Have you started thinking about increasing your old age pension? We’ve helped hundreds of Australians get rich with Self-Managed Super Funds (SMSFs).
Meet Melanie and Stewart
Melania and Stewart are in their early forties. A retirement of about 25 years. They want to maximize and accumulate their pension.
Both have industrial pension funds. Melania’s current retirement balance is $210,000 and Stewart’s is $205,000, and they both receive an annual pension of about $10,000 from their employer and require additional contributions from time to time. The couple liked the idea of investing in real estate through their Self-Managed Pension Fund (SMSF), so they decided to seek advice from Numbers Pro Tax & Accounting.
After discussing the situation and ideas with the Numbers Pro team, Melanie and Stewart were able to successfully restructure the SMSF with a strategy that would help support their retirement.
Melanie and Stewart purchased an SMSF with a company trustee to protect their assets and ensure easy compliance for years to come. When directors/members are added or removed, the legal ownership of the property will not change. There may be fewer problems with succession planning. Where you have two members and one died. Because the remaining participants can only be directors of a trusted company. ATO administrative penalties apply to company agents. No personal managers.
Trust Is Bare
They also buy a bare trust with a company trustee for a loan to buy their investment property. Without a bearer trust, the SMSF cannot borrow.
Melanie and Stewart are both principals of SMSF and the Bear Trust. This means they jointly control and take responsibility for the fund and the decision-making process underlying the investment decisions. They, as SMSF trustees, like the fact that they are quite flexible about the types of investments they can hold.
Purchase Of Property
Their SMSF takes 60% of the value of the property. The balance of the real estate purchase price is maintained by existing pension funds that trade their production funds into the Social Security Fund.
Funds remaining after renewal are invested by their stock portfolio and cash investment strategy to ensure that the SMSF adheres to the principles of diversification.
As trustees, Melanie and Stewart are responsible for making decisions, implementing and documenting decisions about investments of IMF assets, and closely monitoring the performance of those investments. This function deals with the formulation and implementation of investment strategies. An investment strategy should consider the following:
- Risk vs reward
- Ability to repay loans on time, and
- Member’s insurance requirements
numbers Tax & Accounting handles all compliance needs, including pension fund tax returns, financial statements, and independent audits and reviews. and ASIC requirements
Melania and Stewart have asked their employers to donate $2,000 of their annual salary to the SMSF. Which they know they won’t have much to lose. By doing this every year, your Super Credit will increase your total income over the years and save you around $800 a year in tax.
What Will Happen Next?
Melania and Stewart plan to own an investment property until their retirement.
Before retirement, the SMSF will pay 15% income tax, less than 34.5% surcharge. Which will make the maximum balance the highest. When they retire, the SMSF will not be taxed on the income from the property, and no capital gains tax will be payable on the sale.
Similarly, during the retirement phase, any income received under the SMSF in the form of dividends or capital gains from their stock portfolio will not be taxed.
That’s A Big Saving!
Melanie and Stewart, as trustees, realized they didn’t have to do everything themselves. Interact with Numbers Pro Tax and Numbers Pro Financial Planning to help manage approvals and investment solutions that make life easier for them every step of the way. This ensures that their strategies are aligned to achieve financial goals. They can leverage and explore new investment options such as cryptocurrencies and emerging markets that are not easily accessible through industry funds.
After retirement, Melania and Stewart will greatly increase their ability to accumulate retirement funds.
Self-Organized Super Chest With Numbers Pro
Take advantage of SMSF with support from Numbers Pro Team. We have a team of experts to help you grow your retirement balance and achieve all your current and future financial goals. So click Accounting and Bookkeeping Services in Australia.