Smarter Finances can help you weigh up the pros and cons of running an SMSF and help you decide whether it’s right for you.
If you decide to set up an SMSF you are personally liable for all the decisions made by the fund even if you get help from a professional or another member makes the decision.
What is SMSF?
An SMSF is a private superannuation fund, regulated by the Australian Taxation Office (ATO), that you manage yourself. SMSFs can have up to four members. All members must be trustees (or directors if there is a corporate trustee) and are responsible for decisions made about the fund and for complying with relevant laws.
How do SMSF’s Work?
SMSFs are a legal tax structure with the sole purpose of providing for your retirement. They operate under similar rules and restrictions as ordinary super funds. Set up costs and annual running expenses can be high so you’ll need a large balance to make the fund cost effective.
When you run your own SMSF you must:
- Carry out the role of trustee or director, which imposes important legal obligations on you
- Set and follow an investment strategy that ensures the fund is likely to meet your retirement needs
- Have the financial experience and skills to make sound investment decisions
- Have enough time to research investments and manage the fund
- Budget for ongoing expenses such as professional accounting, tax, audit, legal and financial advice
- Keep comprehensive records and arrange an annual audit by an approved SMSF auditor
- Organise insurance, including income protection and total and permanent disability cover
- Use the money only to provide retirement benefits
The type of ongoing advice you get will depend on your needs. Call Smarter Finances now to discuss your requirements.