In a word or two, what is the benefit of this plan?
To have a larger asset growing in your favour rather than a smaller asset – using the very same amount of funds. In other words, which is best – to have say $200,000 double in value over time or to have $500,000 double in value.
How much do I need in superannuation to do this?
The consensus is $200,000, but depending on circumstances it is possible to begin with less than that.
Is it complicated?
Yes, it is more complicated than owning a property in your personal name. The rules and obligations are generally too much for a lay person to abide by. Accordingly this is all handled by a superannuation expert who gets a small fee for doing the initial set up and annual audit. The fee is factored into the figures at the outset and is paid by your superannuation fund, not by you personally.
Do many other people use this strategy?
SMSF’s now make up 30% of all Super assets in Australia. There are 597,000 SMSF’s in Australia of which 7% have a similar structure (LRBA) to what we propose.
Name another advantage of doing this?
Lower tax rates. You can grow your wealth less hindered by taxation during your working life. Many people pay tax at the 46.5% or 38.5% rate. Even company tax is at 30%. Within superannuation surplus income is taxed at just 15% and capital gains at 10% (and that’s only if you sell) After you retire there is no tax at all.
Why not leave my superannuation money in the present retail fund?
Apart from the reasons mentioned on this website, you avoid the effect of the retail fund (middle-man) taking the significant annual fee. This stunts your ongoing growth and over time makes a dramatic difference to your eventual position. A SMSF is your very own super fund with no middle-man.
Who does this system ideally work for?
The people who see the most advantage in our system have some or all of these characteristics:
1) Want a larger not smaller asset growing in their favour to achieve their retirement nest egg.
2) Mortgage stress or they feel like they’ll never pay off their personal home loan. They want an extra growth asset.
3) They feel they are paying too much tax.. Every dollar lost in tax is money lost forever. You can’t ask for it back when you are 65.
4) Crippled Cash-flow – After tax, mortgage and expenses their investable cash-flow is crippled. There is nothing left over for the future. Our plan gives such people something good for the future.
5) Stagnant Super – Their present superannuation is stagnant and there is no plan on how to best utilise it in the optimal way.
6) Investment Overwhelm – They want simple investments to get ahead, no jargon. They like the idea of assets that eventually provide passive income on which to live on in retirement.