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Is DIY super right for you?

Your super is your money for retirement so it makes sense to want control over it. But be sure a self-managed super fund is right for you before taking the plunge to a DIY nest egg.

The growth of self-managed superannuation funds (SMSFs) is nothing short of remarkable. More than 1 million Australians currently manage their super savings through over 550,000 SMSFs. In the last 12 months alone, an additional 25,000 SMSFs were established 1.

Not such complete control

For many investors the idea of having complete control of their super is a key driver for setting up a SMSF. However that level of flexibility is tempered by strict rules governing what SMSFs can – and cannot – invest in.

Importantly, each member of a SMSF is also a trustee, and that brings responsibilities. If a SMSF breaks the rules, any penalties can be directed at fund members not the fund itself, and that has seen some SMSF members pay penalties running into tens of thousands of dollars from their own pocket.

Now that’s not to say the idea of a SMSF should be swept aside. On the contrary, many Australians find it both personally and financially rewarding to run their own super fund. But it’s not a decision to be taken lightly.

Consider all aspects

Managing your retirement nest egg is very different from knocking up a DIY patio. It calls for investment know-how, the time and desire to fully understand your SMSF and your role/responsibilities as the trustee of the fund, and unless you have sufficient funds to invest, you could find the costs of running a SMSF eat into precious investment returns. Estate planning and insurance are also very important considerations with an SMSF.

Every situation is different, so contact us to discover whether a self-managed super fund is the best way for you to grow a retirement nest egg.


Talk to your local financial adviser today

1 ATO Self-managed super fund statistical report - March 2015 at https://www.ato.

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