Self Managed Super Funds
Maximise control over your retirement savings with self-managed super funds (SMSFs), empowering you to make strategic investment decisions tailored to your financial goals.
An SMSF is a personal or family superannuation fund that is managed by the members of the fund, who are also the trustees .They can tailor their own investment strategies and select specific assets such as listed securities, managed investments, cash and term deposits, international equities, instalment warrants and so on. Generally, an SMSF has a personal or family super fund with no more than 6 members; each member of the fund is a trustee; no member of the fund is an employee of another member of the fund, unless those members are related; no trustee of the fund receives remuneration for his or her services as a trustee and the SMSF must have a written Trust Deed and Investment Strategy that meets all members' objectives.
Morgans offers a variety of services for SMSFs, including structure, setup, advice, rollovers, investments, administration and compliance. We have investment advisers who specialise in superannuation and a technical research team that provides updates and support on the latest in superannuation developments.
How does it work?
Our solutions
Our Wealth+ SMSF solution is an all-encompassing portfolio administration and SMSF administration service that allows you to take advantage of the flexibility and control of an SMSF, but outsource the work involved in establishing and running your fund.
Clients and their accountants can benefit from our Wealth+ Managed Portfolio Service, which is a reporting facility that we offer for portfolio administration. This service makes investing easier by collecting and recording all investment information/documentation, however SMSF trustees will need to arrange annual administration of the SMSF using an accountant or administrator.
Our SMSF administration only service provides fund administration without the portfolio administration. Please contact us or your Morgans adviser to find out more.
SMSF advantages
There is no doubt there are advantages to SMSFs, including greater investment choice – direct and indirect investing; greater control over investment strategies; access to investment gearing opportunities not available in retail super funds; cost effectiveness over the long term; offers preferable tax arrangements and allows you to look after your family.
Getting started
Morgans recognises that effective wealth management is crucial for asset growth and financial freedom. Our experienced advisers will navigate you through the wealth management process, assisting in setting short and long-term goals and implementing strategies.
It costs money to set up and run an SMSF. You might find that the fees you pay for an SMSF are more than you would pay in another type of super fund. In many cases, setting up an SMSF with a starting balance of $200,000 or below is unlikely to be the best superannuation option for you.
Setting up
When opting for an SMSF, the establishment process can be straightforward with guidance from specialised professionals like financial advisers and accountants. Key procedures include obtaining a Trust Deed, appointing trustees, opting for ATO regulation, member identification, securing necessary tax registrations, devising an investment strategy, opening a bank account, arranging wealth protection, and transferring existing super accounts. Streamline your SMSF setup with expert assistance from our Morgans’ advisers.
Morgans can handle the admin for you.
Successful investment management requires constant attention and adaptability. With a focus on flexibility and control, our comprehensive administration and investment reporting service streamlines the establishment and operation of your SMSF. Simplify investment administration with our reporting facility, making it easier for clients and accountants. Opt for our SMSF administration-only service for fund administration without portfolio management.
News & Insights
Australian’s life expectancies are increasing over time. We can now expect to live longer - on average 5 to 7 years longer - than our parents or grandparents did.
The problem is that as we live longer, we also need to support ourselves for longer in retirement. This is compounded by the fact that, according to the Australian Bureau of Statistics (ABS), we are retiring earlier these days with the average age of retirement reported to be 56.9 years. Interestingly, the average age people intend to retire is 65.4 years.
According to the ABS’s May 2024 report:
- There were 4.2 million retirees
- The average age at retirement (of all retirees) was 56.9 years
- 130,000 people retired in 2022, with an average age of 64.8 years
- The average age people intend to retire is 65.4 years
- Pension was the main source of income for most retirees
In their Media Release supporting their 2024 retirement report, ABS’s head of labour statistics, Bjorn Jarvis, said: “While the average age people intend to retire has risen over time, it hasn’t changed much in the last 10 years. This average has been between 65.0 and 65.6 years for close to a decade, since 2014-15. On average, men intend to retire slightly later than women, but this gap is closing. In 2022-23, there was around half a year difference between men and women, compared to a year difference a decade ago.”
Source: ABS
Income at retirement
According to the ABS retirement report, a government pension or allowance was still the main source of personal income at retirement for 43% of retirees. This was followed by Superannuation, an annuity or private pension at 27%.
Source: ABS
Factors influencing retirement
In 2022-23, the most common factors influencing older workers’ decision to retire was still financial security (36%) and personal health or physical abilities (22%). Around one in eight retirees (14%) said reaching the eligibility age for an age (or service) pension was a key factor.
