What Are The Advantages Of An SMSF?
An SMSF has many benefits. As a trustee, you can choose how your super savings are invested and managed. We will now discuss the benefits of setting up an SMSF and managing your superannuation.
- Your SMSF allows you to pay for your life insurance
- An SMSF can be used to pay for personal insurance. This includes:
- Life Insurance
- Permanent and Total Disability (TPD), Insurance, and
- Income protection insurance
Your current industry or retail funds may offer some insurance coverage. This is called ‘group insurance’. It isn’t tailored to your needs and can be canceled or reduced by your super fund at any time without your consent.
Personal insurance tailored to your needs is “guaranteed renewable” if you apply. An insurance policy feature called a ‘guaranteed renewal’ that requires the insurer to provide coverage for as long as the premiums have been paid.
Your industry or retail fund may provide you with group insurance coverage, but it is often insufficient in terms of both the level of coverage and the terms and conditions.
Insurance needs vary greatly. You should consider your age, family structure, and income. Cash flow requirements, debt levels, assets, liabilities, and other factors will all impact the level of coverage you choose.
Only a certified Financial Planner can provide a complete assessment of your personal insurance needs and make recommendations on the following:
What Type Of Insurance Do You Need?
- Insurance coverage levels
- The right premium structure for you
- You may be interested in adding options and add-ons to your policy
- Based on the coverage and premiums, which insurance company is the best? As with everything in life, the cheapest option may not be the best.
Transferring Your Wealth Onto The Next Generation
The superannuation system in Australia offers many useful estate planning benefits. An SMSF, however, offers more control, flexibility, and benefits to members. It can help ensure that funds from the SMSF are distributed to the right people at the right time and in the most tax-efficient manner possible.
First, Your Will Does Not Control Your Superannuation Benefits.
If you have a blended family, it may make sense to keep superannuation assets out of your Will. This is especially true if people challenge Wills that are unfairly treated. An SMSF broker allows you to design a strategy that will achieve your desired distribution of wealth with better tax outcomes. You can leave your taxable pensions to dependents, who will be able to receive them tax-free or substantially tax-free for those not in your care.
Asset protection is a crucial consideration for many people, particularly business owners. Superannuation can protect from bankruptcy and litigation. Your superannuation benefits will likely be protected against creditors in either of these situations. A business owner might be left with only their superannuation balance in the event of a failed venture. Your superannuation balance can’t be used to support a failing business because it is meant for retirement.
If asset protection is your primary goal, you might be better off purchasing investment property within an SMSF than purchasing it in your name.