Retirement
Why are people making the move to SMSFs?
With the revelation that SMSF numbers have tripled over the last 20 years and the assets held within them now represent one-third of Australia’s total superannuation pool, nestegg asked: Why the popularity boom?
Why are people making the move to SMSFs?
With the revelation that SMSF numbers have tripled over the last 20 years and the assets held within them now represent one-third of Australia’s total superannuation pool, nestegg asked: Why the popularity boom?
In conversation with nestegg, SMSF adviser and director of Cooper Partners Jemma Sanderson said SMSFs are a great solution for those people wanting to take control of their retirement savings and build their wealth, particularly where they want to take control of the investment side of that.
“Investment flexibility, control and estate planning benefits” are some of the benefits Ms Sanderson flagged as being unique to an SMSF.
In her own experience in dealing with clients, Ms Sanderson said people consider that they can generate a better rate of return themselves from managing the investments, or where they want to take advantage of an investment that is not readily offered through their current superannuation account.
While there are restrictions in the superannuation law regarding investments by superannuation funds, which the adviser acknowledged as being “prohibitive”, Ms Sanderson went on to advise that “once you are aware of what those restrictions are, there are a far greater level of investments available for an SMSF”.
“Many of our clients like the ability to invest in unlisted funds (particularly property), which they can’t get access to in their non-SMSF superannuation accounts.”
“Further, people can put in place within their SMSF [certain] life insurance policies that take into consideration their overall circumstances and position.”
Noting too that they “can also be more cost-effective than other superannuation funds”, Ms Sanderson emphasised the ability of an SMSF to enable up to four members of the same family to “aggregate their superannuation benefits for investment purposes, which can be attractive”.
For the director, SMSFs are “such great structures for people to take control of their wealth accumulation and retirement”.
“However, they may not be right for everyone, so it is important to consider why you might want to set one up, and be aware of the insurance and ongoing requirements,” she concluded.
The ATO revealed in October that SMSF numbers had grown from 197,000 in October 1999 to 600,000 by June 2019.
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