Self-managed super fund advice offers an attractive option for those who wish to have greater control over their retirement savings. However, setting up and managing an SMSF requires careful planning, a good understanding of the rules and regulations, as well as sound investment strategies. Here are some top considerations you should make when setting up an SMSF.
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Understanding Your Responsibilities
One of the most important self-managed super fund advice is understanding your responsibilities as an SMSF trustee. You’ll be in charge of the fund’s legal responsibilities, which include ensuring that your fund complies with all the relevant laws and regulations. Non-compliance can lead to serious penalties.
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Investment Strategy
Developing a robust investment strategy is a critical aspect of managing an SMSF. Your strategy should be tailored to the specific needs and objectives of all the fund members. It should also take into account the risk tolerance and retirement goals of every member. Diversification is key to managing risk, so ensure your investments are spread across different asset classes.
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Professional Assistance
Even though SMSFs give you more control, they also come with complex administrative duties. This is where self-managed superannuation fund administration comes into play. Engaging professional services can help you manage these tasks efficiently. These professionals will assist in preparing financial statements, lodging tax returns, and conducting an annual audit of your fund.
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Insurance Considerations
Insurance is a crucial aspect of an SMSF that often gets overlooked. As an SMSF trustee, you need to consider life insurance, total and permanent disability (TPD) insurance, and income protection insurance for each member of the fund. These insurances can provide financial security to the members and their dependents in case of unforeseen circumstances.
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Cost Implications
Running an SMSF can be more expensive than being a member of a standard super fund due to the costs associated with legal compliance, auditing, tax return lodgments, and investment fees. It’s important to do a cost-benefit analysis before deciding to set up an SMSF.
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Exit Strategy
It is to have an exit strategy in place. There may come a time when managing an SMSF is no longer viable or beneficial. In such cases, you should have a plan for winding up the fund and transferring the assets to a retail or industry super fund.Conclusion:
Setting up an SMSF is a significant decision that requires careful consideration and planning. By understanding your responsibilities, developing a strong investment strategy, considering insurance, assessing cost implications, and having an exit strategy in place, you can effectively manage your self-managed super fund advice. Remember, professional assistance is available to help you navigate through the complexities of SMSF management and administration.
