David Wood from ULTRA106.5FM chats Super with our founder Yannick Ieko, and they discuss what people are doing when thinking about retirement.
You can listen to the interview or read the transcript below.
David: You’re listening to morning lifestyle with Dave and today it’s a topic of finance. And I’m going to catch up with an expert in loans and in retirement funds from SMSF Yannick. Joining us Yannick, welcome along.
Yannick: Thank you, thank you for having me.
David: For those of us who are thinking about retirement, and I will put myself in that category because it’s probably another 10 years where before I can do it, how do we set something up like a self-managed superfund?
Yannick: Self-managed super funds have become pretty mainstream nowadays, and they’re fairly straightforward and inexpensive to set up. So, usually would recommend that even though you can do it yourself, we would generally recommend to clients to use an accountant, an accountant that’s got experience with self-managed Superfund. Their accountant has some expertise in this deal. That’s perfect. Otherwise, you know, a quick Google search can really point them out in the right direction. And it takes you know, three to four weeks, a few $1,000 and you can have a self-managed Superfund up and running and start taking control of your super and your retirement investments.
David: Any tax incentives by doing this particular course of action rather than any other?
Yannick: The tax incentives, superannuation is a very it’s probably the most attractive tax environment within Australia that applies to self-managed superfund and superannuation in general. What appeals to a lot of people that are going down the SMSF path is that we can take advantage of that tax environment with the benefit of property to able to leverage their superannuation as a deposit to purchase the property so they can get an asset that was a lot more than the amount of silver that they’ve accumulated today. And then if they hold on to that asset for long enough, it can potentially find itself in a 0% tax environment by the time they sell a property. So, if you do it right, you can get all the benefits of the loan, the property, the growth, and then at the end can take your own percent on the profit. If you do the same thing outside of super there’s obviously capital gains tax and a few other bits involved that are going to buy, that’s what attracts a lot of people from a tax perspective, in terms of SMSF.
David: Well, most places around the country, property prices are going through the roof and need larger investments as well. So how difficult to get into that sort of property market to start with?
Yannick: Yeah, that’s a very good point. It has been, we on the back of a period of strong growth and if you’ve read the media or the commentators or the specialists, they be expecting that it’s gonna cool down a bit and it’s probably going to become a bit easier to get in than it has been but overall, yes, there have been a lot of price increase but we’ve seen people mitigating that by potentially looking at regional investment. So, buying houses in regional areas where the prices are still lower and then it depends, other people will decide to join forces. Very recently, the legislation was changed to allow the superannuation to accommodate up to six members. So, they went from a maximum of four to six. And we’ve seen people joining forces with joining the superannuation to pull more resources and then allow them to go after bigger price items. You know, that works quite well ever.
Yannick: So that means you have more control over which what you’re doing with your super, very much sure that’s, that’s the that’s the essence of the self-managed super fund. You take control of the funds in you then decide how they invested or you get advice and you can at least supervisor give a direction. So again, it depends on the level of literacy of the trustees of the fund and the people that have decided to do that. But you have a huge amount of discretion in terms of how you invest the money. And we think people going in very different directions in terms of what assets they decide to put in, but it can be pretty mainstream or it can be pretty exotic, you know, some supers are going into crypto and precious metals and all nature of investment. So, you do have a lot more choices and you do have a lot more control over what’s being done.
David: And as you said it’s important to get advice before you venture down that this path because at the end of the day, it nastic for the future, isn’t it?
Yannick: I think it’s crucial, both in terms of the investment and where people want to invest their money in in terms of the compliance to make sure that they have managed super funds remains compliant and they don’t get in trouble with the regulator. So yes, advices it should be it should be part of every endeavor on the upfront.
David: Yes. Excellent. Well, Yannick we thank you for sharing your expertise with our listeners this morning and anybody that’s interested in setting up something similar www.smsloanexperts.com.au is a place to go. Thank you very much for your time.
Yannick: Thank you. Have a good afternoon.