A ‘self managed super fund’, also known as a DIY Super, is a way for employees and their employers to jointly contribute towards the employee’s pension. The money is invested in government bonds, shares or even property until the employee retires. Upon retirement, the employee can release the fund in one of three ways; either as regular payments, as a lump sum, or as a combination of the two.
The benefits to be had from a DIY Super include:
Low Taxation: Tax concessions are available for DIY Supers, which means that the government takes as little of your hard earned money as possible. This can amount to significant savings over the course of the fund.
Investment Choice: There is a wide range of investments to choose from and it is up to you which you invest in and how much you invest in each. Few other types of funds provide as choice as a DIY Super.
Control: By having a DIY Super, you have the flexibility to choose how and where your funds are invested and also the ability to adjust your investment strategy based on ever changing economic factors.
So, you are thinking about investing in this way? Then remember these important points…
– Every associate needs to be a trustee
– Trustees may not be paid for any duties carried out
– The responsibility that the fund complies with regulations is yours alone
– You must keep records of all transaction in the forms of receipts, statements and other paperwork for the duration of the fund
Research is key – you need to know who you will be opening the fund with, what will you be investing in, what exactly are the rules and regulations and which financial advisor you want to help you. If you remember all these point it will help you in the long run.