A self-managed super fund (SMSF) is exactly that – where your superannuation is managed by yourself.
What makes an SMSF different to other types of superfunds is that the members are often themselves the trustees. This means they run it for their own benefit, while complying with Australian superannuation and taxation laws, of course.
When properly planned and implemented, an SMSF is a strategic way to grow and benefit from savings when entering and experiencing retirement.
Crest Wealth are a Gold Coast financial planning team here to inform, so you can make the right financial decisions for your future. Read on to find out if an SMSF is right for you.
The benefits of an SMSF
An SMSF holds a number of attractive advantages in comparison to standard retail or industry super fund.
What are they?
Enhanced control over where and how your money is invested
The trustees choose the investment strategy, what assets it will invest in and how they will be invested.
Subject to certain restrictions, the SMSF can access investments not always available through other super fund types.
Flexibility
With trustee control comes SMSF flexibility. There is potentially great flexibility that might come with running your own SMSF in comparison to investing in other funds. It is important to note however that this is not always the case and there may be other more suitable options out there that can achieve the same results.
Possible cost savings
Dependant on the investment values and the trustee’s own circumstances, an SMSF may enjoy cost savings. How? Fees associated with an SMSF are largely fixed, the more the SMSF grows, the more cost-effective it will become.
Seek financial advice from a Gold Coast financial planner to discover if an SMSF if right for you.
SMSF statistics in Australia
According to the Australian Taxation Office (ATO) data, there exist close to 600,000 operating SMSFs, with thousands more being established every quarter.
As at year ended June 21 SMSFs had around $790 billion net assets invested in Australian and overseas markets.
The median investment balance per member for the year ended June 20 sits at around $414k. Median assets per SMSF for the same year was around $733k.
Is an SMSF right for you? A checklist to find out
An SMSF isn’t the right super fund strategy for everybody. Ask yourself the following questions before establishing one.
Have you looked into other DIY super options?
Exchange traded funds, shares and term deposits are possible with other, professionally managed super funds. This lets you have a degree of control, without the legal and administrative responsibilities of an SMSF.
What about other super funds or investment options?
Just because you’re unhappy with your current super fund, doesn’t mean an SMSF is right for you. Why not investigate changing to another fund or investment option first?
Have you considered the costs associated with running a SMSF?
They may be much higher than what you’re paying for your current super fund, particularly if your fund balance is at the lower end of the scale.
Are you well-informed and ready to take on the responsibilities of a SMSF?
Do you know the legal obligations and tax implications, are you well-versed in the different investment markets and can you manage a diversified investment portfolio?
An SMSF takes time, effort and a whole lot of know-how.
If you’re not sure if an SMSF is right for you, financial planning on the Gold Coast is what you need to seek out to empower you to implement strategies for a financially sound future.
Need financial advice you can count on for today, tomorrow and your retirement?
Contact Crest Wealth today for financial planning on the Gold Coast that you can trust.
Disclaimer: The information contained in this news post is general in nature and is intended to provide a general summary only and should not be relied on as a substitute for professional advice.
