Is This the Year to Switch to A Self-Managed Super Fund?

If you’ve been thinking about a self-managed super fund (SMSF) for a while, this just might be the year to take the leap. Many individuals have spent time during the pandemic thinking about their retirement savings, learning more about the markets, and taking a more active role in their investment portfolios. If you fall into any of these categories, or even if you’re just curious, a self-managed super fund can allow you to take a much more proactive role in your retirement investments.

A self-managed super fund is still fundamentally the same as your current super fund – it’s an investment account designed to help you grow your savings as you work towards retirement. Having an SMSF just means that a much more active role is required of you as the fund manager. Generally speaking, the members of an SMSF (that’s you) are also the fund’s trustees. This means the fund’s members also manage the fund activities, including investment allocations and choices and compliance with all legal regulations like superannuation and tax law.

Managing your own super fund may appear to be a lot of work, but there are also clear and worthwhile benefits in certain circumstances. The 1.1 million SMSF members reported by the ATO as of June 2017 must also agree. Here are the two most significant advantages to running your SMSF:

• Administrative ownership Super fund administration probably isn’t something you think about much, but by taking ownership of your fund, you’ll gain a greater degree of ownership over the fund’s operation. You, and any other members, become the sole decision-makers. If you’re not so confident you understand your compliance obligations, you may also hire a professional to assist. A licensed adviser or administrator will work with you to ensure things don’t go awry and your legal obligations are met.

• Financial Freedom Holding an SMSF gives you greater investment choice. You’re no longer limited by the investment categories designated by industry or retail-run funds. With an SMSF, you may invest in unique areas such as artwork or direct property purchases. These do, of course, come with their own set of risks and rules, which should be carefully understood before you proceed.

Other benefits of an SMSF can include everything from saving money on fees, tax benefits on capital gains tax and other taxation areas, and the ability to hold insurance on fund members through the fund – another tax advantage. This is, again, an area where engaging a financial professional to ensure compliance can be a wise move.

Overall, if set up and managed efficiently, a self-managed super fund can provide a financially advantageous and flexible way to prepare for a comfortable retirement.

How can Halkin Business Partners help?

At Halkin Business Partners we work with 3rd party financial advisers who can assist with advice whether a SMSF is right for you. A financial advisor will work with you to ensure the initial set-up is done correctly and you’re meeting all legal obligations from day one with no surprises waiting for you further on.

Our tax consultants at Halkin Business Partners have expertise administering the compliance of self-managed superannuation funds.