However, if you have the start up funds, then you could be in a great position to start taking control of your nest egg. Also, you should be aware of the fact that there are yearly fees for managing your account which can be anywhere from $1000 to $2000 per year.
Setting up a self managed superannuation fund means that you are completely responsible for all the investment choices made. You must have the time, skill, and desire to manage your retirement fund. If you don’t have these three characteristics, it may be better to have someone else manage your superannuation.
Nonetheless, if you are looking for more control over your investments and the strategy of running your retirement fund, then you may want to take on the task of running your own SMSF. You will also be able to invest in more assets that you may have not normally been able to do. It’s also important not to forget that these investments are for your retirement and therefore not accessible as such, until that time comes.
In order to establish your self managed superannuation fund you must do the following four things:
• Create the trust – In order to open up your SMSF, you need to write up a trust deed. This document will establish all of the fine details of the account, such as whom the trustees are, who the members are, how trustees can be appointed, what their duties and powers are and the contributions and the benefits of such payments. As the trustee, you will have to carry out the requirements outlined in the trust deed.
• Choose to be a regulated fund and then obtain a tax file number and an Australian Business Number (‘ABN’) – Once you have set up the trust deed, you must then submit a form which will give you your tax file number and ABN. You then need to elect to have a regulated fund which cannot be revoked.
• Design a strategy for your investments – The investment strategy then must be devised which will have to take into consideration the allocation of the funds, diversification, cash flow, liquidity, account risk and returns.
• Open a bank account for the SMSF money to be held in.