Example Case Studies

SMSF Returns

Returns from your Self Managed Super Fund (SMSF) will vary according to the investments that you choose.

To ensure smooth returns through the economic cycles you may wish to consider investing in a diversified portfolio.

Please read on to see an illustration of how you can maximise your returns.

What should I invest in?

Most people that are operating a SMSF invest in either shares or property as each of these investment types may outperform the other at different times during the economic cycle.

Making sure that you invest your money at the right time is something that even professional investment managers find difficult.

However, with the right information and market research you can make an informed decision and invest monies from your SMSF into the most profitable area.

Case study – borrowing to invest in property

This case study compares the costs and benefits of a couple in their early 40’s buying an investment property in their SMSF compared with the traditional method of buying an investment property in individual names.

By buying the property in their SMSF (after taking all costs into account) the couple can expect to be about $40,000 better off in 10 year’s time, compared with the alternative.

How can they get the most out of their SMSF?

The difference comes predominantly from the tax savings associated with salary sacrificing into super and with the lower tax rate paid by the super fund on rental income.

In addition to the above benefits, there are further benefits if the couple holds the property until they turn 55 years old and both start a pension from their SMSF.

What tax benefits can they gain?

Once their SMSF no longer pays tax on investment earnings, they should receive additional tax benefits of around $9,000 a year!

If the couple decided to sell the property once they are on a pension, no capital gains tax would be payable and there would be further tax savings of more than $100,000.

The members will also have much more protection in the event of a job loss or loss of tenant.

This is because the super fund will have other investments from which it can make loan repayments.

For full details of this case study including assumptions, please see our case study.

Contact our team

If you want to make the most out of your SMSF and maximise your fund’s profitability please enquire online today.

We are the experts in SMSF loans and financing arrangements and know which banks will accept or decline your loan.

Additionally, we provide SMSF management and administration services, giving you the tax advice you need to make sure that you are complying with your legal obligations.

Note: this website is for informational purposes only and should not be substituted for professional financial or taxation advice.