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SMSF – Your questions answered, day one – what is a SMSF?

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Retirement planning is undoubtedly one of the most overlooked aspects of your career. You may have a plan for career progression, promotions and pay rises but have you factored in your financial situation when the daily slog is a thing of the past?

With an ageing workforce and population, more and more people have begun to look at their superannuation options. There has never been a better time to do likewise.

You may have heard the term self-managed super fund bandied around. And rightly so. It is an ever-growing sector in superannuation. In fact, nearly a third of all super assets are now held within self-managed funds and the number of funds has doubled in the last decade. As at June 2010, there are more than 400,000 with close to 820,000 members, and shows no signs of slowing down.

Policed by the Australian Taxation Office, owning and managing your self-managed super fund is almost a full-time job and the laws and regulations surrounding them is enough to warrant a text book. So, let’s break down the gobbledygook and look at the basics. 

What is a self-managed super fund?

Put simply, a self-managed super fund (SMSF) is just another means to save for retirement. However, unlike traditional or industry super funds, a SMSF allows its members (known as trustees) to decide upon the fund’s investment strategy. You have ultimate control over where and how you invest your nest egg.

The trustees

A SMSF has four or less members. It can be structured with corporate trustees, individual trustees or as a single-member fund. How you structure your fund depends on your individual needs and circumstances.

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: Monday, December 20, 2010

The Switzer Super Report is a newsletter and website for self managed super funds. With exclusive commentary from Peter Switzer, Roger Montgomery, Paul Rickard and Charlie Aitken the Switzer Super Report will help you maximise your after tax investment returns and grow your DIY Super. Click here for a free trial or subscribe today.

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