Managing your own super is not for everyone but it does have its advantages.

Many people out there aren't even sure what the differences are between the various types of super funds available. If you are under 40, super is something you have to contribute to and probably believe you don't need to think too much about it just yet (super=retirement=getting old). If you are over 40, you may have a peaked interest in those fund statements and are just a little intrigued about where it is all taking you. It's at this crossroads when you may be feeling that pull towards taking control of you super yourself.
Guess what? You can.

If you have the time to spend and the inclination to manage your own superannuation fund (it is real Aussie dollars of yours after all) you will see that with your level of effort and knowledge, you can set yourself up for better long term retirement results. These results will vary from individual to individual, but in essence mean that you can achieve the goals you have for your future.

There are currently 3 main types of super funds. There are also other types of funds for government employees and those working for large companies, but for most of the population the following are the most relevant.

Industry funds: These are low cost, low feature funds good for people with low balances and little or no interest in managing their own retirement.

Retail funds: These have slightly higher administrative costs but are usually jam packed with investment options, features and service that make it worthwhile. These are perfect for people with low balances and a reasonable interest in their financial future.

Self-Managed Super Funds (SMSF): These are for people with high balances in super (the minimum would be $100,000 in any circumstance, but usually at least $200,000 is needed). When the balance is over $1 million they are really really cheap to manage. The bells and whistles are endless and are what makes this type of super fund attractive.

The advantages of SMSFs over Industry funds and Retail funds are as follows:

  1. Investment control - you decide where to invest your $, or not to invest if you don't want to. There are types of assets that only SMSFs have access to and they are direct property and exotic investments. You decide when to buy and sell, which will affect the Capital Gains Tax outcomes, and you can borrow to invest if you want to. 
  2. Asset control - SMSFs are a useful asset-holding structure for someone operating a professional practice or small business. For example the fund can own the business premises from which the member conducts their practice or business. As a result the premises can be protected from trading liabilities and again Capital Gains Tax can be minimised
  3. Administrative control- SMSFs can arrange their own administration and ensure that the fund is being looked after by advisers the members know and trust.
  4. Cost control- Essentially your superannuation benefit is a function of how much is contributed, the net earning rate and the costs incurred. Increasing contributions, improving the net investment return and reducing the costs will improve your end benefit. In an SMSF you have a lot of control over the costs.

What effort do you need to put in?

You need to invest some time and you need to take responsibility for your future. It's not a lot of time as the paperwork can be administered for you - have a look at our PrimeWrap product as an example. Importantly, legally you are responsible for what happens in your SMSF and you need to feel comfortable with this.

Please contact us if you want to discuss any of the above. We have everything ready to help make your SMSF journey easy and we will be there along the way to offer support and to keep you ontrack.

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