Mes­sage to self: DIY su­per-in­volved

Western Suburbs Weekly - - Business - Troy MacMil­lan on De­sign­ing Wealth Troy.MacMil­

Q: We have been hear­ing a lot about self-man­aged su­per funds and we feel that this ap­proach may suit us but we’re wor­ried about the ad­min­is­tra­tion re­quired. Would you please tell us what's in­volved? An­thony and Tia – Mos­man Park

A: A lot of peo­ple en­joy run­ning their own self-man­aged su­per fund (SMSF) be­cause it al­lows them the free­dom and con­trol that they de­sire with their own re­tire­ment funds

For oth­ers though, it can be a bur­den that they sim­ply don’t need. It’s im­por­tant then to un­der­stand what’s in­volved be­fore de­cid­ing if this ap­proach is ac­tu­ally right for you.

Hav­ing your own SMSF means you, as trustee, have re­spon­si­bil­ity of the com­pli­ance and ad­min­is­tra­tive work, the same re­spon­si­bil­ity as any large su­per fund.

The first step in­volves set­ting up the trust deed cor­rectly, which is essen­tially the rule book that gov­erns how your SMSF will run.

As your trust deed is a le­gal doc­u­ment, you’ll need to have some­one qual­i­fied pre­pare this for you.

The next im­por­tant step is to cre­ate your fund’s in­vest­ment strat­egy, which you must do be­fore you can start in­vest­ing.

Your in­vest­ment strat­egy needs to be re­viewed each year, to en­sure it re­mains ap­pro­pri­ate for you and that all your in­vest­ments com­ply with su­per­an­nu­a­tion law.

Even highly qual­i­fied peo­ple find man­ag­ing an SMSF dif­fi­cult, with some real­is­ing it’s ac­tu­ally the last thing they want to be do­ing in re­tire­ment.

That’s why, if you have any doubts about the ad­min­is­tra­tion in­volved, del­e­gate the work to a pro­fes­sional or keep your su­per in a larger re­tail or in­dus­try fund, where all this work is done for you.

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