More Australians than ever are taking control with self managed super funds (SMSF's). Research released in March 2020 found there are
596,180 SMSF's in Australia with 1.119 million members. Those funds have assets estimated at 676 billion, or about 25% of the
$2.7 trillion invested in superannuation. ATO statistics show the biggest growth in SMSF's is in the 35-49 age bracket.
There’s lots of good reasons to start a SMSF, but how do you know if it’s right for you?
SMSF's are regulated by the Australian Taxation Office (ATO). There’s a range of laws around super and tax that you must comply with if you’re a trustee of a SMSF. This includes:
an Australian Business Number (ABN) and Tax File Number (TFN) for your fund
annual audit by an independent ASIC-approved auditor
annual lodgement of fund tax returns and set of financial accounts.
Are you shifting to a SMSF because you want direct involvement in how your money is being invested? An SMSF can invest across Australian and International shares, government bonds, term deposits, property and cash. If you’re going to make the investment decisions you need knowledge of the market – past, present and future forecasts – and a high level of financial literacy.
It’s a tough call to gamble with the most important savings account you’ll ever have. Only 20% of Australian retirees have a comfortable standard of living, so the super choices you make now are going to determine what your retirement lifestyle looks like. Age and financial position can play into the level of risk you’re willing to take with the investments made by your fund.
It’s also important that your financial goals match with the other members of your fund. You can go it alone in a solo SMSF or have up to 4 members (usually family). All of the members are trustees of the fund have equal legal responsibility for the fund being compliant and an equal say in investment decisions.
You don’t have to go it alone when you choose a SMSF – don’t mistake self-managed for do-it-yourself. Finding the right SMSF provider who can help you with set up, compliance and administration, and ongoing strategy and planning is crucial to building a high-performing fund. Remember to keep an eye on compliance as well as the long-term outlook so you’re making the most of your money.
Work with a qualified SMSF specialist advisor for peace of mind that your investment strategies are building a solid financial future.