Self-managed super funds (SMSF) can be a great way to control your own nest egg and to provide for your retirement home Campbelltown. The appeal of these ‘DIY’ funds is that it lets you be in control and be responsible for your own super investment needs; allowing you to set, plan, and follow a specific investment strategy to ensure the best outcomes for your personal retirement plans.
SMSF are particularly beneficial to those with an already knowledgeable financial or investment understanding, and those who are high net investors, or if you are a small business owner who can utilise SMSF to gain control, flexibility, and the tax advantages of a SMSF setup.
Self-managed super funds are not for everyone, however. Firstly, for an SMSF setup to be worthwhile, one must already have a substantial nest egg. Unless you have the funds necessary to invest in an SMSF setup, you could risk losing more money than you invest depending on the annual costs associated with running your own SMSF.
SMSFs work the same way as other professionally managed funds, whereby the central purpose is an investment setup designed to build money for your retirement. The only difference is that SMSFs require your complete control over the responsibilities involved in maintaining your super fund, and to be responsible for keeping up to date with all funds, costs, and deadlines involved with a SMSF.
Running your own super fund may give you flexibility and control, but of course, such as anything, added control means added responsibility. One of the key components of a SMSF is that, unlike other types of superannuation funds, the members of the SMSF are also the trustees, and are responsible for meeting the tax or legal matters involved with superannuation funds. An SMSF setup requires up to four members – or trustees – to take care of and invest the funds for the benefit of each member. Therefore it requires a lot of delegation and communication to ensure the active running of your SMSF.
Another issue to weigh-in when considering a SMSF setup is the need to keep your super assets separate to your personal assets. This may seem logical; however the rule regarding this can be slightly unclear. It is important to realise that the money in your SMSF is – to an extent – yours, but not just yet. In other words, a SMSF does not operate like your own personal bank account, and any assets invested should remain there in order to provide the trustee with a good nest egg for after they retire.
Self-managed super funds are not for everyone, and it is important to weigh both the advantages and disadvantages when contemplating your own SMSF setup find something that provide the highest quality of service. It is important to consider your options and to seek professional advice before deciding to take on the responsibility of controlling your own superannuation fund.