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08 8177 5799

Fax
08 8223 3593

What's new?

Salary Sacrifice to stop income advantages

The Federal Government has changed several income thresholds to include salary sacrificed benefits. This will reduce several income entitlements of taxpayers where possible benefits can be claimed through the family tax system, plus reduce possible tax deductions including superannuation that can be claimed.

Further, we urge you to read our "Federal Budget" newsletter that was sent to you recently to see how you may be affected by the budget changes.

Alternatively, please talk to us to learn more.

Are Self Managed Super Funds really that super?

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According to the Australian Tax Office, as at June 2008 there were over 387,000 SMSFs operating within Australia, with a total membership base of almost 750,000. That’s a lot of Australians who choose to go their own way in providing for their retirement!

But how do you know if an SMSF is this the right option for you?

Below are some key advantages that can make an SMSF a super choice as part of your overall retirement planning strategy:

Control: For people who like to retain control over their investment strategy and direction, SMSFs are often an attractive structure in which to hold their retirement savings.
Taxation: SMSFs can allow trustees to take a more tailored approach to managing taxation, especially to minimise overall tax and more appropriately manage capital gains tax.
Investment choice: SMSF trustees can choose from a much wider range of investments than typically offered through a superannuation fund that is managed by a fund manager.
Cost savings: An SMSF fee structure may deliver substantial savings when compared with retail superannuation options. Also, SMSFs often have opportunities to invest in wholesale investments at rates that are considerably cheaper than their retail counterparts.
Flexibility: An SMSF trustee can consider alterations to the fund's investment strategy that will help to meet the personal circumstances of fund members or which reflect changing economic conditions.
Ability to accept different types of contributions: You can use an SMSF whether you are self-employed, making personal (after-tax) contributions or looking for the appropriate vehicle for your employer contributions.
Direct property: SMSFs can invest in ‘bricks and mortar’ or direct property. Retail funds typically cannot, except from within a specified property trust.

There are many compelling reasons to invest in an SMSF. But there are also some less-than-super aspects to consider:

Investment assets not appropriate to meet member objectives: While SMSFs are allowed to invest in a wide variety of investments, they must be entered into with a view to generate an appropriate level of income and growth.
Investments not diversified: Holding too much in one or two main asset classes may reduce the ability of the fund to meet the goals identified in its investment strategy.
Inadequate investment selection: Two key issues are poor investment selection and a mismatch between the risk and return generated by an investment.
It’s not your money….for now: Current superannuation law does not allow anyone under retirement age to access their superannuation as a lump sum, except in special circumstances such as severe financial hardship.

If you are disciplined about investing, and confident that you can plan for your funds to be used in retirement, and not before, an SMSF may be a suitable strategy. Please contact this office for more information.

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The contents of this Bulletin are general in nature. We therefore accept no responsibility to persons acting on the information herein without first consulting us.