To Gear or Not to Gear in Super… That is the Question

By Terri Loy

The changes to the rules last year to allow Self Managed Super Funds (SMSFs) to borrow under certain conditions certainly has raised a few eyebrows and generated widespread interest.

It is exciting news for some SMSF Trustees who feel they can now use gearing as a strategy to increase their wealth within superannuation. However, be warned… gearing does increase the potential for greater returns but it also increases the potential for greater losses. And ultimately it's the losses that could seriously affect a person's overall retirement position.
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