DIY Superannuation - How Much Control Do You Want?
The retirement industry in Australia is second to none in the world. It forces us to save money in a very comfortable way, a way that doesn't impact our disposable income, so we all have a big pool of money to live off in retirement.
One of the pitfalls of superannuation for me though is the way you lose control of your money. It is your money, yet often someone (such as your employer and usually due to your own inaction) decides where your money is invested. For this reason, I set up my own Self Managed Superannuation Fund (SMSF).
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.
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.
c) Audit. Each year your superannuation fund should be audited to ensure it complies with the superannuation regulations. A successful audit will ensure you maintain your "complying" superannuation fund status and can continue to enjoy superannuation tax concessions.
d) Investing the money. Superannuation is retirements savings. Someone needs to make all the investment decisions within the superannuation regulations, in a way which maximises the future retirement benefits of its members.
In my situation, all I wanted was control over the investments. I wanted to manage where my money was invested and how much was invested. That way I always knew how much I had in my accounts (as opposed to waiting for the big surprise when my annual statement arrived) and I could feel comfortable knowing that my returns were well earned. They were my responsibility, so in the bad years when my investments fell, at least I wouldn't get frustrated that I had no control. It also afforded me the luxury of managing my superannuation investment as part of my estate rather than as a separate entity. This meant my entire portfolio was significantly more balanced, which is crucial for long term financial success.
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. - 23218
One of the pitfalls of superannuation for me though is the way you lose control of your money. It is your money, yet often someone (such as your employer and usually due to your own inaction) decides where your money is invested. For this reason, I set up my own Self Managed Superannuation Fund (SMSF).
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.
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.
c) Audit. Each year your superannuation fund should be audited to ensure it complies with the superannuation regulations. A successful audit will ensure you maintain your "complying" superannuation fund status and can continue to enjoy superannuation tax concessions.
d) Investing the money. Superannuation is retirements savings. Someone needs to make all the investment decisions within the superannuation regulations, in a way which maximises the future retirement benefits of its members.
In my situation, all I wanted was control over the investments. I wanted to manage where my money was invested and how much was invested. That way I always knew how much I had in my accounts (as opposed to waiting for the big surprise when my annual statement arrived) and I could feel comfortable knowing that my returns were well earned. They were my responsibility, so in the bad years when my investments fell, at least I wouldn't get frustrated that I had no control. It also afforded me the luxury of managing my superannuation investment as part of my estate rather than as a separate entity. This meant my entire portfolio was significantly more balanced, which is crucial for long term financial success.
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. - 23218
About the Author:
Gnifrus Urquart appreciates controlling his retirement investments, as well as the leisure time outsourcing his DIY Super Administration affords him.
posted by X - Men @ 7:53 AM
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