Setting up a Trust Deed
A trust deed is one of the unique features of a self managed superannuation fund. This trust deed is a crucial document that sets out the guidelines a SMSF must comply with, which ensures that the fund is never misused. In addition, the deed must comply with the laws that are setup by superannuation laws in general.
This deed outlines the members and trustees, the voting rights, when the fund was started, benefits in case of death, the kinds of pensions that can be paid and the allocation of the funds, especially for investments.
Creating a SMSF Investment Strategy
With a self managed super fund, you can also develop an investment strategy that is tailored to your particular needs. However, you will have to do so in accordance to the guidelines that have been set up for superannuation funds. By law, the trustee or trustees of the account must develop an initial investment strategy.
This can be altered over time to reflect the economy and the wishes of the trustee, as long as it benefits the SMSF. Once this strategy has been established, it is the duty of the trustee to carry out the plan. This strategy is basically designed to benefit the members so that they are financially stable when the time comes to retire.
Contributions to a SMSF
As a SMSF holder, you can have contributions made to your account from parties other than your employer. These include payments into your super from the government which can match the amount that you contribute to your account (if you meet their criteria). Your spouse can contribute to your SMSF and you can use salary sacrifice to get a better tax rate on your regular salary while also contributing to your super fund.
There are limitations that you should be aware of, such as contribution caps. If you do happen to exceed the cap, then you may be taxed or penalised. To avoid this, it is essential that you discuss these contribution limits with your financial advisor.
If you want to control your retirement finances in a way that is more tailored than a super fund manager’s decisions, then a self managed super fund may be right for you. Just keep in mind that you will have to commit to spending time researching the market regularly and maintaining the SMSF’s records in detail.