If you’re ready to take control of your financial future, then a Self-Managed Super Fund (SMSF) should be on your radar. But whether a SMSF is right for you is a matter worth careful consideration.
First of all, what exactly is a SMSF?
A SMSF is a private superannuation fund that you manage yourself. SMSF’s have the same purpose as traditional industry, employer and retail funds – to provide benefits to its members upon retirement.
What are the main differences between SMSF’s and other Super funds?
- Where SMSF’s are regulated by the Australian Taxation Office, traditional funds are regulated by the Australian Prudential Regulation Authority (APRA), which pools members’ savings and invests the money for them;
- A SMSF is tailored to your specific requirements and individual needs. As a SMSF trustee, you decide how your fund is managed, and you control where your money is invested (with your financial planner’s help);
- A SMSF has massive flexibility in what it can invest in;
- As a SMSF trustee, you are ultimately responsible for managing the fund and complying with all relevant laws (with the help of your advisory team).
Who’s involved in creating and managing a SMSF?
- You, or you and your partner/ family members/ business partners, who are the trustees of the fund (the directors of the trustee company) – SMSF’s can have up to four members;
- Your Accountant, who ensures taxes are paid, the fund lodges its tax returns and has an annual audit; and
- Your Financial Planner, who initially assesses whether a SMSF is suitable for you, and if so, prepares a statement of advice, arranges rollovers, an investment strategy and ongoing financial advice.
What are your responsibilities as a SMSF trustee?
You must comply with:
- Superannuation and tax laws, including making sure the money is only used for retirement benefits;
- Record keeping obligations, such as lodging annual statements;
- Reporting obligations, including reporting contributions;
- Audit requirements, including having the fund audited by an approved SMSF auditor each year.
Although the compliance obligations of SMSF’s are an important consideration, contrary to popular belief a SMSF does NOT require hours and hours of management if you have a good team in place. Over a 12-month period you might spend a couple of hours total carrying out certain requirements that your Accountant and Financial Planner directs you to do.
Why would you consider a SMSF?
Having greater visibility over your retirement and investment savings leads to a deeper understanding of how your overall wealth is tracking. This gives you more confidence in your investment and lifestyle decisions, and ultimately more control over your financial future.
Whilst SMSF’s can be a fantastic option, it’s really important that you arm yourself with the necessary knowledge to make an informed decision about whether it’s the right path for you.
If you’d like to know more, come along to our free Self-Managed Super Funds Information Session at 6pm on Tuesday November 27. There are only 15 spots available, so make sure you call us on 9887 8751 or email us to register!