The future is ever elusive and uncertain, full of both possibilities and dangers, and that is exactly why we feel the need to protect ourselves from an unwanted turn of events. It is in our human nature to seek ways to ensure our own future well-being and that of our dearest ones. For many decades now, we do this by making plans and arrangements that will provide us with some sort of security, especially financial one. Setting up and running a Self Managed Super Fund (SMSF) is one of the many alternatives we can use in order to achieve this purpose.
When you are considering the option of establishing an SMSF, you are probably thinking whether a certain level of SMSF education is required. Although you are not legally obligated to have basic knowledge of the steps you need to take towards setting and running an SMSF, it is very much preferable to dive into these financial waters with previous preparations. We have assembled a list of useful information related to SMSFs as a form of retirement planning, but you can always hire and consult with experts in the field. There are many experienced professionals who will not rest until they provide you with the necessary degree of SMSF education and help you start your very first SMSF.
Let’s begin with the listing, shall we?
- First of all, let’s give a short definition of an SMSF. A Self Managed Super Fund is a retirement fund composed of maximum four members (who are usually relatives or friends), and its main (and only legal) purpose is to supply them with financial compensation in the form of pension in the years to come.
- It is crucial to have in mind that you, as a member of this fund, are also its trustee, which means that you are completely responsible for the management of its assets, its investment strategy, and its overall success. This strongly suggests that you need to have both the knowledge and the time if you decide to choose this retirement savings option.
- On the other hand, being the fund’s administrator provides you with control over all of its possessions, and it also gives you the freedom to select the investment options you wish to put your money into. This flexibility is one of its many advantages.
- When considering whether to establish an SMSF with your family members and/or your friends, you must include the costs and the taxes into the equation. Furthermore, an SMSF is obligated to write and provide the regulatory authority with financial statements, assessments of the fund’s assets and other reports. This may cause additional expenses for professional services, since the trustees of the fund are generally incapable to generate these reports without help from experts.
To start an SMSF or not to start – the choice is yours, but make sure to be well informed about all of the important details regarding its set-up and running before the decision is made.