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Checklist for setting up a SMSF

Q. I have around $105,000 in my super fund and I am toying with the idea of setting up my own self-managed super fund. What do you think about that? 

A. Generally it’s a good idea but let me give you a checklist of questions and tasks that will help you decide. By the way $105,000 I think is on the low side to cover the expenses. The cost of using an industry fund will be around 1%. It costs you around $2000 to run your fund using accountants, stockbrokers, etc., so your costs would be 2%. I think a minimum should be $250,000 to set up a self-managed super fund, but some experts say $500,000 to a $1 million is needed to justify it. Are you keen to become your own fund manager and do your research? Are you happy to read all of the rules on the Australian Tax Office website that you have keep to do it legally right? Will you keep to those rules? How will you set up the funds strategy? How will get the advice for buying the assets in the fund? Will you outperform the professionals who run industry or retail funds? If you’re happy to play ball and shoulder some of the early costs, it could be a good move. However, be honest with yourself — do you want to be engrossed by this big step? If the answer is yes then go for it. If not, let the professionals do it and you look for a fund with a low fee and great history of performance. 

For advice you can trust, contact Switzer Financial Services.

Important information:This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.



Published on: Friday, October 23, 2009

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