An SMSF can be beneficial for several reasons, including unique features that set it apart from other superannuation structures:
- Control: An SMSF provides you with greater control over your retirement savings, allowing you to make investment decisions that align with your financial goals and risk tolerance.
- Tailored Investments: You have the flexibility to invest in a wide range of assets, including property, shares, cash, and other investments, enabling you to diversify your portfolio.
- Cost Efficiency: For some individuals, an SMSF can be more cost-effective than retail superannuation funds, especially when the fund balance grows.
- Estate Planning: SMSFs offer estate planning options, including the ability to nominate beneficiaries and create a comprehensive strategy for the distribution of assets upon your passing.
- Tax Benefits: Depending on your circumstances, an SMSF can provide tax advantages, including potentially lower tax rates on investment income and capital gains.
- Asset Protection: In certain situations, SMSFs can offer additional asset protection benefits, although these should not be the primary reason for establishing one.
- Property Investment: An important distinction of SMSFs is the ability to use Limited Recourse Borrowing Arrangements (LRBA) to purchase property. This means an SMSF can borrow money to buy property, making it the only superannuation structure where this option is available. LRBA allows you to leverage your superannuation to invest in property, potentially accelerating wealth growth within your fund.
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