Considering a Self-Managed Super Fund (SMSF)?
A Self-managed super fund or more commonly called SMSF is as the name suggests, a Superannuation fund that is self-managed by the members of the fund.
The fund can have up to 6 members and is able to invest in the following investments:
- Managed funds
- Commercial property
- Residential property
- Exchange-traded funds (ETF’s)
- Term deposits
- Cash
- Collectibles
Advantages of a Self-Managed Super Fund
- Complete control over where you want to invest your money
- The degree of flexibility where you can invest. You can choose from assets including, bonds, shares, commercial or residential, and collectibles, among other things.
- SMSF money benefits those who survive you.
- There are tax concessions to be had. The deferral of capital gains tax in the pension phase.
- Self-managed super funds can run simultaneously in the pension phase and the accumulation phase.
Disadvantages of a Self-Managed Super Fund
- The annual fee structure and consultancy charges pertaining to SMSF management can make it more costly to run when compared to your retail or industry fund.
- Being outside prudential regulations, you do not have access to the Superannuation Complaints Tribunal.
- The management of affairs lies with you and the other trustees, so you have to be completely up to date with the legislative and legal changes & the penalties for non-compliance.
- Risk of poor diversification e.g., if they are established specifically to buy a single asset such as residential property.
- Risk of losing interest. Funds may not have performed to your expectations.
Need More Information?
If you are considering a self-managed super fund for your retirement, don’t hesitate to get in touch if you have any questions.