If it is the latter and you believe that you can do a better job with your finances or you want more control over your retirement fund, then having your own self managed superannuation fund (‘SMSF’) is a great option.
Self managed super funds are becoming very popular. Basically, this is superannuation that you set up yourself and named the trustee of, meaning you can execute all the decisions, manage the investments made and comply with the laws that protect and govern these funds.
Four members can be enlisted in an SMSF, so your family can be named and covered. There are some factors to consider, such as the following:
• You must have at least $200,000 in your super already. If you do not, there really is no benefit from managing your super.
• You must be excellent at keeping track of your fund and staying in compliance with all of the rules. Everything you do, all of the decisions that you make, will be tracked by the ATO, so you must make sure that your records are kept in order. If not, this could cause problems later in time for your self managed superannuation fund.
• You must have the time to research your decisions, watch the market and generally manage the fund.
• Unlike leaving the investment choices up to a super fund manager, an SMSF requires constant attention from the trustee.
There are numerous super fund managers that have been doing a poor job of running many people’s nest eggs. Of course, a lot of work is required when it comes to managing these funds, so sometimes investment choices can be hastily made. If you have the right people behind you (accountants, financial advisors, etc) and experience with super funds, then you may be much better at managing your superannuation.
Plus, you will be able to make decisions that are personal and that you truly believe in. You can choose exactly how you want your funds invested and the type of investment strategies that you wish to follow. In the initial stages, though, you may want to regularly consult with your financial advisor as to what you are thinking of investing in to gain their thoughts and feedback.
You can receive higher returns by self managing your super fund, but this also means taking larger risks and being completely responsible for your retirement.