| DIY Superannuation - How Much Control Do You Want? |
| Articles - Savings |
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Australia's retirement savings industry is second to none. It forces our employers to put money away for us each in each pay packet, and we get to spend that money once we retire.
Australia's retirement savings industry is second to none. It forces our employers to put money away for us each in each pay packet, and we get to spend that money once we retire. One of the things I don't like though is the way you lose control of you money in the Australian Superannuation Industry. It is getting better, but for me there is still a very big issue here. You generally do not have a big say in how your money is invested. This is why I set up my own DIY Super fund. 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. Trustee - The trustee is the legal owner of the assets of the fund. Basically it is the trustee who takes legal responsibility for the fund. If anything goes wrong, it is the trustee who gets the blame. 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. Thirdly the fund needs to be audited. Each year, it needs to be checked by an independent auditor to ensure you are keeping within the superannuation regulations. This is what will ensure you get to keep receiving your superannuation tax concessions. 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. Personally, I was just interested in managing my investments. All the rest was outsourced. I just wanted to be able to ensure the investment decisions I made were mine so I could feel responsible for any losses or gains that I made. There is nothing worse than when your retirement investments decrease over a year and you have no control whatsoever in the decisions made. I wanted to avoid this. Also, getting control of this meant that I could make investment decisions giving my whole portfolio consideration and not treat my retirement investment as if it were an island, completely separate of other investments I have. It is all part of my estate after all. 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. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Gnifrus Urquart enjoys controlling his retirement investments, as well as the freedom outsourcing his DIY Super Administration affords him. |