SMSF - The Freedom Of Managing Your Own Money | Savings

SMSF - The Freedom Of Managing Your Own Money

by GnifrusUrquart

The superannuation system is great for all of us. Our employer puts money away for our retirement, money which we never really see anyway so it does not impact our lifestyles. Then, when we retire, we have a massive pool of saved funds which we can enjoy.

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 getting into the legalities of it, an SMSF is a legal structure where you take on the management and administration responsibilities of your superannuation money yourself. Once you set up an SMSF, there are a number of responsibilities which need to be taken care of. You can be as involved as you like with these responsibilities, or outsource where you think it is appropriate. These responsibilities are as follows:

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.

b) All the housekeeping. Someone needs to do all the book keeping and accounting work. This includes preparing all the annual tax statements, balancing the books and lodging tax returns.

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.

Time is always an issue though, which is why I outsourced all the other duties. Getting rid of all those responsibilities left me with much more time to research and make appropriate investment decisions.

DISCLAIMER: This article is provided as information only and is not to be taken as financial advice.

Gnifrus Urquart enjoys taking responsibility for his retirement savings, as well as the leisure time outsourcing his DIY Superannuation Administration affords him.