Self-managed super funds (SMSF or as they are commonly called) continue to gain in popularity and are now the largest segment of the industry in terms of dollars invested for retirement.
So why are people flocking to SMSF? Research suggests that control is the main reason for Australia to make this choice for their retirement savings. To get more details about SMSF tax return you may check it here.
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But with this control, what are people doing investment-wise? As a financial planning practice with many SMSF clients, this is what we see in the direction of financial services:
• Direct action rather than managed funds – There are significant savings to be had if you are an investor buy and hold, through owning shares directly rather than through a fund manager. However, more importantly, after-tax returns can be better, as less trading means less tax capital gains.
• The loan and buying a property – With a word about changing the rules on borrowing finally out, we see many people SMSF decide to have an investment property as part of their savings -retirement. Now that funds can borrow, property investment is much more accessible.
• Business owners buying their business premises through their super – This strategy has been around for many years and is even more popular now that SMSF can borrow. Your super fund buys the office, warehouse, store, or whatever applies to your business, then your business leases the building from your super fund.