Is a SMSF right for me?

Running your own super fund offers control of how your nest egg is invested. But there are strict rules to follow, and this is an area where good advice is essential.

We thought we would take the opportunity to explore how a SMSF works to help you decide whether it may be suitable for your situation.

How do SMSFs work?

In many respects, SMSFs work in much the same way as regular super funds. During your working life you and your employer make contributions to the fund. The money is invested so that over time you build a decent pool of savings for retirement.

Who can start a self-managed fund?

Just about anyone can establish a SMSF though there is a limit of up to four members per fund. There are various costs associated with setting up and running a SMSF so you’ll need sufficient money to make a SMSF worthwhile.

Valuable tax savings

SMSFs benefit from generous tax concessions. Contributions to the fund plus the returns on the fund’s investments are all lightly taxed so more of your money goes to work for your retirement.

A flexible choice of investments

The beauty of a SMSF is that you have complete control over how your retirement savings are invested – within legal guidelines. It’s important to hold a mix of investments, and this can include term deposits, shares, property and other assets. You’ll need a written plan that shows how the fund is investing for the benefit of its members.

A SMSF helps you save for retirement

One of the key rules of SMSFs is that the fund can only be used to invest for retirement.

Strict rules apply

SMSFs must be run within strict guidelines. As each member of a SMSF is also a trustee, you are responsible for meeting those rules, and if you’re considering a SMSF it’s essential to be aware of what’s involved.

For further information or if you would like to explore Self-Managed Super Funds as an option for your wealth creation, please contact us on (07) 3147 8730. 

Posted in: Financial planning

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