Self Managed Super Fund
What is a Self-Managed Super Fund (SMSF)?
Like other superannuation funds, Self-Managed Super Funds (SMSF) is a way of saving for your retirement.
The difference between a Self-Managed Super Fund (SMSF) and other types of funds is that, generally,
the members of a Self Managed Super Fund SMSF are also the trustees.
This means the members of the Self-Managed Super Fund (SMSF) run it for their own benefit.
Self Managed Super Funds (SMSF) and you
While Self Managed Super Funds (SMSF) may sound like a good solution for some, it may not be suitable for everyone.
If you are considering a Self Managed Super Fund (SMSF), licensed financial advisors, tax agents
and accountants can also help you understand what is involved. If deciding Self Managed Super Fund (SMSF)
is appropriate for your super savings, ensure that the fund is set up and maintained correctly and eligible
for tax concessions.
Once your Self Managed Super fund (SMSF) is established, you as a trustee control the investment of the contributions
and fund earnings. You must also prepare and implement and investment strategy and ensure that it is being
There are rules and regulations that you must follow to ensure the fund’s assets are protected to provide benefits
in retirement.You should continually reassess the circumstances of the fund and each individual member to determine
whether a Self Managed Super Fund (SMSF) is still the most appropriate option for your retirement.
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You have complete control over the fund’s investments; however, you must develop and maintain an appropriate investment objective and strategy.
Having control of your fund means you’re able to invest in a range of assets including bank deposits, direct property, shares, managed funds and pooled investment trusts. You’re also able to switch or modify those investments as you see fit.
Generally, the cost of managing a Self-Managed Super Fund (SMSF) does not increase as your super investment grows. So the greater the account balance the more cost effective the Self Managed Super fund (SMSF) is.
The fund can provide tax concessions such as the deferral of lump sum tax in the pension phase. There are also opportunities to use credits from franked dividends to reduce the 15% tax rate for those in Accumulation phase. For those aged 60 and over, earning within pension phase are tax free.
Advantages for Small Business
Typically many small business owners are able to utilise super rules which permit Self Managed Super Fund (SMSF) to invest in business real property either directly or through non geared unit trusts or warrant trusts and lease back the property to a related party
All decisions and responsibilities associated with managing a Self Managed Super Fund (SMSF) rest with you as a trustee. In addition, all superannuation funds have to comply with certain rules and certain deadlines. As trustees, you’re responsible for making sure the Self Managed Super Fund (SMSF) meets all legislative requirements, so everything need’s to be kept up to date. You can be penalised for breaches of the legislation.
It Can Be Expensive
Depending on the types of investments in the fund or the administration and consulting assistance you receive, it may be expensive to maintain the fund.
Limited Ability to Diversify Investments
Although you are generally able to invest in a greater range of assets, you may not have sufficient money in the fund to diversify across them all. You also need to monitor the investment performance of the fund. You could simplify these tasks by investing in manage/pooled investments.
No Access to Superannuation Complaints Tribunal
As a member of a Self- Managed Super Fund (SMSF) you are not able to bring complaints or disputes to the Superannuation Complaints Tribunal. Instead you must have any matters heard by the Courts which may become expensive and result in delays.