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Self-Managed Super Fund: The Pros and the Cons

A self-managed super fund, with which you have the freedom to invest in whatever you wish, sounds too good to be true? You decide. This is a great way for you to save up for your retirement, so that you will still have money left even after you cannot work. However, with the control of your own funds, you will also have to take on a lot of other responsibilities as well. This article will tell you precisely who should opt for a self-managed super fund and why. To learn more about SMSF, visit smsfselfmanagedsuperfund.com.au

pros and consThe Pros

The most obvious pro, as has been mentioned before is the fact that you have the freedom to invest wherever you wish, however you wish. Also, you are also allowed to take loans for your investments. And as mentioned before, this is a great method for you to secure your future, and by saving up for after your retirement.

Aside from that, since this is your fund and you are a trustee, you have the authority to increase your profits by reducing certain fees, as such as the ongoing fees, by carefully deciding where you invest and by keeping your transactions to a minimum. As a trustee, you also have greater access to the investment strategy and the management, and you can control them however you wish.

You can also take advantage of the concessions in taxes, and the income earned through the investments would only be taxed at a maximum rate of 15%, which is lower than the original form of taxation, which is according to your marginal tax rate. Aside from all these benefits, you also get to avoid the industrial fees, and not to mention, you feel free and satisfied by being able to manage your own super fund.

The Cons

Not only does setting up your own SMSF come with an increased amount of responsibilities, but like any other investment, it also carries risks. You will need to start off with a huge amount of money just to start up, and according to the 2009 Government review, anything less than $200,000 may not be good enough, as it may not be cost-effective.

You also need to spend a lot of time and energy for this. Not only that, you need to be skilled enough to manage these funds. And as a trustee, you need to keep records of all your transactions, meet all the requirements in your reports, and you also have to make sure that you’re sticking to your investment strategy, and you have to be careful to follow all superannuation laws, as not meeting their requirements could have serious consequences.

Bottom Line

After all that’s been said and done, the main point that you need to remember is that these funds are for your retirement. It might be difficult to manage and it might be time consuming, but this is an excellent way to make sure that you have a good life even after your retirement.


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