What is a Self Managed Super Fund in Australia?

May 14, 2018

Superannuations are funds that set you up for retirement. Recent times have seen more and more people considering the idea of a self-managed super fund. A SMSF is simply a private kind of fund, regulated by the Australian Taxation Office (ATO), that you have completely control over – hence the title.

The benefits that come with a SMSF are extensive, and most people choose them as a means to manage their own funds and make their own financial decisions. There can be up to four trustees on a SMSF, and they’re generally recommended for people with extensive financial knowledge and a large balance to hold.

Running a SMSF can be costly, as the set up and annual running costs can be quite high, so if you’re interested in running your own SMSF, it’s recommended that you speak to an expert in the field before identifying whether it’s a realistic financial move for you.

Things to Know About SMSFs

SMSFs provide trustees with complete flexibility and control. In particular, trustees have control over their investment decisions, allowing them to invest in a range of investment types, including domestic and commercial properties, cryptocurrencies, businesses, shares, non-traditional assets and more.

Although you’ll have control over the management of your funds with a SMSF, you’re still required to follow some rules and restrictions in order to protect your money. SMSFs exist to help you out financially in your retirement, so detailed reports and audits should be arranged to ensure everything is being managed correctly.

When you run a SMSF, you should have frequent contact with a financial professional. In particular, you should contact a professional in the early stages of setting up the fund. During this time, you will need to choose your trustees, set up a bank account, and prepare an exit strategy. An exit strategy is necessary with SMSFs in case a fund becomes too difficult to manage as a result of diverse unexpected events.

Considering a SMSF? Speak to Gavin Ma & Co today to find out it’s your best move.