Saving for retirement is an essential part of financial planning, but it is also important to know what options you may have available when it comes to saving for your retirement goals. A self-managed super fund (SMSF) is one of those options and at Vogue Planners, we can help you determine if a SMSF is right for you and the type of retirement lifestyle that you want to achieve.
What is a Self-Managed Super Fund (SMSF)?
A SMSF is a superannuation fund (super fund for short), therefore it is important to understand what a super fund is first. A super fund is a retirement account that is typically contributed to by your employer to help you save for retirement. Employees also have the option of contributing to their super so that they can save more money for retirement, above and beyond what their employer contributes. The funds placed into a super account are invested, giving the balance the ability to grow over the years.
Now knowing what a super fund is and how it helps you save for retirement, a SMSF involves being in charge of your own super. In this situation, the super fund is not managed by your employer, although a company can be a trustee if certain provisions are met. You are entirely responsible for providing retirement benefits to the member/s of the fund. One of the major differences that a SMSF provides is that you act as your own trustee for the fund. In addition:
- A SMSF can have 1-4 people as members and each member has to be a trustee.
- Members of the SMSF cannot be employed by any other member of the fund.
- In general, no member of the SMSF can be paid for any work that they do relating to the super. However, there are provisions for reimbursement when a member pays direct expenses and fees.
Vogue Planners will assist you in determining the requirements that need to be in place for your SMSF.
The Benefits of a Self-Managed Super Fund (SMSF)
One of the greatest advantages of a SMSF is that this type of fund typically has more flexibility and freedom in regards to where the funds are invested. Other advantages include:
- Having the ability to manage the fund, which results in a higher level of control than you would have with other super funds.
- Members of the SMSF know exactly where their money is invested, which in turn gives security about saving for retirement.
Self-Managed Super Fund Considerations
While a SMSF gives trustees greater flexibility, managing the fund also takes a lot of time, effort and hard work. There are very stringent rules regarding how a SMSF can be utilised and when money can be accessed from the fund. You will also be responsible for:
- All legal duties and matters regarding the fund
- Establishing and maintaining an investment strategy that will result in the SMSF meeting or exceeding your retirement goals
- Keeping detailed and accurate records
It is important to gain as much knowledge as possible so that you can make an informed decision regarding what kind of super fund is right for you. There have been significant changes made to regulations that govern SMSF so it is important that you stay up to date with all of the latest information.
Obtain Professional Advice on Self-Managed Super Funds
While the thought of managing your own super may sound overwhelming, the important point to remember is that it is an investment for your retirement. For that reason alone, it is a good idea to obtain professional advice. At Vogue Planners, we will assist you with:
- Reviewing your current super accounts.
- Discussing the benefits of establishing a SMSF.
- Determining your retirement goals and if a SMSF would be the right option for you.
- Advice with regard to the regulations and reporting requirements involved with a SMSF.
- When money can be withdrawn.
- What happens if other members no longer wish to be in the fund or have reached retirement age.
Vogue Planners will use our SMSF knowledge and experience to help you make the best decisions for your unique financial situation. We care about your financial goals and will provide guidance to help you achieve them. We analyse each individual circumstances and work with each customer to find the right solution. If you have made the decision to establish a SMSF or already have one set up, or you are still considering if it is the best option for you, our professional and experienced staff are happy to assist you with the questions and concerns that you may have. Contact us today for more information on SMSF and retirement planning.