My husband and I are wondering whether it is still worthwhile maintaining our self-managed super fund. We currently have about $1.6 million in our SMSF. The fund previously held investment properties, but we have now sold those properties and the fund is invested in financial assets.

We have a financial adviser, but before discussing this with him, I’d like to do some independent research and understand whether an SMSF still makes sense for us. Given the costs involved in running an SMSF, would we potentially be better off transferring our super into a professionally managed industry or retail super fund instead?

At what level of superannuation does an SMSF generally become cost-effective, and are there other advantages of retaining an SMSF that we should consider beyond simply comparing the fees? We are both retired, so the fund is also now at a different stage of its life than when we originally established it. What would you suggest we look at when deciding whether to keep the SMSF or move to a managed super fund?

The conventional thinking is that you should only use a self-managed super fund if you wish to invest in assets that are not readily available through a normal retail or industry super fund.

These may include your own business premises, unlisted property syndicates and, in my own case, listed shares with such a small market capitalisation that the normal managed super funds do not have in their portfolios.

Given you have sold your investment properties and now have the money invested in normal cash and equity-based assets, I see little purpose in retaining the SMSF simply for the sake of having one.

With $1.6 million, the issue is not so much whether the fund is large enough to be cost-effective, but whether the additional flexibility and control you get from an SMSF justify the costs, administration and responsibilities involved.

There is another important issue for retirees. As they age, the administration of an SMSF can become so onerous that they simply don’t want to keep doing it. This is particularly relevant if one partner loses capacity, leaving the other partner to deal with all the investment decisions, paperwork and compliance.

In your situation, I would be asking your adviser to compare the total annual cost of retaining the SMSF with the cost of moving to a suitable retail or industry fund, while also looking closely at what investment flexibility or other benefits you would actually be giving up.

If there is no significant advantage in keeping the SMSF, simplifying your affairs while you are both able to make the decision may make a great deal of sense.

For the purposes of that regulation, your spouse is always regarded as a dependant.

I have a share portfolio of about $117,000, with most of the shares bought in the mid-1990s. I am a self-funded retiree and my taxable income is well below the tax-free threshold. Like many investors, I am trying to understand the capital gains tax changes due to start on July 1, 2027.

Would it be sensible to sell some shares before then to avoid paying substantially more tax in the future? My understanding is that capital gains may then be taxed at a minimum rate of 30 per cent, with indexation replacing the present 50 per cent CGT discount. How would indexation be calculated for shares held for 30 years, and where would I find the necessary figures? Would the gain accrued up to June 30, 2027 still qualify for the existing 50 per cent discount, with the new rules applying only to gains arising after that date? If so, the market value of my shares at June 30, 2027 would appear to be critical. What do you think?

The key date is June 30, 2027. If you sell your entire portfolio before then, the existing capital gains tax rules will apply. If you sell after that date, the gain up to June 30, 2027 will still be taxed under the current rules, including the 50 per cent discount where applicable.

Only the increase in value after June 30, 2027 will be taxed under the new regime, with that gain adjusted for inflation instead of receiving the 50 per cent discount.

My wife and I are in our late seventies. My wife has $600,000 in her super account and has lodged a binding beneficiary nomination with her superannuation fund naming me as the beneficiary. I am not a dependant for tax purposes. She believes that 100 per cent of her account balance will go to me upon her death, while I think that 20 per cent of the $600,000 will go in tax, as I am not a dependant for tax purposes. Who is correct? Is there any way of avoiding the 20 per cent tax if I am correct?

I assume you mean the death tax, which is 15 per cent plus 2 per cent Medicare levy on the taxable part of superannuation left to a non-dependant.

The good news is that your wife is correct. For the purposes of that regulation, your spouse is always regarded as a dependant, whether or not you are financially dependent on her. Therefore, the benefit can be paid to you tax-free, so you’ve got no worries.

If we add deposits to an insurance bond, provided they are no more than 125 per cent of the amount contributed in the previous year, does each new deposit have to commence another 10-year period before it can be withdrawn tax-free?

You are allowed to make contributions to an insurance bond whenever you wish. As you say, provided those contributions are no more than 125 per cent of the amount contributed in the previous year, you will stay within the original 10-year tax-free period and a new 10-year period does not commence.

But many people do not realise there are also valuable concessions if the bond is cashed before the 10 years are up. If it is cashed during the first eight years, the full earnings component is assessable; in the ninth year, only two-thirds of the earnings are assessable, and in the 10th year, only one-third is assessable. After 10 years, the earnings are tax-free.

Furthermore, where earnings are assessable, the investor receives a 30 per cent tax offset to compensate for the tax already paid within the bond. This means there may be little or no additional tax to pay. It can be particularly useful if the bond is left to a low-income beneficiary, such as a grandchild at university.

A person with little or no other taxable income may have no additional tax to pay on the bond proceeds, while the 30 per cent tax offset can be used against tax payable on other income. However, any unused portion of the tax offset is not refundable.

This combination of the 10-year rule, the concessions in years nine and 10, and the 30 per cent tax offset is one of the features that makes insurance bonds such an attractive investment.

Noel Whittaker is author of Retirement Made Simple and other books on personal finance. Questions to: noel@noelwhittaker.com.au

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.