The past few years have been awash with a steady focus on saving for the future, in times like these it’s more important than ever to be thinking for a concise and dependable stream of revenue for retirement. The fluctuations and overall change in conversation regarding retirement trusts and their investments have prompted a slew of people looking at setting up a self managed super fund.
Setting up a self managed super fund may seem like an overwhelming and confusing task, but with a few tips and the right advisors it’s never been easier.
An SMSF has a lot going for it in terms of perks for those involved, it offers a superior flexibility with taxation, allowing a greater control over the investments being made as well as potentially lower fees associated if the account balance is high enough. The SMSF is run by the people investing into it, which adds a degree of self-preservation and care when considering where to invest the money and for whom the person goes into a partnership with for the trust.
With a strong economics background you should not have too many issues with setting up a self managed super fund. However, if the intricacies of economics are not your strongest suit, it’s always wise to have a financial advisor assisting you with setting up a self-managed super fund.
The Process of Setting Up A Self Managed Super Fund
While you will likely hear about the difficulties of setting up a self managed super fund, the freedom you have to adjust and invest as you see fit is quite a tempting, especially with all the news surrounding corruption in retail and industry trusts. It will take a lot of work to manage an SMSF, but with the right attitude and dedication, anything is possible.
Here are the key points to setting up a self managed super fund:
Choosing Your Members
The first and foremost step to setting up a self managed super fund is the choosing of trustees or members. In a typical SMSF, you can have up to four individuals, bear in mind that a corporate entity can be considered a singular corporate trustee if desired.
It’s important to have an established trusting relationship with your other trustees as after the SMSF is established, it’ll be on all of you to ensure that the work is being done above board and correctly, there are some hefty fines out there for mismanagement.
The most important part of setting up a self managed super fund, besides the member selection, is the establishing of a trust deed and trustee declaration. A trust deed is the constitution by which the SMSF will be run. It will basically be a reference for all decisions made by the trustees in future endeavours in all things related to investments and large decisions.
After this fact, the trustees will sign a declaration that is legally binding, it is an extra measure of legality to ensure all members understand their responsibilities in the SMSF. Without a trust deed, there is very little chance of setting up a self managed super fund properly.
One of the final opening aspects to setting up a self managed super fund is the registration with various governmental entities for legal reasons. The SMSF must be registered with the Australian Business Register, A Trust Lookup. To save money on extra taxation and fines, it’s also best to elect for the ATO to regulate. All members should also provide their TFN to ensure legality across the board.
These are the first few steps of course, but again, with a little perseverance and the right advice, you’ll never look back.