Is an SMSF right for you?

7 steps to consider before you decide if a SMSF is right for you.
In my recent blog “7 Step Retirement Plan“, one of the key steps in planning for your retirement is to have a superannuation plan.

A key component of a superannuation plan is choosing which fund is right for you.

Statistics from the ATO show the rapid increase in the number of Self Managed Superannuation Funds (SMSF) being used by taxpayers as a vehicle to accumulate their retirement savings – Self-managed super fund Statistical Report – June 2013. The costs to establish an SMSF are being heavily discounted as new participants enter a market which was previously the domain of accountants. The differences between SMSF’s and other superannuation funds have narrowed because of increased competition and many of the perceived advantages of SMSF’s in the past are no longer valid.Some of the main reasons SMSF’s were set up in the past include;

  • Control
  • Intergenerational wealth transfer
  • Ability to borrow
  • Cost savings; and
  • Investment flexibility eg. purchasing property.

Tread carefully, for if you decide to set up an SMSF for the wrong reasons it can be a costly mistake. Consider the costs associated with administering the fund, winding it up if it no longer required and the risk and cost of making poor investment decisions.
The following are 7 steps to consider before deciding to establish an SMSF:

  1. Investment strategy. What do I plan to invest in, do I need a SMSF to invest in these assets?
  2. Estate Planning. Do you I want to use my superannuation fund to assist in transferring wealth to my family?
  3. Cost. Do I have enough money to invest to make it cost effective to manage an SMSF on an ongoing basis?
  4. Life stage. Is an SMSF suitable for my life stage, do I require simplicity or am I prepared to deal with the complexity of an SMSF?
  5. DIY fund or outsourced. It is very rare that a member of the fund will do all the tasks that are associated with an SMSF themselves. SMSF’s are complex tax structures with onerous legal reporting requirements. Failure to comply with the various rules can lead to severe penalties.
  6. Contribution strategy. What strategies can I use to increase the level of my superannuation savings?
  7. Tax strategies. What taxation strategies do I need to use to maximise my superannuation savings?

Once you have followed these 7 steps you will be in a better position to decide if an SMSF is the right fund for you.

If you would like to arrange a meeting to review your superannuation plan or to discuss if setting up an SMSF is the right choice for you, please contact us on 0499976058.


General Advice Warning: Any advice on this site is general advice only and does not take into account the objectives, financial situation or needs of any particular person. It does not represent legal, tax, or personal advice and should not be relied on as such. You should obtain financial advice relevant to your circumstances before making any decisions.


General Advice Warning: Any advice on this site is general advice only and does not take into account the objectives, financial situation or needs of any particular person. It does not represent legal, tax, or personal advice and should not be relied on as such. You should obtain financial advice relevant to your circumstances before making any decisions.