More than one million Australians are members of a Self Managed Superannuation Fund (SMSF), opting for more control over how their retirement savings are invested. But SMSFs come with risks you need to be aware of and require time, responsibility and knowledge.
Over the course of our "Demystifying SMSFs" series, we will be delivering articles to help you understand everything you need when it comes to SMSFs.
What is an SMSF?
An SMSF, or self-managed super fund is a way to save for retirement. It’s different from other superannuation funds because it's controlled by you and regulated by the Australian Taxation Office (ATO).
By choosing to manage your super through an SMSF, you are electing to take direct responsibility for both the selection and management of your fund's investments, and the compliance requirements of the fund.
An SMSF is a trust structure, requiring a trustee. The trustee is legally responsible for the management of the fund’s assets and has the job of running the fund and ensuring it remains compliant.
How do I know if an SMSF is for me?
An SMSF might be the right option for you if you want;
- Control over how you invest
- Accountability for your super fund
- More options tailored to your circumstances
- Potential cost savings depending on your circumstances
- More flexibility in how you pass on your wealth.
It would also be advisable to have;
- Investment knowledge, experience and skills
- The time to actively get involved in researching and managing your investments
- Commitment to keeping up with the rules and regulations
- A large enough super balance to make an SMSF cost effective and allow you to diversify your investments
- An understanding of the fact that SMSFs are treated differently in the case of fraud, compared with other super funds.
In our next article, we will look at how much super you would need for an SMSF to work for you and outline some of the risks associated. Make sure you subscribe to the blog so you don't miss an installment!
If you are thinking about creating an SMSF and need some advice on the best way to move forward, or if you already have one but would like to review it's effectiveness, call us on (07) 3396 8868.