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Is SMSF Right for me?

Self-managed superfunds are the fastest growing sector in the superannuation industry and account for approximately 29% of all superannuation savings. But this doesn't mean that it is automatically the right choice for your retirement savings. You need to understand what is involved in the establishment and ongoing management of your fund and what your responsibilities are.

Individuals who are switching to SMSFs decide to gain control over their investments and savings rather than let fund managers make all the investment decisions for them. This therefore means they take over the obligations of managing their own superfund in compliance with the law, requiring commitment and time.

There are strict rules to follow as a member of an SMSF and it is important when choosing the investment that you think will best suit the needs of your SMSF fund, that these rules are adhered to. Your fund should provide long term retirement benefits. You should understand your obligations as a Trustee, otherwise you may be penalised and you might lose some of your savings if you do not comply with the rules.

The sole purpose of your SMSF being established is for the fund to provide long term retirement benefits to its members and their beneficiaries and as complex as running your own fund it can be extremely rewarding.

What is a SMSF?

A SMSF is one of a number of superannuation funds available in which a person may accrue their retirement savings and receive retirement benefits.

A SMSF as the name suggests is a private superannuation fund where the members of the fund administer the fund.

The other features of a SMSF are:

  • The members of the fund are also trustees of the fund either individually or as directors of the trustee company.
  • The members/trustees are responsible for making decision about the fund.
  • Regulated by the Australian Taxation Office.
  • Must have fewer than 5 members.
  • A Trust Deed must be established and it must contain all the relevant requirements.
  • Trustees can not be paid for their services as trustees.
  • All SMSF's have their own TFN and ABN and bank account to receive contributions and rollovers, make investments and pay out pensions.

Why would I set up a SMSF?

The benefits are:

  • Investment control - As a trustee of the fund, you are in control of where the SMSF invests. You choose your own investment goals.
  • Flexibility - You set and implement the investment strategy and choose the types of investments the fund invests in. This may include property, shares or others.
  • Estate Planning - Helps with effective estate planning including the bypass of your estate.
  • Asset Protection - Gives you greater protection from creditors.
  • Tax Efficiency - Gives you access to a reduced taxed structure without losing control.

Are there any risks to setting up a SMSF?

In setting up a SMSF, there are a number of things that need to be taken into consideration, these include:

  • Responsibilities - All decisions and responsibilities associated with the running of the SMSF are the responsibilities of the trustees.
  • Compliance and Administration - Need to ensure the fund is complying and lodges an annual tax return each year.
  • Running Costs - For smaller amounts, these may be higher than retail superfunds.

Disclaimer

This document provides general information only. Before making an investment decision, you need to consider (with or witout the assistance of an adviser) whether this information is appropriate to your needs, objecties and circumstances.

For more resources, you can go to our Library page.

Make the Move

The first step, once you have decided that a self managed superannuation fund does suit your needs is to please complete our SMSF establishment form and email it back to admin@austsmsfsolutions.com. If you want to speak to a SMSF adviser to assess your superannuation options and receive personalised advice, call us on (02) 6056 3600.

Download Establishment Form