Is an SMSF right for you?

Self-managed super is growing in recognition for all age groups. But how do you know if it is appropriate for you?

This was a question that I was asked recently on my News Corp Gen Y column and it is surely valid self-managed superannuation funds (a.k.a SMSFs) are massively common.  Based on the most current statistics from the tax workplace, there are about 530,000 self-managed super funds in Australia, with much more than 1 million total members. Those SMSFs manage about $ 545 billion of investments – around a single-third of all cash in superannuation in Australia. It is large!

A self-managed super fund, as the name suggests, is 1 exactly where you handle it oneself. You can have up to 4 members of the fund and every single member is a Trustee, responsible for ensuring that the fund invests the cash appropriately, abides by the several complex rules and files all paperwork correctly.  It is not a responsibility to take lightly.

An SMSF can suit folks of all ages, but some questions to ask your self when attempting to make a decision consist of:

• Do you have at least $ 200,000 to invest? If not, you may uncover that the accounting, auditing and legal charges are also steep to justify.


• Do you have the potential to be super-organised with paperwork? If you are meticulous and punctual with your personal economic records, you most likely have the level of time-management talent that you’ll require to run an SMSF.


• Do you have a genuine wish to investigation and implement an investment approach for your personal retirement? Yes, you can outsource some of the investment legwork to a financial planner, but you still want the self-assurance and talent to make the final assessment – and to justify it if you are audited.

There are a lot of other implications of operating your own SMSF, like insurance considerations, your extended-term connection with the other SMSF members and the chance price of getting self-managed.  Don’t make the selection lightly but, if it interests you, certainly verify it out.

Is an SMSF right for you?