Retirement planning
According to the ABS, 710,000 people intend to retire in the next 5 years, with 226,000 in the next 2 years. Will you be one of these people? If so, do you have the confidence your retirement plans will be enough to support you in retirement? Your Morgans adviser can review your retirement position and recommend strategies that will help you stay on track so that your retirement, when it happens, is an enjoyable stage of life. Already retired? We can help there too.
Contact your Morgans adviser today to schedule an aged care advice appointment. Our expert team will be able to simplify the aged care system, guide you through Government subsidies, analyse payment options, create 5-year cash flow projections, and model the benefits of home concessions and future asset values for your beneficiaries.
Following the release of the Aged Care Taskforce report earlier this year, the federal government has recommended a number of changes to the cost of residential aged care, some will commence from the beginning of 2025 and the remainder expected to commence from 1 July 2025.
Over the next 40 years, the number of people over 65 is expected to at least double and the number of people over 85 expected to triple. A significant amount needs to be invested in the Aged Care sector, by both government and private sector, to be able to manage the growing numbers of older people needing care and support in their later years.
From 1 January 2025:
- Increasing the refundable accommodation deposit (RAD) maximum amount without approval from $550,000 to $750,000. This amount will be indexed annually.
From 1 July 2025:
- Introduce a RAD retention amount of 2% pa to a maximum of 10% over 5 years.
- Removing the annual fee caps and increasing the lifetime fee caps to $130,000 or 4 years, whichever occurs first.
- Introducing a means-tested hotelling supplement of $12.55 per day which is to be indexed.
- Removing the means tested fee and replacing it with a means tested non-clinical care contribution (NCCC). The daily maximum is $101.16 which is to be indexed.
From 2029/30:
- The government is looking to commence a phase out RAD altogether by 2035. A commission will be established to independently review the sector in readiness.
Grandfathering arrangements will protect anyone who enters care prior to 1 July 2025 under the “no worse off” principle to ensure they do not pay more for their care.
Comparison of current and new aged care costs
Current aged care fees
The Basic Daily fee continues to be paid by all residents without change.
The Hotelling Supplement is paid by residents as a contribution towards their living costs. It is a means tested payment calculated at 7.8% of assets greater than $238k or 50% of income over $95,400 (or a combination of both). The Hotelling Supplement is capped at $12.55 per day (indexed).
The Non-Clinical Care Contribution (NCCC) replaces the current means tested fee. The NCCC is a contribution towards the cost of non-clinical care services which will be capped at $101.16 per day (indexed). It is a means tested fee calculated at 7.8% of assets over $501,981 or 50% of income over $131,279 (or a combination of both).
The lifetime cap for the NCCC is increasing to $130,000 or 4 years, whichever occurs first, indexed twice per year. There is no longer an annual cap.
Any contributions made under the home support program prior to entering residential aged care will count towards the NCCC cap.
Who will likely pay more from 1 July 2025?
It is expected that at least 50% of people entering care will pay more for their care each year.
The below chart illustrates the expected changes for regular care costs (excluding accommodation costs and retention amounts) for individuals based on specific asset levels:
Should you enter residential aged care before 1 July 2025?
It depends. For some people, if they have an ACAT assessment and are eligible to enter residential aged care, then it would be best to seek advice from your Morgans Adviser on both the current and future cost as well as cash flow and cost funding advice.
Contact your Morgans adviser today to schedule an aged care advice appointment. Our expert team will be able to simplify the aged care system, guide you through Government subsidies, analyse payment options, create 5-year cash flow projections, and model the benefits of home concessions and future asset values for your beneficiaries.
The year 2024 will arguably be known as the ‘cost of living crisis’ year. So many Australians are feeling the pain of this high inflation environment, particularly with everyday consumer items and mortgage stress. Unfortunately, our Chief Economist, Michael Knox, is not expecting an interest rate cut by the Reserve Bank of Australia until mid-2025.
As we enter production of this edition of Your Wealth, the proposed $3 million super tax – or Div 296 as it is known - faces an uncertain future. Will it be tabled in February when Parliament resumes? If an early election is called, it could effectively be off the table until after the election.
We hope it gets shelved completely. We have always viewed this as bad policy; in fact, the worst policy that has ever been proposed for superannuation.
This latest publication will cover Australian retirement intentions, the new Aged Care Act 2024, Trump's trade negotiations policy, expected to reduce tariffs, contribution strategies for older generations, and understanding the benefits of the Legacy Pension Amnesty which is now law.
Morgans clients receive exclusive insights such as access to our latest Your Wealth publication. Contact us today to begin your journey with Morgans.
