If you want more control over your retirement fund then a self-managed super fund (SMSF) may just be the right kind of fund for you. By becoming the trustee of the fund you get to make decisions about the investments and where they are placed, which sounds great in terms of the freedom it awards. However, you also have responsibilities to maintain, such as paying tax and only investing in things that are right for your type of fund. This isn’t the most straight forward option for a super fund, however with a bit of experience you can make the most of your retirement fund.
Opening a Self-Managed Super Fund
Before you open a self-managed super fund up, after deciding that you are certain you want to take this route that is, you should seek professional advice that will advise you on the surrounding laws and really make sure that you are making the right decision. This advice will be invaluable and make you aware of the parameters that surround the investment of your retirement fund that you will be pursuing. For example, you cannot simply invest the money in property that you plan to spend time at. as this would be considered an access to the funds before you are meant to. You also need a good understanding of investment. If all this still seems appealing to you then a SMSF may be the right option for you.
How Much Money Do You Have?
This isn’t an intrusive question, as you will more than likely be asked this whilst setting up your SMSF. It is recommended that you understand the fees that it costs to maintain the fund per year, and how much money you should have in the fund before you decide to pursue this path. If you do not possess enough money or know the cost of maintaining the fund, then you may not be making the right decision. This is again, where professional advice is invaluable and will aid you with everything you need to know and answer any questions.
Setting up the Super Fund
So if you are going to go through with this, you will need to seek a professional (again) to run you through the process. There a number of different types of structures that you can manage your super fund by. One option is an individual fund, where there are four or fewer members and they do not get paid for the work they do. Another choice is a corporate fund, where the fund acts as a company, however there still must be four or fewer members and no one can be paid for their work on the fund. The last option is the single-members fund, where you have only two trustees. Making the right choice for the structure of your SMSF is vital to maintaining the fund correctly.
Hopefully now you have a basic understand of a what a self-managed super fund is and how to go about setting one up. If it is the right choice for you, hopefully this will help you set up your own SMSF.