Is An SMSF the Right Move to Secure a Healthy Nest Egg?

Is An SMSF the Right Move to Secure a Healthy Nest Egg?

There’s no better time to start thinking and planning for retirement, than now! Self managed super funds are a very popular type of retirement fund in Australia today, so we’ve unpacked everything you need to know.

What is an SMSF?

SMSFs differ from traditional retirement funds in one important respect: the trustees of the fund (the people responsible for making investment decisions) usually invest their own money through the SMSF.

What are the benefits?

If you’re looking for full control over the exact investments that are included in your superannuation fund and have a keen interest in investing, an SMSF may be perfect for you.

Unlike traditional pension funds, the SMSFs investments can be tailored to your specific needs before and after retirement with the added flexibility to make changes quickly and easily. Subject to current superannuation laws, the SMSF has an unlimited life span and may continue to provide benefits into the future for members and their dependents.

Depending on your circumstances and the value of your investments, a SMSF may provide cost savings compared with other types of superannuation funds.

SMSFs also give you the ability to combine your resources with up to three other members (such as partners or family members). Consolidating super accounts immediately creates a larger fund balance, which increases the fund’s assets and investment opportunities – with only a single fee.

What’s involved in running an SMSF?

If you have a maximum of 4 people who would like to manage their own retirement investments, setting up an SMSF may be a good option. However, you should keep a few things in mind:

  • As an SMSF trustee, all investments must be in accordance with Australian law.
  • To ensure that the fund is being managed properly, an annual audit will be performed on your SMSF. If there are problems, you will have to correct them before the next audit.
  • There are costs involved in setting up an SMSF, as well as investment costs every time you buy shares, property, or bonds on behalf ofthe fund.
  • You will have to commit your own time to tracking your fund’s investments to ensure it’s optimal performance. Even with the services ofan investment professional, you are ultimately responsible.

 

Is an SMSF right for you?

If you’re looking to manage your own investments, check out LyfeGroup’s Investor Lounge. We’ll be hosting an exclusive dinner with Australian SMSF guru, Grant Abbott in the not so distant future.

Sign up to become a member and receive your exclusive invite: www.lyfegroup.com.au

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