DIY Superannuation - How Much Control Do You Want?
The retirement industry in Australia is second to none in the world. It forces us to save money in a very comfortable way, a way that doesn't impact our disposable income, so we all have a big pool of money to live off in retirement.
One of the things I don't like though is the way you lose control of you money in the Australian Superannuation Industry. It is getting better, but for me there is still a very big issue here. You generally do not have a big say in how your money is invested. This is why I set up my own DIY Super fund.
Without making this article too complex, all an SMSF is, is a structure which enables you to manage your own superannuation money. There are a number of responsibilities which come with running your own super fund, you can manage these yourself or outsource them as you see fit. Most of these responsibilities follow:
1. Trustee - The trustee is the legal owner of the assets of the fund. Basically it is the trustee who takes legal responsibility for the fund. If anything goes wrong, it is the trustee who gets the blame.
2. Administration - The administrator looks after all the book keeping and accounting responsibilities. They will prepare and lodge the annual tax returns and documents and ensure all the accounts balance at the end of each financial year.
Thirdly the fund needs to be audited. Each year, it needs to be checked by an independent auditor to ensure you are keeping within the superannuation regulations. This is what will ensure you get to keep receiving your superannuation tax concessions.
Finally, you need to invest the money in a way that responsibly improves the pool of funds for your retirement. The investment decisions have to be within the superannuation regulations as well as the investment strategy as outlined in the SMSF trust deed.
In my situation, all I wanted was control over the investments. I wanted to manage where my money was invested and how much was invested. That way I always knew how much I had in my accounts (as opposed to waiting for the big surprise when my annual statement arrived) and I could feel comfortable knowing that my returns were well earned. They were my responsibility, so in the bad years when my investments fell, at least I wouldn't get frustrated that I had no control. It also afforded me the luxury of managing my superannuation investment as part of my estate rather than as a separate entity. This meant my entire portfolio was significantly more balanced, which is crucial for long term financial success.
All other responsibilities I outsourced. To me, they were time consuming tasks which were better undertaken by experts in the relative fields. This left me with more time to research and make investment decisions. - 23223
One of the things I don't like though is the way you lose control of you money in the Australian Superannuation Industry. It is getting better, but for me there is still a very big issue here. You generally do not have a big say in how your money is invested. This is why I set up my own DIY Super fund.
Without making this article too complex, all an SMSF is, is a structure which enables you to manage your own superannuation money. There are a number of responsibilities which come with running your own super fund, you can manage these yourself or outsource them as you see fit. Most of these responsibilities follow:
1. Trustee - The trustee is the legal owner of the assets of the fund. Basically it is the trustee who takes legal responsibility for the fund. If anything goes wrong, it is the trustee who gets the blame.
2. Administration - The administrator looks after all the book keeping and accounting responsibilities. They will prepare and lodge the annual tax returns and documents and ensure all the accounts balance at the end of each financial year.
Thirdly the fund needs to be audited. Each year, it needs to be checked by an independent auditor to ensure you are keeping within the superannuation regulations. This is what will ensure you get to keep receiving your superannuation tax concessions.
Finally, you need to invest the money in a way that responsibly improves the pool of funds for your retirement. The investment decisions have to be within the superannuation regulations as well as the investment strategy as outlined in the SMSF trust deed.
In my situation, all I wanted was control over the investments. I wanted to manage where my money was invested and how much was invested. That way I always knew how much I had in my accounts (as opposed to waiting for the big surprise when my annual statement arrived) and I could feel comfortable knowing that my returns were well earned. They were my responsibility, so in the bad years when my investments fell, at least I wouldn't get frustrated that I had no control. It also afforded me the luxury of managing my superannuation investment as part of my estate rather than as a separate entity. This meant my entire portfolio was significantly more balanced, which is crucial for long term financial success.
All other responsibilities I outsourced. To me, they were time consuming tasks which were better undertaken by experts in the relative fields. This left me with more time to research and make investment decisions. - 23223
About the Author:
Gnifrus Urquart enjoys controlling his retirement savings, as well as the leisure time outsourcing his DIY Super Administration affords him.
posted by X - Men @ 10:11 PM
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