Retirement planning and SMSFs


retirement-plan-with-pen-and-glassesSMSFs are a popular way to save for retirement

The amount of savings you accumulate stipulates the quality of your lifestyle in retirement, so being able to control your superannuation investments and align those investments with your retirement goals is an advisable way to go. That’s why a self-managed super fund (SMSF) is an attractive choice when planning your retirement as it gives you control, transparency and flexibility.

Match your investments to your retirement goals

Although an SMSF is governed by the same rules as other super funds, the investment options are vastly superior which helps to better align your investments and your retirement goals. Whatever your lifestyle and goals are an SMSF’s flexible structure allows you to tailor your investments and tax to suit them.

Retirement savings tax strategies

There are many tax strategies that can be used seamlessly implemented within an SMSF structure to maximise your savings before retirement. including:

  • salary sacrifice
  • transition to retirement pension
  • withdraw and re-contribution
  • spousal splitting
  • using a number of accumulation and pension accounts at the same time
  • contribution reserves.

The strategies you use may be restricted by to your age, retirement goals, assets, and income. For example, if you purchase an asset and sell it before you retire which is the accumulation phase you pay capital gains tax; on the other hand, if you sell the same asset in retirement which is pension phase you are exempt from paying tax.

Setup a super fund suited to you

In most large super funds, the trustees cannot take into account the personal circumstances of the members, meaning they can’t always buy and sell assets to suit each member. Other funds allow for greater flexibility with investments but can force investors to pay capital gains when they move from the accumulation phase to retirement. Unitised funds deduct an allowance for capital gains tax daily within their unit prices indirectly.

You have absolute control and can time and make decisions to buy and sell to suit your personal retirement goals when using an SMSF. But, it is imperative you are aware of the responsibilities involved with running an SMSF and to avoid tax penalties maintain the compliant fund.