Self managed super is the largest and fastest growing super sector in Australia with the appeal for many being the control you have over investments.

If you’re already invested in a self managed super fund (SMSF), or considering it, you’d know there are many benefits including:

• choice of a broader range of investments
• the ability to borrow to invest in certain assets
• added estate planning flexibility, and
• the ability to change fund administrators without having to sell the investments or wind up the fund, which can result in cost savings.

The flipside of this are the challenges involved in running a SMSF. It can be complex and may need a significant time commitment.

While you may enjoy developing and maintaining the fund’s investment strategy, you also need to make sure your fund complies with Government regulations, which may require the help of specialists.

If you’ve got a SMSF, or you’re considering investing in one, it can be worth speaking with a financial adviser.

They can work with you on:

• the development and maintenance of an investment strategy
• selecting investments to match that strategy
• determining the right insurance
• selecting and managing transfers into pensions, and
• estate planning.

Many of us think of paying off our home loan and investing for the future as two separate strategies.

But you can build wealth while still in debt by making your debt more efficient through recycling.

It may take slightly longer to pay off your home loan, but in the long term this approach may achieve better returns.

How does it work?

With debt recycling, you:

1. use the equity in your home to establish an investment loan (such as a line of credit)
2. invest the borrowed money in assets such as shares; either directly or via a managed investment such as a unit trust, and
3. use the investment income and tax benefits from the geared investment, as well as any surplus cashflow, to reduce your outstanding home loan.

At the end of each year, you borrow an amount equivalent to what you’ve paid off your home loan and use this to purchase additional investments. You continue this process each year until your home loan is paid off.

This strategy can:

• convert your inefficient debt to efficient debt
• use the income and tax advantages from gearing to further reduce your inefficient debt, and
• grow your long-term wealth faster.

Speak to your financial adviser to see how this strategy could work for you, and to decide if it’s suitable for your personal situation and goals.

Find out how
Greg and Jackie increased their investments by $429K

Retirement means different things to different people so there’s no one size fits all solution.

Increasingly for Australians, phasing into retirement gradually is the trend as we replace full-time with part-time work before retiring.

Unsurprisingly, most of us also want to maximise our retirement savings so we can maintain our standard of living after we leave the workforce.

The good news is there are many strategies to help achieve your goals that can be used in the lead up to, and during, your retirement.

Here are some ideas to get you thinking.

Make your retirement savings tax effective

When it comes to your super, you generally have two options; you can take the money as a cash lump sum and invest it elsewhere, or keep it in super by rolling over to an income stream investment, like an account-based pension.

Income stream investments are very tax effective for the following reasons:

• No tax is payable on earnings within the fund.
• If you start an income stream between the ages of 55 and 59, the taxable income payments you receive will attract a pension offset, which may enable you to receive thousands of dollars a year tax free.
• At age 60, you can receive unlimited tax-free income stream payments and you don't have to include these amounts on your annual tax return. This could reduce the tax payable on your non-super investments.

Transition to retirement strategy

If you’re 55 or over and still working, a transition to retirement strategy may allow you to build a bigger retirement nest egg without reducing your current income.

Here's how it works:

• you contribute part of your pre-tax salary directly into your super fund
• you transfer some of your existing super into a Transition to Retirement Pension (an investment that allows you to draw down on your super), and
• you use the regular payments from the TRP to replace the salary you sacrifice into super.

A financial adviser can help you work out how much you’ll realistically need to live on in retirement and how to achieve it. They can also help you with pre-retirement strategies.

Find out how
Craig boosts his super by $100K