If you're an Australian who's looking to start or grow your retirement savings, then a Self-Managed Super Fund (SMSF) may be the right choice for you. SMSFs are a type of superannuation fund that gives you more control over your investments and how your money is used to fund your retirement.
However, SMSFs are not for everyone, and there are a few things to consider before setting one up. This article will give an intro to SMSFs and help you decide if they're the right choice for you. Continue reading to learn more.
Defining an SMSF
An SMSF is a trust structure that allows you to control your own superannuation funds and make investment decisions on how your money is used. SMSFs are used to invest in assets for the purpose of providing retirement benefits for the members of the fund. They are regulated by the Australian Taxation Office (ATO), so it's ideal to have professional insight into their management.
Understanding the Perks of an SMSF
There are many benefits to having an SMSF, including the ability to have more control over your investment decisions, the potential to save on fees, and the ability to tailor your investment strategy to your specific needs. Let's dive into these perks:
Cost Effectiveness. An SMSF can be a cost-effective way to manage your retirement savings, as you have the ability to choose your own investments and are not subject to the fees associated with traditionally managed funds.
Estate Planning Effectiveness. An SMSF can also be an effective way to manage your estate, as you can control how your assets are distributed upon your death. This can be particularly beneficial if you have complex financial affairs or want to ensure that your assets go to your loved ones.
Independence in Maintaining Accounts. An SMSF provides you with more freedom in maintaining your accounts. There's little to no need to rely on a financial institution to manage your money, which can provide you with some proper peace of mind and allow you to monitor your finances better.
Preparing for Getting an SMSF
When it comes to setting up and managing a self-managed super fund (SMSF), there are a few key things you need to keep in mind. Let's get into some key points to keep in mind.
Structure the SMSF and Trustees. Firstly, you need to decide on the structure of your SMSF and who the trustees will be. Understand the legal implications of this decision, as the trustees will be responsible for managing the fund and making sure it complies with the law.
Create an Investment and Insurance Strat. Next, you need to create an investment and insurance strategy for your SMSF. This will involve deciding how you're going to invest the fund's money and what kind of insurance cover you need to protect the members of the fund.
Connect with a Consultant. An important step in preparing for your SMSF is to connect with a consultant who can help you with the process. A consultant can provide you with expert advice on the best way to set up your SMSF and can also help you with the paperwork requirements.
Once you attain a clear understanding of the SMSF setup process, you can begin to connect with the right professionals to get started. While it can be rather complex, an SMSF can be a great way to take control of one's retirement savings.
Looking for a financial consultant on the Gold Coast? Swell Financial Planning in Australia offers financial services regarding investment, insurance, budgeting, cash flow, and more. Get in touch with us today!