Self Managed Superannuation Funds (SMSF) have become a very popular way for Australians to manage their retirement funds. Today, there are more that 500,000 SMSF’s in Australia and the total assets held by SMSF’s is in excess of $500 billion. So if everyone (so it seems) is doing it should you?
Well, there certainly are some advantages SMSF’s have over other types of funds and these include:
• You control the investments that the fund undertakes
• You can invest in some assets types that are not available in other funds
• You can borrow money to invest in assets (borrowing to purchase property has become a popular strategy).
• There are a number of strategies that can be put in place with a SMSF that cannot be done through other types of funds
BUT they are not for everyone (just because your mate has one does not mean that you should). The things you need to also consider if you are thinking about setting up an SMSF are:
• Are you comfortable making investment decisions?
• Are you comfortable taking on the responsibility of being a trustee of a SMSF?
• Do you have sufficient superannuation to make an SMSF cost effective?
Setting up a SMSF to manage your retirement funds is not a decision to be taken lightly. You should talk to your accountant or financial adviser to seek advice before you take any action. Sadly, there are many Australians with SMSF’s who really should not have them. But, for some they are a very good option and the strategies you can undertake with the help of your SMSF will allow you to maximize your retirement benefits.