Advisory firm HLB Mann Judd Sydney believes the popularity of self-managed superannuation funds (SMSFs) will continue to increase regardless of federal government changes to the retirement income system.
HLB Mann Judd wealth management partner Jonathan Philpot said technology advances are continually driving down the costs of running an SMSF and the option may be worth considering among those who are focused on their super savings.
"As the last few years have shown, younger people with lower balances are starting SMSFs earlier. There is no way to have greater control over your super than through an SMSF and I expect the popularity of the structure to continue to increase, regardless of government changes to the retirement income system," Philpot told a media briefing in Sydney yesterday.
"With advances in technology and streamlined administration, the cost of running an SMSF has decreased substantially over the years. SMSF is now a valid consideration any time after your fund balance hits $200,000."
With the expectation of more changes to superannuation in the May federal budget, Philpot said now was a good time to review personal super arrangements and make sure individuals make the most of current rules.
He does caution against borrowing to make large non-concessional contributions to super before the May budget, particularly given the borrowing is not tax deductible.
"However, saving in super is a good idea, and if people are in a position to make large non-concessional contributions, and in particular to make use of the three year bring forward rule of $540,000, then they should do this prior to the budget," Philpot said.
"It still surprises me that people are far more willing to invest in property in order to access the benefits of negative gearing and receive a tax deduction, when often they would receive a larger tax deduction if they considered either salary sacrificing or making personal super contributions."