SMSFs: Supercharge Your Superannuation!

Retirement is something that many of us look forward to – a time when our time will be ours to spend traveling, learning new skills, or spending quality time with family and friends.

In order to enjoy your life after work, you will need to have a superannuation portfolio that will provide you with a comfortable retirement – and SMSFs, or self-managed super funds, are a very popular type of retirement fund in Australia today. Is this the best type of superannuation fund for you? Here are our thoughts.

What is an SMSF?

SMSFs are different from traditional retirement funds in one important respect: the trustees of the fund (the people responsible for making investment decisions) usually invest their own money through the SMSF.

What are the benefits?

If you have a keen interest in investing, and would like full control over the exact investments that are included in your superannuation fund, an SMSF may be perfect for you.

Unlike traditional pension funds, you will be able to choose the stocks, bonds and other investments that the fund buys into – provided that these are in line with Australian superannuation fund regulations.

If your SMSF wishes to invest in property, it’s possible for the fund to apply for financing in its own name to invest in residential or business property. You won’t be able to live in this property yourself, but you could let it and use the rental as income for your fund.

What’s involved in running an SMSF?

If you have a maximum of 4 people who would like to manage their own retirement investments, setting up an SMSF may be a good option. However, you should keep a few things in mind:

• As an SMSF trustee, you will have to invest your money (and the money belonging to other trustees) in accordance with Australian law.
•  To ensure that the fund is being managed properly, an annual audit will be performed on your SMSF. If there are problems, you will have to correct them before the next audit.
• There are costs involved in setting up an SMSF, as well as investment costs every time you buy shares, property, or bonds on behalf of the fund.
• You will have to commit a fair bit of time to tracking the fund’s investments to ensure that it performs well. You may use the services of an investment professional, but you are ultimately responsible.

Is an SMSF right for you?

If you’re ready to take the plunge and manage your own investments, you will enjoy the challenge and responsibility that comes with running an SMSF.

Before you take an important decision like this, it’s best to get expert advice – and that’s where we come in.

Get in touch!