If you are looking for greater control over your super, than perhaps a self-managed super fund is right for you
So, what are the benefits of managing your own super fund and is this the best approach for you? Self-managed super funds (SMSFs) allow up to four family members or business partners to pool their money to make investment decisions.
Each member must be a trustee and take responsibility to ensure the fund is managed appropriately. To decide whether a SMSF is a good idea for you, you need to weigh up the benefits and resulting costs.
The main benefits of a SMSF are control and choice.
As a trustee you have total control over investment strategies and your money. You also have greater choice in regards to the investment opportunities and the flexibility surrounding your fund.
By pooling your super with family members or business partners in a SMSF you may be able to save money to invest more quickly, potentially reaching your investment goals sooner.
Although SMSFs allow for greater control of your money, there are extra costs associated with this kind of super fund. As a trustee you will have added responsibilities and legal obligations that are avoided when you have someone else managing your super fund.
You will need to weigh up the costs of having your fund professionally audited each year, plus ongoing administration costs. You should consider whether the benefits outweigh these additional costs.
Most financial experts suggest that to make the most of your super fund you should have at least $200,000 in savings and some financial experience. It would also be beneficial to consult a SMSF specialist before making any decisions.
If you are thinking about setting up a SMSF because you are dissatisfied with your current super fund, it may be wise to consider switching funds prior to setting up your own.
You should consider fees, investment options, extra benefits and insurance options. Be sure to factor in your superannuation goals and retirement plans when making any investment decisions.
Your superannuation is an important investment, which will hopefully ensure you have a comfortable standard of living once you retire.
To ensure you have the best suited retirement plan you should seek professional advice.