help making decision on SMSF vs. Super Fund

Hi guys,

Looking for an awesome person / advisor who can help me decide whether I should purchase another IP in SMSF or go with industry super fund.

Any recommendations on a person I can talk to about this would be awesome!

thanks

Rob

 

Have no recommendation. But my comment here is relevant High risk (high reward?) SMSF property wanted

 

You are in theory asking should I buy property or shares - up to you...

 

yep... and would love some guidance or someone to run the numbers and chat to about this

 

No one can predict the future so I hedge my bets on both property and shares.

I use my SMSF to hold shares and in personal name hold property due to the advantages.

This gives me diversification and control both now and when in retirement.

If you don't own any shares I would encourage you to consider shares more so but if you want to gloat to friends about how many properties you own then by all means buy more property just understand what you are doing.

 

Super for Lazy People - how to grow it if you don't want to SMSF

Fair bit is already discussed in the above threat reach out to some of guys who are contributing heavily like @The Falcon @oracle @Nodrog they know what they are doin' ...lets say they don't offer advice but I get more value from dem than financial planners....

 

Thanks heaps for the direction guys appreciate you taking the time

 

Sash beat me to it. Some great discussion on this thread. While it isn't property vs shares which you might be looking for, there are other threads about that. Talk to your accountant, and those who are doing it about pros/cons of owning SMSF. A valuable comment I heard about setting up a SMSF is that you have to think about if/how the beneficiaries will be able to manage it when you're incapacitated/gone. I like the super fund option, along with diversifying into shares with it, but there are threads about property vs shares etc etc.

 

If a member is incapacitated their attorney would step into their shoes and manage it as if they were them - appoint themselves a director etc.

If dead the SMSF may continue, but under the control of the remaining beneficiaries with your benefits paid out.

 

Yes, but they have to have knowledge how to manage a SMSF. If they have no interest in gaining that knowledge, then ??

 

SMSF can cost quite a lot to administer and require time. An industry fund has insurance attached that may prove beneficial too. Super may be more liquid than property. This is worth a read, SMSF's are not recommended for balances less than $200k:
Advice on self-managed superannuation funds: Disclosure of costs | ASIC - Australian Securities and Investments Commission

 

Wind it up.

 

Why the hell anyone would want to stuff around trying to borrow to buy property in a SMSF beats me. Leverage generally far better in own name especially with increasing restrictions with getting money into Super.

Why not use Super to diversify into other assets.

 

For many people who want more property, purchasing via a SMSF is a way to get funding for more properties when they have maxed out their personal loan capacity. Given APRA rules, I think this will become more common.
I like the simplification of the shares investing you do, but if you are young and can’t touch super for 30yrs like me, leverage with property within an SMSF makes a lot of sense to grow a capital base

 

me too a casual chat at a group meeting would be very useful no doubt

 

Loving this thread, thanks everyone for weighing in. My wife has very little interest in Finance and therefore the dead/incapacitated part would leave her having no clue what to do. So super fund would be better. Also insurances seem easier to arrange through a super func.

I keep flip flopping back and forth between one SMSF vs super fund. Will make a decision soon I reckon

 

There are a few ways people handle insurance with SMSFs.

First off relying on your industry super provided insurance may seem like the best thing to do in terms of cost effectiveness and cash flow but not necessarily. Most if not all group insurance products that are offered through super funds can be quite limiting especially for things like TPD and Income Protection.

A while ago I researched what Insurance to get and how to get it, I ended up with a provider that does insurance in a hybrid-manner, where the bulk of the premiums come out of Super(SMSFs) and the rest comes out of my pocket. There are some gotchas to this strategy but it generally costs about the same as Industry super and stays with you, wherever you move your super(including SMSFs) - you can take this policy with you and not sign-up/renew again and again and don't have to put up with industry funds changing policy terms and prices whenever they feel like it.

PS: My Life/TPD/IP/Trauma insurances are super-linked and with Zurich. For the sake of simplicity I tied the Insurance part to my industry super and transfer some money from SMSF whenever the premiums are due. Do your own DD and seek proper advice.