How much do I need in Super to start my own SMSF?

How much do I need to set up my own SMSF

and what do I need to know?


 

The Royal Commission has ignited a lot of talk in the media surrounding Self Managed Super Funds raising more questions than answers

We are not financial planners nor sharing financial planning advice merely quoting sources and or using basic logic in what we are sharing with you

 

What we do know is that industry funds (generalised) tend to perform at 5% to 7% per annum over the long term + fees, where in your own SMSF you have a wide choice of investment vehicle and can therefore be more hands on with our own Super destiny

 

NB : It is important to find out what all the fees/costs are being charged to you now wherever your super is being invested. Allows you to compare to what you could be doing and the fees there

 

There are investment platforms out there where there are no minimums, but before you set up your own SMSF you need to realise that there are some upfront costs for setting up the SMSF and also a SMSF requires annual audits which also cost money

 

What this means to you and your super is that once you understand the upfront and the ongoing then work out the minimum you would require in super that not only covers your annual audit / accounting fees but also give you returns in excess of average super funds performance

 

Set up fees could range between $700 and $2,500 depending on complexity and purpose and annual costs for Admin & Audit from around $665 to $1700 for basic SMSF’s and higher for more complex Self-managed funds and some other minor fees

Meaning that the lower the balance the higher the cost as a ratio, thus requiring investments to cover costs and return an ROI you are comfortable with

 

You will have heard a figure of $200k required by ASIC  as a minimum to have your own SMSF, this figure used to be a recommendation and not a legal requirement

If you have an amount you are comfortable with knowing you could achieve the financial return on investment you want then having control and choice over your retirement wealth is imperative to enhancing your retirement goals. This is why there as so many SMSF’s registered with Billions of Dollars under Self Manged Super Funds management

 

You may encounter negativity from your financial advisor and the media (it’s their job) however an advisor is obligated to put your interests ahead of theirs or the conglomerate they represent, your own research and due diligence will allow you to come to an informed decision

 

Once again : the amount you have in super, the rate of return you are getting versus what your research indicates you could get, less upfront and ongoing fees should help you determine what is the correct strategy and investment vehicle for you and your family

 

Other aspects for consideration could include : how best to maximise your wealth in retirement planning, what flexibility do you have and want, the varying investment vehicles available to you giving you a wide array of choice and thus control when comparing where the funds are invested now and what choice, control, flexibility, return on investment and ongoing fees  

If you are unable to do the comparisons and calculations speak to your financial advisor and or your accountant or ask us for a referral to a reputable professional who

can assist you so that you can make your very own informed decision of how you want your monies in Super to be working for you

 

Whilst Planning

Did you know that a major advantage of investing in a property within a SMSF is that you are able to Leverage?

 

What this means to you and other SMSF members is that you can invest only 20% (or more) yet achieve Capital Growth on 100% of the property value + your tenant will help you build wealth by paying rent and depreciation can be deducted against Super contributions further lowering the tax on contributions

 

The numbers which are underpinning an investment in property could return you around 10% to 17% per annum – *depending on the type of dwelling, rent, interest rates, deposit, capital growth etc, we can help you estimate the cash flow

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SMSF Investment Property

Self Managed Super Funds and Investment Property

SMSF Property Investment

More people want to take control of their own Super destiny and wherever they turn, they are reading about “Leveraging and Investing in a Property within a SMSF.”

Compared to other asset classes which generally cannot be leveraged, it’s not hard to see why many investors are now ‘investigating and talking to a financial planner or you about buying property in their Super Fund.’  And we have not even mentioned the incredible Tax Advantages …

Over 2 years ago we predicted that Self Managed Superannuation Funds (SMSF’s) would become a big driver of the Australian property market.

Since then, other commentators and the finance industry as a whole have woken up to the trend, and have begun to realise the massive influence SMSF’s will have in the property market over the coming years.

Property investing under Self Managed Super Funds has entered the mainstream. In the last 12 months it seems like everywhere you look there are ads promoting property investment through SMSF’s – even on TV!

“Why invest in Property in a SMSF and what is so appealing to put a property into one’s Super?“

Leverage: the ability to BORROW money to get the bank and the tenant to help pay off a large slice of Retirement Savings + Tax Benefits !

 

SMSF lending is ‘limited recourse’… In other words, a borrower’s ability to qualify for a loan under an SMSF has very little to do with what they personally can (or can’t) borrow outside the SMSF. It means that even if an investor is personally maxed out on their borrowings outside their SMSF, they may still be able to borrow money for investing within their SMSF.

Most people still don’t realise just how big SMSF’s are becoming with more and more adverts and thus enquiry coming to the fore, values of property could rise according to demand!

Over the last 5 years, the rate of growth in SMSF’s has massively outpaced growth in managed funds. There are now close to half a million registered SMSF’s in Australia
SMSF owned Assets represent almost a third of all money in superannuation within Australia. Property is beginning to make up a large proportion of assets in a SMSF for obvious reasons! The property market is once again on the rise, population in Australia continues to grow, rental yields continue to increase … why wouldn’t you own a safe portfolio in bricks and mortar being mostly paid for by your tenant and the tax man with help from your bank!

Around $15.5 billion of SMSF assets are already invested in residential property, making up around only 3.5% of the estimated $439 billion in SMSF’s – the potential for the Property Market is Immense.

 

The opportunity to own a Positively Geared Investment Property in one’s SMSF is here, meaning after your initial deposit, whether you continue to contribute towards your SMSF or not, the income is higher than the outgoings. Another reason to invest in bricks and mortar.

 Are you aware that potentially it is not all coming up roses investing through other channels and you should be talking with property professionals who have your interest at heart. Not all property makes for a prudent investment!

 This is where we come in. By now you will have an understanding that we always put your clients first and that we have access to property Australia Wide; giving you choice and enough supporting information based on our own due diligence PLUS encourage you to undertake the same amount of their own due diligence prior to making an Informed Decision.

 Investment Property | SMSF | Leverage using the banks money and your tenants rent to contribute towards your retirement planning goals

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