Are you considering taking control of your retirement savings? establishing a self-managed super fund (SMSF) may be a wise decision. SMSFs offer greater flexibility and control over your investments, and allow you to tailor your fund to meet your specific needs and objectives. However, setting up an SMSF can be complex and time-consuming, and requires careful planning and execution. Here are the key steps you need to take to establish your SMSF:
Develop an Investment Strategy
Before setting up your SMSF, you should determine your investment strategy, which will guide the investment decisions of your fund. Your investment strategy should take into account your financial goals, risk tolerance, desired rate of return, liquidity, insurance needs and time horizon. Your investment strategy should include the types of assets you will invest in, such as shares, property, or cash. You should also consider the diversification of your investments, and the level of risk you are willing to take.
Choose Trustees
One of the unique features of an SMSF is that the members of the fund are trustees. You can choose from an individual trustee (at least two trustees required) or director of a corporate trustee (if one member fund). As a trustee, you are responsible for managing the fund, making investment decisions, and complying with legal and regulatory requirements.
When choosing trustees, you should consider their level of knowledge and experience, as well as their ability to work together effectively. You should also consider the time and resources required to manage the fund.
Establish the Fund
To establish your SMSF, you will need to register it with the Australian Taxation Office (ATO), and obtain an Australian Business Number (ABN) and a Tax File Number (TFN) for the fund.
You will also need to set up a trust deed, which outlines the rules and regulations governing the operation of the fund. The trust deed should include the names of the trustees, the investment strategy, and the powers and responsibilities of the trustees.
Open a Bank Account
Once your SMSF is established, you will need to open a separate bank account for the fund. All contributions, income, and expenses of the fund should be processed through this account.
Roll Over Your Superannuation/Start Contributions
If you have existing superannuation funds, you can roll them over into your SMSF. This will consolidate your retirement savings and give you greater control over your investments. Alternatively, you can make various contributions (concessional, non-concessional, in-specie contributions) subject to caps. You should review the fees and charges of your existing superannuation funds before making a decision to rollover, as some funds may charge exit fees or have high ongoing fees that may not be suitable for your SMSF.
In conclusion, establishing an SMSF can provide you with greater control and flexibility over your retirement savings. However, it requires careful planning and execution to ensure compliance with legal and regulatory requirements.
We provide expert advice and support to help you establish and manage your SMSF. Contact us to discuss how we can help you achieve your retirement goals.
Disclaimer
No person should rely on the contents of this publication without first obtaining advice from a qualified professional person. This publication is for discussion and education purposes only and the editor is not responsible for the results of actions taken on the basis of information in this publication, nor for any error or omission from this publication. This editor expressly disclaims all and any liability to any person, including reader for any part of this publication.