What is a
Self Managed Super Fund?

What is a Self Managed Super Fund?

A Self Managed Super Fund is becoming increasingly popular. The reason why is due to the flexibility and control they give you over your retirement savings.

The ability to use your super fund to invest in property, both residential rental properties and commercial property is an advantage for people who prefer bricks and mortar investment to investing in shares.

Super Fund lending from banks have made property in the superannuation environment so much more achievable than ever before. If you have 30% of the value of the property you are looking to purchase available in your super fund the bank will consider lending you the rest.

They will look at the money you can reasonably expect the property to generate for you and your ability to make superannuation contributions into your fund. This will help the bank feel comfortable about your ability to meet the repayments.

But if you like to think outside the square, the self managed superannuation environment can provide you with some fantastic investment options. This can include the ability to use unit trusts and companies to invest in start-up businesses and other existing business opportunities you may not have had the resources to invest in otherwise.

For business opportunities you are considering, you should only own a maximum of 49% of the business. If you are going to be a Director of this business opportunity there must be at least one other Director who is not related to you. This is to make sure you keep within the superannuation laws. By having unrelated people involved in the business, the ATO feels more comfortable that your business venture is really with the intention for making money and profit.

This is important because the main objective of a Self Managed Super Fund is to provide you with money to fund you in retirement.

A Self Managed Super Fund requires some time and commitment on your behalf but the benefit is that you can create your own investment strategy using investment types that you feel comfortable with. You can invest in business opportunities you think are going to make money if you are more entrepreneurial than mainstream, or you can invest in property if that is more your style.

While accountants are not allowed to tell you what to do with your superannuation money we can give you all the information you need so that you can make your own decision.

To make the best use of your accountant make sure you have the following information:

  • What is it you want to invest in
  • How much money you have to invest inside of super
  • What money you have available outside of super, now and on an ongoing basis

With the above information your accountant can help you calculate if you have enough money available for a proposed investment, and using their experience can help you identify any issues you may not have thought of.

This will let you make a fully informed decision about your investment and make the most of your superannuation.

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