SMSF Setup: Tips For Establishing a Self-Managed Super Fund

Setting up a Self-Managed Super Fund (SMSF) is a great way to take control of your financial future. Having said that, it’s also a lot of work, and managing investment decisions isn’t for everyone.

If you’re committed to taking on this task, you’ll enjoy some great perks, but you’ll also need the right knowledge and people on your side to make things work smoothly. With that in mind, we’ve put together this list of tips for establishing a Self-Managed Super Fund so you can get started on the right foot.

#1 – Speak to an Expert

The first and most important step is to find an SMSF accountant. Unless you’re properly qualified to handle the intricate financial details yourself, you will need a professional on your side to ensure you’re both compliant with all requirements and getting the best returns possible. 

#2 – Get the Paperwork Sorted

The next thing you’ll need to do is get all the paperwork and documentation sorted. You may need a solicitor for this step as the process is rather complex, and there are many aspects where a small error could hold up the entire process or possibly even prevent you from moving forward with your plans. 

#3 – Set Clear Goals

Once you’ve got the foundation laid and are legally allowed to start handling your own super, it’s time to get clear on your financial goals. There are a lot of things you’ll need to consider, so it’s a good idea to work backwards when establishing your plan.

The best way to do this is to determine how much money you’ll need to retire comfortably and then set milestones along the way to ensure you’re tracking to meet this goal.

Once you know how much you’ll need to have invested in your SMSF at each stage in life, you’ll be able to set smaller goals that support your strategy to get where you’re going.

#4 – Diversify Your Assets

Its generally recommended to diversify the assets within your Self-Managed Super Fund sufficiently to provide a buffer against anything which could have a negative impact on your balance. For example, you may want to hold a mix of shares, interest-bearing assets, ETFs, commercial property in Melbourne and cash to help spread risk. 

The exact breakdown of your assets can be worked out with a financial advisor who will be able to assess your individual goals and circumstances to come up with the right portfolio for you. 

#5 – Take Out the Appropriate Insurances

An often forgotten part of the puzzle when setting up an SMSF is insurance coverage. When you’re with a large fund, you’ll generally automatically have insurances included as part of the product, but if you’re going it alone, you’ll have to take them out yourself.

#6 – Remember to Keep on Top of Your Taxes

Tax breaks are often offered to individuals who contribute extra to their super. Any other applicable taxes are usually handled by either your employer or the fund, depending on your sources of income. In such circumstances, it can be easy to forget your taxes. This can land you in hot water with the ATO, so you need to factor these things in. 

Being in control of your finances is one of the best ways to ensure your future security, but the process is a little more complex when it comes to your super. 

MORE – Money: 10 Tips On Hiring A Tax Planner

MORE – Work: Everything You Need To Know About Tax!

No Comments

Leave a Reply

Your email address will not be published.