (No. 227232) and Australia’s largest independently owned network of financial planning accountants and advisers.
The advice provided is general advice only as, in preparing it, we did not take into account your investment objectives, financial situation or particular needs.  Before making an investment decision on the basis of this advice, you should consider how appropriate the advice is to your particular investment needs, objectives and financial circumstances.

Please visit for further information on how a SMSF could be right for you.


Published by James Solomons

FCA, GAICD. Innovative Business Leader. Global CFO @Xref (ASX:XF1). Director at @business_Depot (formerly Aptus Accounting & Advisory @AptusAA). Former Head of Accounting @Xero Australia. Advocate, Entrepreneur & Educator #Family #Football #Fastcars!

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