Stake Academy Super - Stake Super Accounts

From deciding how and where your super monies are being invested to cost and tax benefits. Self Managed Super Funds (SMSF) provide unparalleled access to a diverse range of assets. While 1.1million Australians have taken control of their super, SMSFs are often seen as being expensive, complex, and only for those with significant assets. We provided some clarity on some of the most common questions and misconceptions.

How does Stake Super work?

As you’d be aware, at least 10% of your salary is paid out to a professionally run investment fund to manage your money for retirement. Such funds are restricted in what they can invest in and are typically limited to broad baskets of shares and investment trusts.

An SMSF is a private super fund that allows you to control how your super money is invested. SMSFs can have up to 4 members, and a company is typically set up to act as the trustee.

The SMSF has its own separate bank and trading accounts, but the actual buying and selling of investments are identical to investing like you would on a personal account. An SMSF can receive employer and personal contributions as well as hold insurance for members the same as an industry or retail super fund.

What can an SMSF invest in?

Primarily, SMSFs allow account holders to include shares, property (commercial and residential), and managed funds.

On the other hand, an SMSF can’t invest in or lend money to a member of the fund, their family, or a business they control. Any investment that provides a present-day benefit to the members is also prohibited. A classic example is a holiday home used by the members of the SMSF; a big no-no!

Benefits of an SMSF

Investment Choice

An SMSF allows direct access to investments not available to members of larger superannuation funds including private equity, precious metals, cryptocurrency, and direct property.

Cost Sharing

More than two-thirds of SMSFs have two members. Combining your super balance with your partner enables the costs of an SMSF to be shared. In addition SMSF fees are typically fixed, meaning as your super balance grows your fees (as a percentage) decrease.

Tax Benefits

SMSFs pay the same rate of tax as other superannuation funds, however, SMSFs provide more control especially in regards to the timing of when tax is paid.

Large superannuation funds take cash from member accounts on an ongoing basis for the tax on contributions and estimated gains. With an SMSF these amounts stay invested until the SMSF’s tax is due many months after the end of the financial year.  This means an SMSF allows more money to be available for investment for a longer period.

Extra Strategies

There are also certain strategies such as contribution ‘double-dipping’ which can only be used by SMSFs. This is where someone can contribute more than their annual contribution cap to their SMSF in June, however, it’s not allocated to their account balance until July.

This strategy enables an individual to claim a larger tax deduction with no penalty for exceeding their contribution cap. Ideal for reducing the tax on any personal capital gains.

What’s the minimum SMSF balance?

There is no minimum amount required to set up an SMSF however very low balances may not be cost-effective. Current super fund fees should also be looked at prior to making a decision on an SMSF.

The largest proportion of new SMSFs are set up by people between the ages of 35 and 44. These SMSFs will be running for many decades, meaning an SMSF is more about where you’re going, not where you are now.

For a detailed look at how much is needed for an SMSF, head over to the Stake Super page.

Stake Super simplifying super

When we spoke to our customers about what was preventing them from setting up a self-managed super fund (SMSF), two key impediments came up: Fees and complexity.

Stake Super delivers a simple, digital solution that removes complexity and keeps the fees as low as possible. Beta customers only pay a yearly fee of $770, which is less than a quarter of the average SMSF fees.

The Stake Super solution is completely paperless. Once you complete the simple online registration we will set up your SMSF and send you the required documents to sign electronically. We will then register the new SMSF with the ATO, set up a bank account with Macquarie Bank and a trading account with Stake.

All the way through the process we will be in regular contact via email and phone so you know exactly what’s happening and when you need to do something.

Each year an SMSF must have accounts prepared and audited, and a tax return lodged. Stake Super takes care of all these requirements on your behalf. All you need to do is electronically sign and approve the payment of the tax payable to the ATO.