A secure future starts with good planning in the present. One way that you can invest in a comfortable future for yourself is by setting up and managing a Self-Managed Super Fund (SMSF).

Is an SMSF right for you? How do you get started? This overview will help point you in the right direction.

Who should consider a Self-Managed Super Fund?

SMSFs are best suited to high income earners and business owners.

The Purpose of a Self-Managed Super Fund

An SMSF is a source of income which you can draw from during retirement. The idea of starting up an SMSF now is so that you can generate wealth to have on hand later when you’re no longer working. Self-Managed Super Funds are closely regulated by the Australian Taxation Office, so you need to get good advice and ensure that you follow the laws pertaining to the management and use of your fund.

The upside to managing your own Super Fund is that your tax rate is only 15%.

Getting your Self-Managed Super Fund Started

To get your SMSF started, you need to have a substantial amount of money already set aside. Additionally, you need to be prepared to pay for the annual running costs. Maintaining an SMSF means that you’ll need to pay for things such as the fee for the required annual audit, professional legal and financial advice as well as accounting.

You can also make valuable investments through your SMSF. You can generate extra income by means of:

– Shares

– Property

– Collectables (as long as they are kept as collectibles and not used or displayed for personal benefit in the present).

Legal Obligations – What You Need to Know

After making the decision to set up and run your own SMSF, you need to be fully aware of the requirements and your responsibilities. A few factors to be aware of include:

– Your SMSF can only have 1 to 4 members

– In managing your own Super Fund, you become the trustee or director which imposes specific legal duties on you

– It’s crucial to design and carefully follow an investment strategy to ensure that your fund will meet your needs

– You need to use the money only for retirement benefits

– You are responsible for keeping careful records of your fund and for arranging the annual audit with an approved SMSF auditor

– You can only contribute up to a specified amount of money each year in relation to your age

Depending on your personal circumstances, setting up a Self-Managed Super Fund could bring you significant wealth benefits. It is crucial to seek expert accounting advice.

Contact Adelaide’s financial experts at Nitschke Nancarrow by calling on (08) 8379 9950 or you can send me an email to set up an appointment.

– Kym Nitschke