The Benefits of an SMSF Loan

All of us want to know that when we retire, that we have a suitable nest egg waiting for us, when we do. We start to plan now, in our younger years, in order to make sure that we can continue to lead a good quality of life after we have stopped working. There are many options open to us, and many people invest in the government pension, private pensions, investing in property, and stocks and shares. Our motivation is to supply ourselves with a sufficient income in our older years, and hopefully, have a little bit left over, to leave to the ones we love.

Whatever your motivations are, SMSF loans are a very popular way to create wealth, for the long-term. Here are some of the reasons why people choose them.

• Using income to pay off your loan – This is probably one of the biggest advantages, because you can use the income that you make on your property, to help to pay off your debt. This allows you to keep your investment totally separate from any other interests that you might have, and so this allows you to keep track of your returns over the long run.

• It reduces your tax liability – In a lot of cases, you can claim the interest on your loan as a tax deduction, using the self-managed super fund loan. Anything that can reduce your tax liability has to be seen as a positive, and as long as you stick to the rules with regards to tax regulations, and tax laws in Australia, then you should be good to go.

• Boost your retirement savings – A wide number of people use an SMSF loan, as a way to increase their retirement savings. You can do this by borrowing with the fund, and so you don’t have to pay any tax on any capital growth that you get from the assets.

The best thing about it all, is that you can secure your assets, and this means that the lender does not have the option to pursue your other assets, should you be unable to pay back the loan in full. This comes in very useful when your investment portfolio is quite diverse. It seems clear, then, that the benefits of a self managed super fund loan are reasonable enough for you to look into this very popular choice. As with everything in life, do your homework, and then try to make the right decision for you.