Pros and Cons of Setting Up Your Own Self-Managed Super Fund (SMSF)

Many of our home loans in the Rockingham area are for people who have set up their own SMSF and are buying an investment property. Setting up your own SMSF sounds like a great idea at first but we recommend doing your due diligence and making sure that setting up your own SMSF is the right thing to do for your situation.SMSF

We would like to present some arguments for and against setting up your own SMSF, to help you make an informed decision. On the positive side A SMSF allows you to take control of your super fund. Many Australians are disappointed by the slow growth of their super funds and the management fees that are deducted from their accounts.

Self-management allows you to know exactly what your money is doing at all times. SMSFs also allow you to diversify in areas that fund managers often miss, such as collectibles, art, and of course investment properties. Also it saves you money to manage your own fund if you are capable of making the correct decisions. You save money by not having to pay a fund manager, which gives you a lot of “wiggle room” to create more profit for your nest egg. A SMSF also has benefits for your family if they are also members and can help simplify and maximise your estate.

The rules for an SMSF are different from the rules for any other fund and can save you money in taxes and fees when it is time to transfer your money to the next generation. Most of all, a SMSF can help you control your own destiny. For many, this control is worth more than the money you may or may not save. On the negative side Managing a SMSF can be very time consuming.

It can also be expensive at first, because start-up costs, auditor reports and platform and brokerage fees can be prohibitive if you do not have at least $250,000 in your SMSF. Also, you are fully responsible for your decisions. If you accidentally do something illegal, you will pay for it. The verdict Your own SMSF will work but only if you have the time, skills,and patience to do it right.