What are you doing with your SMSF ?

So what is your opinion on other tax advantaged schemes eg insurance bonds where similarly to super you forego the returns for and pull out tax free after 10 years?

If I have means why should I be forced to eek out a retirement?

 

There are reportedly a few SMSFs with $100mil in them earning tax free income. I think there should be restrictions on this end, but the smaller end still encouraged into super.

 

We're looking to use our super funds to invest into property development funds. Its a great way to keep skin in the game in between the cycles of buying IPs, there's normally a 2-3 year completion cycle on these development funds, in which case we're hoping to be ready to again for next IP purchase. A nice passive investment.

 

Yes, same one. We have been in a little over 12 months now. The phone back thing can be a little unnerving for a lot of people, but in our time, we've only had one instance where we couldn't sort out something via email and we needed them to call us. This is across three loans/purchases and numerous share transactions and other stuff.

There are limitations on how you can trade, lenders you can use and how you can do a few things, but it has worked well for us so far.

 

I think that there will always have to be some differential between taxation to "inside super" versus "outside super". Otherwise it is tricky to convince the nation of super and thus tricky to get voted back into parliament.

With that said, I think that a tax in pension phase is almost guaranteed. Tax on withdrawal, same same. An increase in preservation age, yes why note, they do it every couple of years, might as well carry on the tradition. In other words, taxes that apply particular in the contributions tax will always have to be lower. What they do in pension age... who knows. It's so far off that a lot of people ignore it. It's the here and now most folks probably care about.

As I mentioned I think there will always have to be a visible "benefit" of super that the common man can understand that thus entices him/her to vote the government into power, or back into power as the case may be.

Indeed. Make hay while the sun shines.

 

Thanks I've only started looking at smsf. I thought since it might be a good time to start Since I don't have a lot in super and it is more than 30+ years before I can gain access to it.

 

Mine was eSuperfund. They were ok but I had issues closing the fund. Their business process for closing a super fund is incorrect.

 

That's great progress ! If they are paid off do you think the rent will be sufficient for you to live off ?

 

Yes , but we're also working on a similar income stream out side of super .

So should be ok . I'm also in a job ( which I enjoy most of the time ) where I can easily work part time .

Cliff

 

Hi Aaron, I'm really interested to hear about what you found difficult and timeconsuming. I'm watching people run tidy little SMSFs with appropriate support from their accountants so I'm wondering what was different in your situation and if it could have been overcome. Would love if you could post your experience.

 

We just record the ongoing accounts and let the accountant do the returns and arrange the audit .

From our perspective , no more complicated than normal IP's .

Cliff

 

Fees.
Fees.
Proof.
Proof.
Fees.
Fees.
Bookkeeping.
Fees.
Proof.
Bookkeeping.
Fees.
Fees.
Bookkeeping.
Fees.
Proof.
Fees.

 

the cost of the fees plus compliance was offsetting the tax benefit, so I just trade inside a trust.

i may look to set up an SMSF again with my folks, but seriously - it's just NOT worth the effort otherwise.

 

@Aaron Sice oh wow sorry to hear it was not a good experience for you!

I keep two basic spreadsheets to help explain to the accountant what each bank transaction was for. I scan bills as they come in, store them in sensible folder names for the accountant, and give it to him as an electronic copy at tax year end. I find it really easy. As for fees - I pay less to maintain my SMSF than i was paying in admin fees in a regular retail super fund so I'm happy.

Out of interest - how much were the fees were you paying, and what sort of proof trouble were you having?

 

compliance costs were nuts - over $2500pa.

plus govt charges and recording every transaction.

too busy earning money and living life.

 

$2500 PA wow that's not much. Mine were nearly 3 times that much last year although the 2 x Funds are of a reasonable size.

To me managing your Super is making money and I love it.

Have a number of Vendor Finance property loans, some short term lending, 6 properties and a good mix of UK & ASX shares and of course good old cash.

Just gone contract on my first development inside Super.

To me it is what you make of it. Doesn't take long to manage each week.

Cheers


Richard

 

@Aaron Sice

Wow, your providers were charging you a lot.

I pay $1100 for the tax return and audit each financial year. Certainly not $2500.

The government charges you refer to - do you mean the ASIC fees for the PTY LTDs in the super fund?

For recording every transaction, the bank account does that for you really. I copy and paste transaction details from internet banking screens into Excel and add a column to explain what the transaction was for. Easy peasy.

 

All that I was doing as well - one statement, all recorded.

I was HF trading and buying and selling bullion.

 

Not bad considering that an smsf can only have 4 members.

 

@Aaron Sice alrighty, well if you decide to return to the SMSF space, be sure to check into the forums and get some recommendations from folks about reasonably-priced SMSF accountants