Are you looking for a different way to save for retirement?
A Self-Managed Super Fund (SMSF) may be something you should consider as a way to plan for retirement.
You can choose your own investments and manage your own super fund. This gives you more control over your future and allows you to make the most of your retirement savings.
What is a self-managed super fund (SMSF)?
A self-managed super fund (SMSF) is a type of superannuation fund where the members are also the trustees. This means that the members have control over the investment decisions made and are responsible for complying with the relevant legislation. SMSFs can be established by up to four trustees, who can either be individuals or corporate trustees.
The trustees must also be members of the fund. One of the benefits of an SMSF is that it offers flexibility in terms of investment options.
Trustees can choose to invest in a wide range of assets, including shares, property, and managed funds. This can provide greater control over the retirement savings and allow the fund to be tailored to individual needs.
Another advantage of an SMSF is that it may offer cost savings compared to larger superannuation funds. This is because SMSFs have lower administrative costs and can benefit from economies of scale. Ultimately, an SMSF can provide greater control and flexibility when it comes to retirement planning.
How do self-managed super funds (SMSFs) work?
- A self-managed super fund (SMSF) is a trust fund established for the purpose of providing retirement benefits for its members.
- It is managed by its members, who are also trustees of the fund. SMSFs are unique in that they allow individuals to have direct control over their retirement savings.
- As such, SMSFs are subject to stringent regulations designed to protect the interests of members.
- One of the key requirements of an SMSF is that it must have a compliant investment strategy.
- This means that the trustees must consider factors such as how the fund will generate income and how it will grow over time.
- Additionally, SMSFs must maintain detailed records and comply with reporting requirements. While this may seem like a lot of work, many people find managing their own super fund is a rewarding experience.
What are the benefits of self-managed super funds (SMSFs)?
Self-managed super funds have become increasingly popular in recent years and for good reason.
- SMSFs offer a number of benefits that traditional super funds simply can't match.
- SMSFs give you a high degree of control over your investments.
- With an SMSF, on the other hand, you have the final say over where your money is invested. This means that you can tailor your portfolio to your unique financial goals and risk tolerance.
- In addition, SMSFs typically charge lower fees than traditional funds. This is because you're not paying for expensive fund managers or other middlemen.
- As a result, more of your money stays in your pocket, where it can compound over time and grow into a sizeable nest egg.
SMSFs offer greater flexibility when it comes to withdrawals and benefits.
- This flexibility can be especially beneficial if you need to access your funds for unexpected expenses or opportunities.
- All things considered, it's no wonder that self-managed super funds have become such a popular choice for savvy investors.
Things to consider before setting up an SMSF
There are a few things to consider before setting up a self-managed super fund (SMSF). First, you need to be sure that you are able to meet the SMSF administration requirements.
This includes:
- maintaining records;
- preparing financial statements; and
- lodging tax returns.
You also need to have an understanding of investment strategies and SMSF fund rules. Additionally, you need to be comfortable making decisions about your own finances and investments.
If you’re not confident in your ability to meet these requirements, it would be best to seek professional advice. Another thing to consider is whether you have enough money to comfortably invest in an SMSF. This type of fund typically requires a larger initial investment than other types of super funds.
Finally, you need to be aware of the risks involved in investing in an SMSF. As with any investment, there is always the potential for loss.
Contact us today
Look to Horizon Bank to open a Self-Managed Super Fund Saver account. Get in touch with one of our friendly local team today.
Horizon Bank has a branch network spanning the NSW South Coast and Illawarra. Horizon Bank branch locations: Albion Park, Bega, Bermagui, Berry, Merimbula, Moruya, Nowra, Thirroul, Ulladulla & Wollongong.
Note: The article above is not financial advice. You should consider your own financial circumstances. Before acquiring the financial product, you should consider whether or not the product is appropriate for you. You may wish to seek financial advice from a professional financial adviser. A Product Disclosure Statement (PDS) is available from any Horizon branch. You should consider the relevant PDS in deciding whether to buy or hold the products.
