Are You Prepared To Be In Charge Of Your Super?
Having your own Self-Managed Super Fund (SMSF) gives you a great deal of control and flexibility over your investments and tax strategies. But it also comes with a great deal of responsibility. So if you’re thinking of setting up your own SMSF, it’s worth doing your homework before jumping in.
Managing your own super
If you’re the type of person who takes a keen interest in your finances outside of super, then you probably find the idea of managing your own super very appealing. After all, superannuation is probably going to be one of the biggest investments you will ever have in your life. But before deciding to manage your own super it’s important to know exactly what you’re getting yourself in for.
The pros and cons of self-managed super
A self-managed super fund, like all superannuation funds, is designed to save money for retirement. But unlike other superannuation funds, it has fewer than five members and these members act as trustees of the fund.
Being a trustee involves taking full legal responsibility for all decisions made in the SMSF. This is probably the biggest disadvantage of running a SMSF. Superannuation laws are complex and change regularly. So even though you can get help with compliance and administration from external providers, you will still be legally responsible for your SMSF if something goes wrong. So what are the benefits of taking on all of this personal responsibility?
The main advantages of self-managed super are:
- You have a greater range of investment choice: you have the ability to invest in a range of investments including direct assets (such as property), and non-traditional assets, such as
(business real property).
- It can be more tax efficient: you may be able to time the purchase and disposal of your assets to minimise any capital gains tax liabilities.
Self Managed Superannuation Funds (SMSFs) continue to be the fastest growing sector of the Australian super industry. Over the last 4 years, the number of SMSFs has grown by almost one third (27%) . SMSFs are popular for many reasons, none more so than their practical utility. If you would like to learn more about SMSFs and whether this is strategy suited to your aspirations, please contact us to arrange a time to discuss.