SELF-MANAGED SUPER FUND (SMSF)
Self-Managed Super Fund (SMSF) is one type of superannuation where the members have control over its management. This type of super differs from other super funds because all the members of the SMSF are also its trustees, or if the fund has a corporate trustee, all the members is a director of a corporation. Also, an SMSF can have anywhere from one to four members.
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Benefits of SMSF
Control
You have more control with SMSF. You make key decisions and you decide where to invest your money
Flexibility of choice
Since you control the investment strategy, you have more options to choose from. You can invest in direct shares or in properties. You can invest as cash or as term deposits
Cost
Since you control what services you want and the investments you like, you also decide how much you want to pay.
Tax savings
Depending on your personal circumstances as well as your investment strategies, you can potentially pay less tax
Contingency planning
You have options to safeguard your SMSF. You can set your beneficiaries who will receive your SMSF. You can also put an insurance premium on your SMSF so that your assets and your income are protected. Such insurance can include life insurance, income protection, and total and permanent disability (TPD)
Setting up an SMSF
Setting up your SMSF works differently from getting a super.
First, decide on your structure. You can be an individual trustee or a corporate trustee. This is important because this will influence the way you are going to manage your fund. Individual trustees can still have up to four members and each member is the trustee of the fund. On the other hand, every member is a director for the corporate trustee setup.
Second, have enough funds to set up and run the SMSF. And while the exact amount needed is not set in stone, having more is more cost-effective. Naturally, costs are involved. There’s the annual supervisory levy to the Australian Taxation Office (ATO). And then comes the cost of running it which involves budget for accounting, audit, consultations, insurance, and even legal fees. It is safe to say that the more complex you make your SMSF, the higher will the costs be.
Lastly, you need to have financial skills and investment strategies. You need to make the right investments decisions so you can generate returns. The investments can be shares, managed funds, direct properties, derivatives, unlisted shares, and collectables like artworks. You can also have consultants for this requirement.
The process of setting up your own SMSF starts with creating a trust deed and appointing the trustees. With that set, you will then need to work on ATO forms. The form will require your SMSF’s bank account so that should be set up as well. To get the best out of your SMSF and to make sure you are on the right track, contact the team at Brisbane Financial Advisor on 0731139997
Imagine the possibilities! Together we can create a bright financial future for you and your loved ones.