Self-managing your superannuation gives you greater control over your funds, but it also comes with a lot of responsibility. A professional tax accountant in Crows Nest may be able to help you decide whether a self-managed super fund is right for you and provide you with ongoing advice and services to support you along your journey.
However, it is important that you understand that even if you use the services of a professional, you are the person ultimately responsible for your legal responsibilities, funds and investments.
Self-managed super funds explained
Self-managed super funds are private superannuation funds which are managed by you. They are overseen by the Australian Taxation Office (ATO). A self-managed super fund may include up to four members, who must all be trustees. These members are liable for any decisions made and for ensuring that any relevant laws are upheld.
It is recommended that you only choose this form of super fund if you have a strong knowledge of financial and legal matters, as it is not easy to manage it yourself, even with the help of SMSF accountants. Due to the large amount of time and work maintaining it entails, it is recommended for those with a large balance.
Some of the benefits of self-managed super funds may include:
While a self-managed super fund does involve initial start-up costs, running costs, ATO fees and potentially costs for hiring SMSF accountants, with a large enough balance you may find that over time, if managed smartly, that these expenses pay off in the long run.
The ability to choose your own tax strategies and investment decisions enables you to make quick responses to market changes and personal circumstances that may occur over time. You may choose to invest in shares, property or even cryptocurrencies.
The transparency that comes with a self-managed super fund is arguably one of its biggest benefits. Members can align their goals and values (e.g. sustainability/ethics) with their investment choices, and have full visibility over performance and taxation.
Consolidation of assets
The ability for a trustee to combine their super assets with other members of their self-managed super fund (these members may include a partner or family member) allows for the creation of a greater fund balance. Having a greater fund balance coupled with one set of fees can potentially boost asset and investment opportunities.
It is crucial that these benefits are weighed against the potential risks, including:
- Investment returns being lower than anticipated
- Impact of costs and time commitments on retirement lifestyle
- Loss of benefits such as discounted life insurance
- Relationship breakdown, health issue or death of another member affecting the fund’s success
- Effects of memory loss and dementia on managing the fund; and
There are resources available online which can help you make an informed decision as to whether or not a self-managed super fund is right for you.
What SMSF accountants can help with
Licenced SMSF accountants are a good place to start when deciding whether to start up a self-managed super fund. They are experienced at providing advice and assisting with administration and investment procedures. You may choose to enlist their services on a long-term basis for ongoing advice and support. It is important to remember that the self-managed super fund is your responsibility, not SMSF accountants’, and that you need to understand what your adviser says and does.
SMSF accountants can provide self-managed super fund assistance to trustees. It is important to understand and be willing to commit to the large amount of responsibilities involved in establishing and maintaining such a fund.