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Self-Managed Superannuation Funds (SMSF)

There are many people out there that want to control and manage their own superannuation fund; however, that would mean being responsible for the management of your retirement funds, something that will require a considerable amount of effort and time. It is a good option for those that have the right skills in legal and financial matters. If you’re planning on opening a SMSF account, you need to be able to understand the legal responsibilities that are tied to it, and even if you decide to employ a professional to help you, you will still be the one liable for any losses you might incur. Visit http://smsfselfmanagedsuperfund.com.au/ for more information.

SMSF investment

How do SMSFs work?

SMSFs are controlled and regulated by the ATO (Australian Taxation Office). They are legal tax structures that exist solely to provide for your retirement. It can have up to 4 members, and all the members are trustees. If one of the trustees is a corporate trustee, then he/she can also be a director. You need to be aware of the fact that running the SMSF is a complicated task.

You will be required to carry out all the duties of a trustee, which imposes heavy legal responsibilities on your shoulders. You will also have to follow a strategy of investment that you have come up with, ensuring that the fund meets the needs of your retirement. Additionally, you also need to get your annual audit approved by a SMSF auditor as well as keep up-to-date records of everything.

Requirements of running a SMSF

There are some things that will be required of you to ensure that the SMSF runs smoothly. You will need to create a budget for all the expenses, which will include taxes, professional accounting, financial and legal advice, and audit. Another important thing that you will have to have before you embark on opening the fund is a large sum of money, which will ensure that the budget that you have made will run smoothly.

You also need the necessary financial experience, without which, you will incur heavy losses. Aside from that, you will also need to have a lot of time in your hands to dedicate to such a fund, as well as to research your prospective investments. Finally, you will need a life insurance, one that covers permanent and total disability and provides income protection.

Where to invest

You can invest in various different places, such as collectibles, which include antiques, stamps, coins, wine, etc.; shares; and properties. If you choose to invest in collectibles, remember that the rules regarding such assets is very strict, and that you have to adhere to them.

Bottom line

Self-managed superannuation funds are great opportunities for those that want to take charge of their own savings. However, managing such a fund requires a lot of time, effort, and money, which is something that not everyone possesses. That is why SMSF is not always a good idea for everyone. Consult an expert before you open a fund as such, as there might be better alternatives for you.

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