Managing your retirement savings through a self-managed super fund (SMSF) can be enticing. SMSFs have gained popularity in recent years because of the control in shaping your superannuation investments. As you contemplate this avenue, it’s crucial to understand the aspects that can make or break your SMSF journey.
1. Understand the risks and responsibilities
SMSFs offer the opportunity to diversify your investments and manage your retirement fund. But they also come with their own unique set of risks and responsibilities. Every member of an SMSF shares the responsibility for decisions and compliance. This means a thorough understanding of the risks and regulations around SMSFs is essential.
Nexis Accountants and Business Advisors understands the difficulties in managing SMSFs. Our SMSF service ensures you have access to up-to-date information, maintaining your SMSF’s adherence to all obligations.
2. The comprehensive nature of SMSF management
Controlling your investments is great but managing an SMSF takes a lot of time and effort. The rules and regulations for SMSFs are continually changing. Additionally, researching and choosing suitable investments can take time.
This is where Nexis Accountants and Business Advisors can help. Our team can help with the administration required to set up and maintain your SMSF. We prepare the annual financial statements (including member statements), and tax return and organise the annual independent audit. You can focus on the strategic decisions by letting us complete these administration tasks for you.
3. Financial and legal expertise
Financial and legal expertise is essential to navigate the complexities of SMSFs effectively. As an SMSF trustee, you need to possess the financial and legal knowledge and skills to:
- Set and manage an investment strategy that aligns with your risk tolerance and retirement needs.
- Ensure compliance with tax, super, and investment laws.
- Arrange suitable insurance coverage for all fund members.
- Understand different investment markets and construct a diversified portfolio.
We offer referral services to trusted financial advisors who specialise in SMSFs. They can guide you in making informed decisions about setting up and managing your SMSF.
4. Starting balance and suitability
When deciding to set up an SMSF, it’s essential to focus on the overall suitability rather than the fund’s starting balance.
An SMSF with a lower starting balance may be suitable if you are willing and able to manage much of the administration and management yourself and if you intend to incorporate additional funds from a business property, inheritance, or another superannuation account.
An SMSF with a higher starting balance might not be suitable if it doesn’t align with your objectives, financial situation, or expertise.
5. Research and set up investments
The last thing to do is explore investment choices and think about seeking expert advice. Having an SMSF gives you more control over your investments, but there are rules about where you can invest your super money.
Professionals like SMSF auditors, accountants, and lawyers can help. But having a licensed financial adviser who knows much about SMSFs is valuable. They can guide you in making smart choices about managing your SMSF.
When setting up your SMSF, it’s essential to adhere to regulations. The ATO regulates all SMSFs, and its website offers guidance on the necessary steps. Choosing the proper structure for your SMSF is vital. The structure, whether individual or corporate trustees, can impact your compliance obligations.
Nexis Accountants and Business Advisors is here to assist you throughout this journey. Our team can help you to be well-prepared and well-informed every step of the way.
If you’re looking to start your own SMSF, get in touch today.