All You Need to Know about SMSF in 2022!

All You Need to Know about SMSF in 2022!

Now that a new calendar year is underway, there are many essential issues that SMSF trustees need to consider before looking at the details in the next few months. There are mainly four essential things that you need to think about. 

The four things are investment strategies, the aging population in Australia, changes to the Super laws and the federal election/superannuation. You could take the help of an SMSF tax accountant to know about more important things regarding SMSF.  

Important Things That You Need to Know Regarding SMSF in 2022

The four important things that you need to know regarding SMSF this year are as follows: 

  • Review the investment strategy 

You should not forget about the importance of SMSFs investment strategy as the fund moves through retirement periods and accumulation. As it is a new year, this might be the time to revisit the fund’s strategy to ensure it continues to fit the purpose. 

There are various questions that you need to find the answer for, such as:

  1.  Did someone join or leave the fund, or
  2. Does the proportion of investment in different asset classes need rebalancing? 
  3. Was a pension started or stopped by a member? 

If the trustees have the proper knowledge and skills. Then they might decide how the investment strategy needs to be modified. For those who are not sure, help from an SMSF accountant in Perth can be helpful.

  • Consideration for an investment strategy under the superannuation law is the cash flow and liquidity of the SMSF. This includes an understanding that the fund can meet its liabilities and expenses like loan repayments. This is if the fund has limited borrowing arrangement/pensions payment or different fund expenses. 
  • If an SMSF is overweight for a specific asset class, the fund might not break any investment guidelines. But it needs to be known if the position can be justified by the trustees, given they require to show how the investments join the member’s retirement savings. 
  • They also need to know how investing in a high quantity of members’ retirement savings in one asset or an asset class can meet the retirement goals. Another aspect of a fund’s investment strategy is insurance. Which needs to be considered as a part of an investment strategy review.

This year may be an appropriate time to explore insurance, especially for young people. In such cases, SMSF accountants in Perth can prove to be helpful for the young generation. 

  • The aging population of Australia 

Since 2011, when the first individual of the baby boomer’s generation became 65, the percentage of the old age population began to increase, and the young population started to witness a downfall. 

  • These events also flow to taxation as they result in less government revenue due to the participation of the lower labour force. And also because of the demand for government programs that help support the old Australian population.  
  • This indicates that the old Australian population needs to depend more on their superannuation savings at retirement as they might live longer than any previous generation. They need to address whether their retirement savings in their SMSF and other income sources expire before them. 
  • Succession planning and the estate also need to be an important consideration. As the population ages, problems like dementia and other disabilities can affect the quality of a trustee of an SMSF. If the trustee of an SMSF is incapacitated as they cannot undertake their duties as a trustee, the fund might fail to qualify as an SMSF. 

You will get to know more about this from best accountants perth. If the fund does not qualify as an SMSF, it could lead to compliance issues that indicate succession planning is essential in 2022. Similarly, what happens to member benefits and funds. When a member passes away is likely to occur as people hit their seventies. 

This year, people need to start taking steps to ensure that the right outcomes occur during their demise, like who receives the SMSF benefits when they pass away and how it will be paid. 

They also need to decide if money needs to be in the super system or should it be invested personally and pay taxes at personal rates. 

  •  Legislative changes 

There have been a number of changes to the super legislation in 2022, especially to the contribution rules. At the end of 2021, the government introduced the Treasury laws Amendment Bill 2021 into parliament. 

  • This bill seeks to enhance flexibility for Australians who are preparing for retirement by making changes to the contribution rules. Presently, anyone under 67 years of age can contribute to super without meeting a work test.
  • The bill abolishes the work test, i.e. 40 hours’ work for 30 days, so Australians between 67 and 75 can make non-concessional superannuation contributions. The new rules also extended opportunities until a member turns 75. 

Someone who is 74 on 1 July would have time till their 75th birthday to make a non-concessional contribution using the bring-forward rule. This can allow the re-contribution strategies to change the mix of taxable/tax-free components for the benefit of a member for estate planning reasons. 

  • Budget and the election 

This year the federal election needs to be held by May. And the government has already set a budget date in March. Budgets during election year provide some benefits, and superannuation changes in the parliament can be an example.

Read More:- How To Improve Your Advertising Using Sign Boards For Various Industries

Final Words 

If you have set up an SMSF fund and want all the members to reap its benefits upon retirement. You need to be updated regarding the latest rules. A SMSF tax accountant can help you know all the latest changes in Australia’s superannuation in 2022. 

This way, you will be able to make all the necessary changes and ensure that financial benefits can be provided to members after retirement or their families if any trustee dies.  


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