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SMSF is a Self Managed Superannuation Fund. It is the fastest growing sector
inside superannuation. It's a fund where you essentially run your own
superannuation
and you manage it yourself. It's also referred to as DIY Super, do it yourself,
, because it's putting you in the driver's seat. It's letting you run your own fund.
You make your own investment decisions, and really it's about you setting your own
course for your retirement.
The rule of thumb really is that you need around $200,000 of assets
to invest to make it worthwhile. That said though, you can set up a fund with any
level of fund balance. It's also important to remember you can pool resources.
In fact 70% of Self Managed Superannuation Funds involve partners and couples
putting their money into one pot to invest, and that's how they get the
$200,000 minimum. To make it worthwhile though, you need to invest
the time, and the essential thing here is to consider do you have the skills to run your own
superannuation, do you understand enough about investing, have you got the right resources at your disposal
to help you run that fund.
There's a number of things that you need to look out for if you're going to set up your own fund.
Firstly, it's about understanding your obligations as a trustee of your own fund.
There are legal obligations associated with it, so there's legislation to be
aware of. Self managed super is a very tax effective environment to invest within,
and because of that there's understandably quite a strong compliance regime
wrapped around running your own fund.
So making sure you understand those obligations is really important.
Making sure you're across any changes in legislation, often things do change in the investment
environment, that's important as well. And also making sure you've got a good
investment strategy,
and in the last 12 months, the rules have changed where you now need to have a
regular review of your strategy.
It's important to get advice before you start one, it's also important to
consider the role of financial advice in terms of the administration aspects of
your fund,
and also getting advice when you change your investment strategy.