Squirrel has taken the traditional self-managed super fund (SMSF) and made it simple. Check out how we’ve done it and whether a SMSF might right for you.
For years the big end of town made millions in fees from compulsory funds every day Aussies have in super. Remember that 9.5% of your salary goes automatically into super – that’s two days every month you’re spending at work just for your super.
Managing your own super was made out to be complex and difficult – something only the experts could manage. At Squirrel we believe that with a little help from us, our amazing technology and team, you can do it yourself – and without all the fees and commissions there is a good chance you’ll do better than the so called experts.
“Hey, you know what, I just bought my first investment property with my Squirrel SMSF – a walnut plantation. Now I’ll have enough nuts to last the distance.”
“Yeah, all that great stuff you hear about Squirrel SMSFs is true. I just bought a nut house with them. Crazy simple!”
A self-managed super fund (SMSF) in its simplest form consists of tax and trust structures that exist for the sole purpose of providing funds in retirement. A SMSF allows you ultimate flexibility and control to invest in almost any asset and any currency anywhere in the world from shares and bonds right down to buying your next door neighbours house to rent out as an investment property.
Each SMSF can have up to four members – this means you could, if you wanted to, pool your funds to invest into larger assets, or like a normal super fund, let each member do their own thing. To start with, it could be just you, or you and your spouse. Every member must become a director of a trustee company. It’s the job of the trustee company to control the SMSF – being directors of the company, you will make all the investment decisions.
Super can have excellent tax benefits. For example things like capital gains tax. When you buy and sell something in your own name for a profit, e.g. a house, you’ll have to pay significant capital gains tax on that profit. If you were to do the same within a super fund, then you’d pay a lot less tax. However, if you were to keep the asset and sell it after you have retired, and you’re in pension phase, then you won’t have to pay any capital gains tax at all.
Imagine all the things you could do with the money you’ve saved this way. Perhaps help the kids get a new home or take a nice, long vacation …
For a good understanding of the rules and the risks applicable to SMSF, we recommend you review our “SMSF Risks” Page.
For lots of our clients, simply finding an investment property for their SMSF, and renting it out, gives them a lot of comfort. So, if you’re not big on having your money invested in shares and in the hands of some guy in a swanky office, then maybe buying a property is for you.
The general rule of thumb is that you should have about 30% or more of the property value in your super to be able to take out a home loan. The good thing about SMSF is that you can pool the funds of up to four people, which could potentially make it more affordable for you to purchase a property in an area that you like.
|Starting balance (pooling a husband and wife’s super funds):||$100,000|
|Property purchased (SMSF borrows $200k):||$300,000|
|Expected annual returns*|
|Capital growth (based on property doubling every 20 yrs):||$15,000|
|Rental income (based on 4.5% rental return) :||$13,500|
*The above example is an indication only – there are other costs associated with purchasing and operating an investment property, for example loan repayments. Give our friendly team a call so you’re fully aware of everything that’s involved in buying a property with your super.
If you have your own business, you can even use your SMSF to purchase your business premises where you can pay rent directly to your SMSF at the market rate. Awesome, right?
With that being said, yes, there are some rules that must be met, such as passing the sole purpose test, but we are here to give you our full support and guidance each step of the way.
There’s a reason so many of our clients use their superannuation to buy property through an SMSF.
Property is generally considered to be a safe investment, especially in Australia where real estate can double in value every 10 years in the capital cities.
A growing population means there’s a bigger demand for rental property.
Your SMSF will gain a passive income from your investment in property. I.e. you don’t really have to do all that much in comparison to share trading.
Buying an investment property has many benefits, as well as some responsibilities and risks to consider.
As a landlord, you will need to manage the tenants of investment property. This includes finding them, doing background checks and ensuring they pay their rent on time.
You also have to be responsible for the upkeep of the property and making sure it’s maintained. You will have to undertake gas checks, boiler replacements and fumigations. Making sure the property is in a good state of repair can be time-consuming and could be expensive if there are major issues with the property.
If you put all of your super balance into a property, this reduces the diversification of your investments. Essentially you’ll have all your nuts in one basket. So you need to be sure that where you’re buying will have some capital growth, or at least provide you with a constant stream of potential tenants.
Track your contributions and get alerts when your employer makes a payment into your account.
Set your investment strategy, monitor and make adjustments easily.
Start a transition to retirement pension and take advantage of great tax benefits with the click of your mouse.
Buy and sell shares on the move, manage your investments – simply and quickly.
Manage the financial ins and outs of your investment property online.
Access quality research on listed shares, exchange traded funds and hybrid securities.
Support when you need it. For the really curly questions, access a Squirrel technical expert via skype, phone or email for that little bit of reassurance.
Complimentary training on investment choices and the financial world. Learn about investing in property, shares, term deposits, bonds, bullions and more.
It’s not like the old days when you would need to take a few days off work for visits to an accountant, lawyer, adviser, bank.
At Squirrel we take care of all of this online with a minimum of fuss.
Open your Squirrel SMSF in minutes
Need help? Call our team on 136 887 or Chat with our Team
I needed to move my money into an SMSF. I was sick of the [standard retail fund] losing my money. I was not happy with my current arrangements, paying for things I wasn’t using and wanted to put it into property rather than shares.
Squirrel really assist you with setting up an SMSF, especially with being compliant, without it being a minefield, and navigate you through it.
I have found Squirrel to be absolutely amazing. Every consultant has been very responsive and helpful, the whole experience was efficient. In comparison to other SMSFs, the model Squirrel has is good value for money.
We joined Squirrel so we could access our super money to buy an investment property.
I’ve been with Squirrel for four months, certainly the process with Squirrel was fine, special compliments to the Squirrel team assistant, Darralyn, she was very helpful.
I feel confident about purchasing an investment property with my Squirrel SMSF.
We are all set to go – once we get the property.
It’s been really easy to set up a self-managed super fund with Squirrel. They are really helpful and friendly, and the package is offered at a very competitive price. I use my fund for trading shares and overall it’s been simple and easy.
Knowledge and reliable staff, cost-effective. I have already recommended Squirrel to friends.
Thank you for setting up the SMSF, all the hard work was done for me – from start to finish.
I chose Squirrel mainly for the funny ads. It seemed so simple to obtain an SMSF, and it was. I didn’t need to do anything except provide relevant information.
Squirrel is an Australian Financial Services Licensee that supports everyday Australians manage their own superannuation through amazing technology and education.
Squirrel Superannuation Services Pty Ltd ABN 87 169 366 750 is the holder of AFSL and Australian Credit License number 462160 and is a wholly owned subsidiary of Squirrel Limited ABN 64 605 835 514, A.C.N 605 835. Any advice on this website does not take into account your objectives, financial situation or needs and you should consider whether it is appropriate for you. You should consider the relevant Product Disclosure Statement and the Financial Services Guide available at squirrelsuper.com.au when deciding whether to acquire, or to continue to hold, a product.
Testimonials appearing on this site were obtained from Squirrel customers, mostly in September 2016. They are individual experiences of customers that have used our products and/or services. We do not guarantee that they are typical results that consumers will generally achieve. Testimonials are not necessarily representative of all those who will use our products and/or services.
Information is current as at 21 September 2016 and is subject to change.