So, you’re thinking of managing your own super, and doing DIY?
Well, you’re not alone as more and more Australians want to take control of their retirement future, and be in the driving seat and not behind it.
Like other super funds, SMSFs (Self Managed Super Fund) are a way of saving for your retirement. Generally, the main difference between an SMSF and other types of funds is that members of an SMSF are the trustees. This means the members of the SMSF run it for their own benefit.
Helping clients decide whether a SMSF is the right choice for them or not is what we do on a daily basis, and it is important for the clients to understand whether they have enough assets, the time, the skills and the knowledge to run their own super fund.
Running your own super fund sounds exciting and fun but it also means you have to roll your sleeves up, and devote your time to running it, and run it well.
Most clients need to be reminded that it is a major financial decision, so understanding the ins and outs of running your own super is a must before you can confidently make an informed decision.
Top 7 Motivators for a SMSF
There are some common motivators for deciding to start a SMSF, and here are some of those reasons.
One of the most compelling reasons as to why people enjoy running their own super fund is CONTROL. Most people want to be in the driver’s seat and take charge of their retirement future.
Most people who enjoy having control delight in having lots of choices. Choices over investment assets which range from the traditional ones like cash, term deposits, shares, managed funds, direct properties to non-traditional assets like collectibles and art.
If you’re in the driver’s seat, you are in control over what and how to invest and ultimately how to run your super fund cost effectively to suit your objectives and goals.
With control and choice over investment assets, most people enjoy the fact they can steer the performance of the fund returns to suit their investment strategies better than having it in a retail super fund where you have no control over the management.
Most super investments are considered to be tax-effective but within a SMSF there are other taxation strategies and structures available to enjoy additional taxation benefits that normal retail super investors don’t have access to.
Under a SMSF you may be able to access certain privileges such as the ability to borrow funds to do additional investing.
- Estate Planning
Other perks trustees enjoy is the ability to structure their super to allow member benefits to be paid to beneficiaries in the most tax effective manner.
Key Considerations of SMSFs
While SMSFs work for some people, they’re not a bed of roses for everyone. Educating clients on everything they need to consider and understand on what it actually means to be a trustee of a super fund is an important step I take to enable my clients to make informed decisions with confidence.
So, what is involved, and what do you need to consider?
Here is a short video from the Australian Taxation Office (ATO) on ‘What’s involved with an SMSF”?
Running your own super fund means you are responsible for it.
Do you have enough assets, time and skills to run your own fund?
Sometimes asking yourself questions can help you understand whether you are an ideal candidate to run your own super fund ‘on your own’.
- Am I a confident and a knowledgeable investor?
- Do I have enough super savings to make the fund viable?
- Do I have the appropriate skills to make good investment decisions?
- Am I aware of the requirements of being an SMSF trustee?
- Can I devote the time to manage my super fund appropriately?
- How do I formulate an investment strategy for my fund?
- How do I make investment choices?
- How do I effectively manage investment risks?
- Do I have the time to follow super laws and keep up to date?
- Getting the right professional advice
Just because you run your own super fund doesn’t mean you have to go solo.
Running your own super fund is exciting but it is a complex area, and it is not for the faint hearted.
Even though you are running your own super you can partner with a professional who specialises in the area of self-managed super funds.
A professional like a trusted SMSF Association Specialist Advisor™ (SSA™) can provide expert advice on how to best manage your super to maximise your retirement goals.
Only advisors with the SSA™ designation have undergone an independent accreditation program which not only tests knowledge of SMSF legislation and regulatory requirements, but also assesses professional business and ethical practices to ensure ‘best practice’ standards.
This is why we cannot stress the importance of partnering with a professional adviser with whom you can make informed decisions together.
How can a professional help you?
When considering an SMSF, they can advise on:
- Whether an SMSF is right for you
- How to structure your fund
- The necessary SMSF setup steps
- Your responsibilities and obligations
- Developing strategies to maximise your returns
When managing your SMSF, they can help:
- Develop SMSF strategies that will assist you in meeting your retirement goals
- Ensure that that you meet the rules and regulations of a complying SMSF
- Effectively manage your assets
Do you need to further assistance on your super situation? Our professional advisers can point you in the right direction.
For more help on reaching your superannuation goals, talk to a Dome Financial Adviser in Charlestown, Tamworth and Hunter Valley.
The information contained on this page is for discussion purposes only and is not intended to constitute financial product advice. It does not take into consideration any persons objectives, financial situation or needs. You should consider its appropriateness in light of your circumstances and consider seeking professional advice relevant to your individual before making a decision based on any information on this page.
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