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Super…should you do it yourself?

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Self Managaged Super Funds

"For many of us, building a sufficient superannuation balance for retirement is likely to be the most important thing we can achieve in our working life.

After all, the quality of your lifestyle in retirement depends largely on how much you contribute to super, and the investment choices you make.

 

So it's expected that many of you would be very concerned with how your super is run.  Furthermore, an increasing number of us who want even more control over our super are transferring from larger funds into self-managed super funds (SMSF).

An SMSF has a maximum of four members and is primarily designed for business owners and their families.  However, SMSFs are not generally recommended as a cost-effective option if you have less than $250,000 of super assets.

 

Major advantages of SMSFs include: 

  • greater control over the structure of the fund and types of investments;
  • potential savings on management fees; and
  • the opportunity to make the best use of the tax environment.

Don't be a slave to your super fund!

Despite its growing popularity, many only find out after starting one just how much time and work is involved in running an SMSF.  The penalties for not complying with SMSF regulations are severe.

Fortunately, there are SMSF services available that allow you to run your SMSF without having to perform all the time-consuming administrative activities.  For example, you can use a professional administration service, while having your own accountant look after some of the fund's compliance and reporting, and have a real estate agent to manage your property in super.

Is it really necessary to have an SMSF super fund?

For most of us, probably not!  After many years advising clients and their SMSFs, direct property ownership is perhaps the significant motivator in deciding to have one; for example, if you have business property and wish to have it transferred to super, or you wish to invest in residential property via super.  There are many other reasons to have an SMSF, but the majority of us will in the end find out that a ‘normal’ super fund would be adequate in facilitating our retirement plans.

Managing your own superannuation fund can provide you with greater flexibility, greater control and a more cost-effective way to manage your investments in retirement.  But it's not for everyone...  so make sure you consult an experienced financial planner before deciding on whether an SMSF would be right for you.

 

Still have some questions?

If you want to discuss your superannuation options with one of our advisors. Call us to arrange an appointment on 02 9328 0876.

 

General Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. Please seek personal financial advice prior to acting on this information.

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