Everyone knows that the SMSF is the most popular retirement investment in Australia. This is due to the fact that it offers extremely versatile and flexible investment options with almost no restrictions. Besides that, SMSF offers full control over fund assets and numerous investment options which is one of its greatest advantages.
However, in order to successfully run an SMSF, you need a proper superannuation investment strategy. Knowing the ins and outs of the SMSF will definitely help you create a superannuation investment strategy that will work best for you and bring you benefits and other opportunities down the road. Unlike other investment funds, this fund requires you to have a strategy by law, which should be in compliance with the ATO (Australian Taxation Office) guidelines and rules.
Simply put, the SMSF investment strategy is a detailed financial plan that focuses on the benefits of all trustees (fund members). It should be designed with the single purpose of increasing retirement benefits while protecting the interests of each member. And in order to ensure your SMSF strategy is successfull, you must meticulously forge a good SMSF strategy. There is more to it than just deciding where to invest – it requires time, knowledge, determination, risk management and patience. So, if you lack any of these factors, it’s best to hire a professional and let him do the legwork for you.
Nevertheless, if you do decide to do it on your own, here are a couple of tips that will help you run a successful SMSF:
1. Check your investment strategy and trust deed – A property investment, for example, should be stated in your SMSF investment strategy as one of your authorized investment options, else you won’t be able to proceed with it.
2. Become aware of all the rules – Strict rules apply to owning properties through an SMSF, so make sure you are familiar with all the restrictions and rules that come along with it.
3. Preparation – The main goal is to increase the value of your fund, thus, being prepared to do the right move at the right time is key in order to make a worthwhile investment.
4. Max out on tax benefits with property investments – Tax deductions, lower overall tax through negative gearing and 15% cap on the tax of your earnings combined with zero capital gains (if the property gets sold during the fund’s pension phase) sounds pretty good to me. What’s your opinion?