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The ups and downs of self-managed super funds

Before you roll the dice on your super and retirement, here are some important things to know about SMSFs.


Are you game enough

With information so readily available these days, we’ve become a nation of self-taught experts and DIYers. In the past few years, it seems more and more Australians have considered the option of taking their retirement dreams into their own hands through a self-managed super fund (SMSF). But before you roll the dice on your retirement, here are some of the things to know about SMSFs and how they play out.

Click on the tiles below to reveal the often hidden truths behind SMSFs.


Still attractive?

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When it's time for your SMSF to end

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Think about insurance

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Same rules apply

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Know the limitations

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You can't do it alone

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There are obligations

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You're responsible

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Value of advice

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Does it suit you?

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Ask yourself "Why?"

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Weighing up the costs

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1Value of advice

Never underestimate the value of advice. Speak to a financial adviser to see if an SMSF is right for you.

2Does it suit you?

SMSFs don’t suit everyone. You’ll need a sizeable super balance (government and independent reviews suggest a minimum between $250,000 and $500,000), a strategy for your investments, and knowledge about the set up, day to day management and eventual wind-up of the fund.

3Ask yourself “Why?”

The sole purpose of an SMSF is to provide for your retirement. If this isn’t your main motivation for thinking about an SMSF, perhaps you need to think again …

4Weighing up the costs

Costs for running an SMSF are many and varied. They may include establishment, administration, reporting, investment management, regulatory and advice costs and need to be weighed up against the administration and investment fees you’ll pay to a fund like Sunsuper.

8You’re responsible

SMSFs can have four members or less*, with each member required to be a trustee who is responsible for managing the fund, as well as for the consequences of all decisions made. Even if those decisions are made by people you pay to help you run or provide advice on your SMSF. This includes penalties if things go wrong.

* The government has proposed to allow SMSFs to have up to 6 members.

10There are obligations

You’ll need to keep your records up to date, submit annual returns to the ATO, comply with all superannuation and tax laws, arrange audits, and implement and regularly review an investment strategy. Make sure you are across the detail before you jump in!

11Same rules apply

When it comes to putting in and taking out money, the same rules that cover funds like Sunsuper also govern SMSFs. These limit the before and after-tax contributions you can make as well as when you can access the money in an SMSF. Penalties can apply if the rules are broken.

13Know the limitations

As with all super funds, there are rules on what types of assets you can invest in through an SMSF. You’ll also need an investment strategy to make sure the fund diversifies across a range of different assets with clear objectives for the returns you want to achieve to meet the various needs of all members.

15You can’t do it all alone

When you start an SMSF you’ll need to make a choice – to invest the time yourself in running it, or invest the money in outsourcing some duties to others.

Even if you decide to manage your SMSF day-to-day, at some point you’ll likely need to pay accountants, professional administrators, investment managers, auditors, tax agents, actuaries, valuers or financial advisers to help.

17Think about insurance

Insurance cover is a fundamental part of super – protecting you if you don’t make it to retirement. You’ll need to do your research and ensure the insurance cover within an SMSF is right for you and offers value for money.

18When it’s time for your SMSF to end

There may be a point that you decide to turn off your SMSF and roll your savings into a fund like Sunsuper.

When the time comes, you can’t just flick a switch! You’ll need to arrange a final audit, lodge a final return, pay any outstanding tax, and payout or rollover any assets.

20Still attractive?

SMSFs can be a great way to save for retirement – for the right person and considered reasons.

Never underestimate the value of advice. Speak to a financial adviser to see if an SMSF is right for you.

The New School of Super

Listen to Sunsuper’s Dream Team discuss the pros and cons of SMSFs in our latest New School of Super podcast episode.

Listen now

Talk to your financial adviser or get some advice through Sunsuper

The right financial adviser can help you navigate the road to your retirement dreams. To get the conversation started, just fill in your details and we’ll be in touch, or find out about the many ways to get advice through Sunsuper.

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