Like other superannuation (super) funds, self-managed super funds (or SMSF’s) are a way of saving for your retirement. The difference between an SMSF and other types of super funds is that, generally, the members of an SMSF are also the trustees. This means the members of the SMSF run the fund for their own benefit. As such, an SMSF is a form of super fund that offers members the opportunity to take control of their retirement savings and manage the day-to-day decisions and obligations associated with running a super fund themselves.
Some people prefer the hands-on control that an SMSF offers. However, with this added control comes both additional responsibilities and a greater workload. Clients need to be prepared for the need to research their investment options and track the performance of the fund on a regular basis to ensure investment decisions meet the needs and objectives of the fund’s members. In addition, there is the need to ensure that the fund meets all the obligations under the very strict rules regulated by the Australian Taxation Office (ATO).
A key feature of an SMSF is the ability to borrow. An SMSF can borrow to invest in a variety of investments such as commercial or residential investment properties or shares. However, there are a number of restrictions that apply.
An SMSF may not be right for everyone. When assessing the merits of establishing an SMSF you should consider both the advantages, costs and responsibilities associated with being a trustee of an SMSF.
Coastal Financial & Insurance Services can work with your accountant and is able to assist you with:
- Determining whether or not an SMSF is right for you
- The establishment of an SMSF
- Preparing and updating the SMSF’s investment strategy
- Advice regarding the investment of the SMSF’s assets
- Advice regarding personal insurances for the members of the SMSF