Knowing the benefits and drawbacks of setting up self-managed super funds

When it comes to planning for retirement, there's no such thing as being too invested or too proactive. It pays to start from an early age with stashing away money for your later years – the sooner you begin saving, the more interest you can accrue and the more comfortable your retirement will ultimately be.

For this reason, self-managed super funds (SMSFs) are a popular option for many active retirement savers, as they offer people a great deal of autonomy over how much they invest and when they do so. If you're considering going the SMSF route anytime soon, it's worthwhile to read up on the benefits of this structure as well as the pitfalls you may need to avoid.

What sets the SMSF strategy apart?

Saving for retirement by using superannuation services is generally a great idea, as it enables you to turn your savings into more money and create a more comfortable retirement for yourself, but there are many ways to do it. So what makes the SMSF model special?

According to the Australian Taxation Office, using an SMSF is a uniquely powerful way to save because with an SMSF, the members of the fund are also the trustees, meaning they're in total control of how much they save and when. This is great because it gives you the power to guide your own financial future; on the other hand, it means you're also responsible for complying with all relevant super and tax laws.

Pay attention to all the ground rules

There are a lot of rules to heed when you're managing an SMSF. For example, the Australian Securities and Investments Commission notes that when you run an SMSF, you're obligated to keep very detailed records on how much you save and when; it's crucial to have this information because audits are frequent and demand your cooperation.

Make sure you have all your superannuation paperwork in order.

Running an SMSF also means you're in control of shaping your fund's long-term strategy for wealth management. This requires sitting down and mapping out the likely outcomes of every potential investment decision. If you're not up to this challenge yourself, consider asking the professionals for guidance.

How we can help at Wilson Porter

Planning for your retirement can be a complicated process, and there's no such thing as getting too much insight from the experts. If you can reach out to chartered accountants with an in-depth level of knowledge of the changing landscape, by all means you should.

At Wilson Porter, that's what we offer. We have a team that's knowledgeable about all aspects of wealth management, but we specialise in SMSF strategy in particular. If there's anything you need to know about the process, all you need to do is ask.