A self managed super fund (SMSF) is an increasingly popular vehicle used by people to fund their retirement. Greater investment flexibility and potentially less fees are just some of the advantages an SMSF can offer.
If you have amassed superannuation funds of at least $150,000 an SMSF can offer advantages to you over traditional superannuation funds.
Naturally, there are costs involved in setting up your SMSF as well as significant administrative and reporting responsibilities. If you set up an SMSF, you are the trustee. This means you are responsible for making investment decisions and complying with all laws. It’s therefore vital that you have the time and skills to capably undertake these responsibilities.
It can be reasonably complex, and we do recommend you seek professional advice to ensure your fund is correctly set up to make sure it’s eligible for tax concessions and can receive contributions. (Note that there are restrictions on contributions and these particularly relate to the age of your members and contribution caps that may apply.)
Other considerations include the need to establish a structure for your SMSF, develop a trust deed and appoint trustees.
Investments must be separate from the personal or business affairs of all members of the SMSF, and there can be no more than four members.
To gain all advantages available, it’s essential that the SMSF you establish complies with all ATO rules. Non complying funds can face substantial penalties and taxation consequences.
A Financial Planner can discuss with you whether or not an SMSF is the best choice for you for managing your super, and if so, help initiate the steps to get you underway. They can also put you in touch with other professionals who can assist you in ensuring your SMSF is correctly established and managed. Contact us today and we can refer you to a Financial Planner.