Self managed super funds are regulated and controlled by Australian Taxation office, and this self managed goals have the same goals of collecting, and investing your life long contributions to secure your retirement. The major difference between this and other funds is that you are also a trustee of this fund and it is dependent majorly on you to control how and when to invest your contributions and also when and how to pay your benefits. A self managed super fund can have maximum up to four members, and they play a crucial role in your goal. They are most likely to be your close friends or business associates.
There are many common misconceptions associated with self managed super funds such as possessing the super fund with lower fees or the one with the best performance is enough to contribute towards your retirement security. Many a times, we have also seen the commercials which suggest that a lower administration fee is crucial to secure your retirement income. However, the global economy meltdown and financial crisis have made many people disillusioned with the losses they suffered from handling over their superannuation funds to experts.
While running you need to understand that you are working along with the Australian tax office. All the trustees of SMSF have to sign an agreement stating that you understand all the obligations. You also need to know all the legal requirements and administrative responsibilities as a trustee of this fund. Establish your own investment policy and work out to make your goal established. If you have members in your fund, you need to make sure that your investments are compatible with the goals of your members.
All funds need to be audited independently annually. The funds overall compliance with the rules and financial audit must be included in the audit. It is although, extremely vital to have excellent relations with an accountant who has acquaintance of self managed super funds to provide you correct support and guidance to ensure your fund is in the complaint with the rules. Although, there are many advantages that come along with the SMSF over retail and industry super funds.
First is SMSF leveraging as many people nowadays are shifting massively from the managed funds. Many more people are now considering alternative retirement options as their preferred self managed super funds such as owning property and owning shares.
Secondly Retail funds and industry funds both have set up their funds with the market and profit purpose where you get limited option, and you also need to invest your whole own cash to fund your investments, which limits the potential of the growth of your super funds.
Legislation and administrative shifts have allowed borrowing money internally to fund your investments that means you can now grow faster by using someone else’s money. In this way, you can have a wider range of options such as direct property, shares, specialist property trust and even more investments options that may not be possible with the small account.
It also provides you countless tax advantages, and it is your excellent retirement vehicle. Remember, self managed super funds are the second most valuable asset after your home. Hence, taking more responsibility of it is mandatory as it ensures your future income safety and lavish lifestyle after your retirement age. Recent legislative changes have made self managed super funds ever easier to manage than the past. Your self managed super funds goal is to secure your retirement income, and it depends on you how strategically you secure your valuable asset.