When we talk about DIY super funds, our minds do not run over the small APRA funds (SAF) in general. By and large, the term ‘DIY’ in Super funds connote self-managed Super funds. The beauty of SMSF is that it allows you great flexibility in terms of your investment and gives you a very high degree of control over where you want to invest and just how much you want to invest. This is something that industry Super funds have missed all through.
Thousands of articles across the internet are devoted towards answering the question, “Is SMSF for you?” I won’t shy away from agreeing that I have myself spent a bit of energy talking about the subject over this website. So, let me just try reaching out to you on this matter with a different perspective.
For all its achievements, the SMSF industry has never quite been able to quash the tag of a “volatile industry”. This said, no one can contest how in quick time it has siphoned off a good deal of business from the other industry funds often leading to caustic attacks from the latter.
Consider SMSF as a trust that is meant for the sole purpose of providing the members a decent source of income when they retire. Of course, family members and beneficiaries also reap benefits in case of demise of a member. Members in employment roles need to deflect their Superannuation contributions towards their allocated SMSF account. For the purpose, the SMSF need to possess an Australian Business Number (ABN), Tax File Number (TFN) and a bank account. Understanding how SMSF works is the first step to be able to take advantage of it.
Under the Superannuation Guarantee Laws, it is binding on your employer that he pays 9.5% of your salary/wages to your Super fund’s member account. It is a legal binding and pertains to any employee who is above the age of 18 and earns in excess of $450 monthly.
A self-managed superannuation fund (SMSF) is definitely quite desirable when you reach it from the perspective of flexibility and control. However, before boarding the SMSF bus, you must figure out whether it is a good deal for you or not. Yes, SMSF gives you full control over the pace at which you want to build your retirement savings but having said this, it also asks you to come out wearing the cloak of “extra responsibility”.
The egg is on the faces of SMSF critics. Anything new gets its fair share of criticism, but some prove they thoroughly deserve a day in the sun. SMSFs are just such an example. I am not saying that SMSFs do not underperform, but somewhere it can be put down to the lack of effort or know-how of the trustees. Good that there is no shortage of techniques to boost the performance of your SMSFs. Here is discussing a few:
In an article for the website Herald Sun, Jeff Kennett talks about the expanding need for financial advisers and why they will become an even more vital cog in the wheel in the future. This said, Kennett is convinced that the same advisers will have to be “specifically trained” in their jobs and be of unquestionable moral conduct.