DIY Superannuation - How Much Control Do You Want?
The retirement industry in Australia is second to none in the world. It forces us to save money in a very comfortable way, a way that doesn't impact our disposable income, so we all have a big pool of money to live off in retirement.
One of the pitfalls of superannuation for me though is the way you lose control of your money. It is your money, yet often someone (such as your employer and usually due to your own inaction) decides where your money is invested. For this reason, I set up my own Self Managed Superannuation Fund (SMSF).
Without making this article too complex, all an SMSF is, is a structure which enables you to manage your own superannuation money. There are a number of responsibilities which come with running your own super fund, you can manage these yourself or outsource them as you see fit. Most of these responsibilities follow:
1. Your Trustee Responsibilities. Someone needs to legally own the assets of the fund. This is the trustee. The trustee is also responsible for the running of the fund, so if anything goes wrong, it is the trustee who is legally liable.
2. Administration - The administrator looks after all the book keeping and accounting responsibilities. They will prepare and lodge the annual tax returns and documents and ensure all the accounts balance at the end of each financial year.
3. Audit - The auditor looks over all the accounts prepared by the administrator to ensure they comply with the existing superannuation and tax law. A successful audit will mean you maintain your status as a complying superannuation fund, so you can continue to receive the superannuation tax benefits.
Finally, you need to invest the money in a way that responsibly improves the pool of funds for your retirement. The investment decisions have to be within the superannuation regulations as well as the investment strategy as outlined in the SMSF trust deed.
Myself, well all I wanted was to make my own investment decisions, live and die by my own sword so to speak. I have always thought this was really important as retirement savings are one part of my entire investment strategy and estate, they are not an isolated pool of funds. The decisions I make here need to be responsible to the big picture and work in harmony with the non-retirement savings investment decisions I make.
I find all the other responsibilities to be very time consuming so I've outsourced them. This leaves me more time to analyse my investments properly and make better investment decisions. - 23208
One of the pitfalls of superannuation for me though is the way you lose control of your money. It is your money, yet often someone (such as your employer and usually due to your own inaction) decides where your money is invested. For this reason, I set up my own Self Managed Superannuation Fund (SMSF).
Without making this article too complex, all an SMSF is, is a structure which enables you to manage your own superannuation money. There are a number of responsibilities which come with running your own super fund, you can manage these yourself or outsource them as you see fit. Most of these responsibilities follow:
1. Your Trustee Responsibilities. Someone needs to legally own the assets of the fund. This is the trustee. The trustee is also responsible for the running of the fund, so if anything goes wrong, it is the trustee who is legally liable.
2. Administration - The administrator looks after all the book keeping and accounting responsibilities. They will prepare and lodge the annual tax returns and documents and ensure all the accounts balance at the end of each financial year.
3. Audit - The auditor looks over all the accounts prepared by the administrator to ensure they comply with the existing superannuation and tax law. A successful audit will mean you maintain your status as a complying superannuation fund, so you can continue to receive the superannuation tax benefits.
Finally, you need to invest the money in a way that responsibly improves the pool of funds for your retirement. The investment decisions have to be within the superannuation regulations as well as the investment strategy as outlined in the SMSF trust deed.
Myself, well all I wanted was to make my own investment decisions, live and die by my own sword so to speak. I have always thought this was really important as retirement savings are one part of my entire investment strategy and estate, they are not an isolated pool of funds. The decisions I make here need to be responsible to the big picture and work in harmony with the non-retirement savings investment decisions I make.
I find all the other responsibilities to be very time consuming so I've outsourced them. This leaves me more time to analyse my investments properly and make better investment decisions. - 23208
About the Author:
Gnifrus Urquart enjoys taking responsibility for his retirement savings, as well as the leisure time outsourcing his DIY Super Administration affords him.
posted by X - Men @ 1:55 AM
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