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December 11, 2021

Are Self-managed Super Funds Good for You?

You may think that managing your super account is a good idea. Even though it comes with a lot of benefits, it is crucial to consider the downsides.

Furthermore, numerous rules and regulations govern the Self Managed Super Funds (SMSF), which places a significant responsibility on you. So, is SMSF right for you?

The benefits of SMSF depend on your abilities and circumstances. Read on to understand the various advantages and disadvantages that come with maintaining an SMSF before you decide.

What Are the Advantages of an SMSF?

Traditionally, employers send a percentage of your paycheck to the nominated superannuation account while they regulate it. In contrast, an SMSF allows you to manage your retirement savings.

Primarily, you are in complete control over your superannuation. In addition to control, there are many other benefits too. You can find them below.

Tax Benefits

SMSF income is taxed at a lower rate of 15%. When you compare it with the marginal tax rate for any other income you earn, this number is significantly less. Usually, the tax ranges from 19% to 45%, depending on the size of the income.

Quick Investment Decisions

One of the most important aspects of having control over your account is it gives you the freedom to act quickly. With an SMSF, you can grab on to investment opportunities before the market conditions change.

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Purchase Residential Properties

Using your SMSF, you can buy an investment property and earn a passive income from rental payments. Plus, you can enjoy the capital value of the property.

You can have complete control over the property. However, you can not rent to a direct family member.

Asset Protection

SMSF also provides a helpful way to protect your assets against bankruptcy or other claims. These funds are not considered property under the Bankruptcy Act.

Estate Planning

SMSF funds provide an excellent opportunity for estate planning. It even offers more flexibility than public funds when it comes to a member’s death.

For instance, as an SMSF member, you can arrange for the following:

  • Distributing funds to the future generations
  • Pay the dependant death benefits as a pension instead of paying at once (allows for the SMSF to continue operating)
  • Transfer shares, property, and other non-cash assets to beneficiaries

What Are the Drawbacks of Self Managed Super Funds?

SMSFs come with several risks as well. Therefore, it is vital to be aware of them before making any decision. Once you know what these risks are, you can find ways to avoid them.


All investments come with a certain degree of risk. SMSF is not an exception to these factors. Therefore, you need to be sure about your ability to manage your investment strategy on your own. If not, it is wiser to seek professional assistance.

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All SMSFs must abide by the super laws regulated by the ATO. If you breach any of these laws, you can end up with a hefty fine.

Constantly Changing Regulations

The authorities constantly change the laws regarding SMSfs. This means something that was alright a few years ago will not be alright now. Hence, you need to stay updated with the rules and regulations to avoid any fines.

Wrapping Up

Self-managed super fund members have a broader range of investment opportunities, although it comes with several risks. Besides, managing an SMSF is a huge responsibility.

Now that you have the complete picture of SMSF, you can decide whether or not to start one. If you choose to go ahead, it is advisable to get professional assistance.


“Author Name: Zoya Maryam”


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