Introduction to SMSFs

Introduction to SMSFs

Many people consider superannuation to be a different type of investment than the ones they make in their own name. Not so.

The investments you make via your super fund are almost identical and behave in the same way.

Planning for retirement is a long-term strategy. Individuals who plan throughout their life and into the non-working phase of their life, will usually be much more successful in achieving their goals than those who make the decision to save nearer to retirement. There are many reasons for this, including the effects of compound interest, the capacity to save more in the good times and the ability to access a variety of investment opportunities that arise over a longer period of time.

Superannuation funds can invest in property, shares, collectables, and cash in the same way as other investors. The main difference is that superannuation is taxed at a lower rate than earnings from investments made by individuals or by using trust or company structures.

Self Managed Superannuation Funds (SMSFs) are a unique type of superannuation fund. As an SMSF member, you’re in control of the fund’s investment, administration and management. This means you’re also in control of your retirement. Talk about liberating!

You, the SMSF trustee, will run your fund like a regular superannuation fund: receiving contributions, investing members’ contributions and making them available to members as lump sums or pensions when they meet a condition of release such as retirement, death, or incapacity.

Remember, an SMSF is a trust. All trusts have a trustee who is responsible for the operation of the fund and to formulate and implement an investment strategy. This means you’re 100% responsible for the fund’s affairs.

Superannuation is governed by the Superannuation Industry (Supervision) Act 1993 in conjunction with the Superannuation Industry (Supervision) Regulations 1994 (commonly referred to as the SIS Act and SIS Regulations).