What to consider before starting an SMSF
There are a lot of advantages to having a self-managed superannuation fund (SMSF). Increased flexibility and control over your savings are the most obvious benefits, with many SMSF trustees and members appreciating the ability to make their own investment decisions.
Other advantages include the possibility of investing in a property, the ability to manage administrative costs, and, in some cases, tax breaks.
However, there are also a lot of responsibilities associated with running a SMSF, and it is not necessarily an advisable choice for everyone. Here are some things to consider if you are interested in starting an SMSF:
To justify the costs associated with running a SMSF, you should have a relatively sizeable amount, or be anticipating a rapid accumulation of funds. The ATO suggests having a minimum of $200,000, however this is often debated amongst industry representatives.
If you want to manage your own super, you should have a relatively robust understanding of finance and the confidence to make your own investment decisions.
Managing your own super fund is generally a time-consuming endeavour. There are many compliance issues you need to be aware of, and you also need to ensure that you remain abreast of any current changes to legislation.