An SMSF can be a great way to manage your retirement savings, but while there are many benefits to establishing an SMSF, there are many considerations involved therefore it’s not for everybody.
More than 1/3 of Australia’s superannuation money is invested in Self-Managed Super Funds (SMSF). The primary benefit of a SMSF and therefore the reasonable assumption for why the growth in SMSF is so prolific, is control.
A SMSF not only allows you to invest personally but it also can be very cost effective. SMSFs can be considerably more expensive than alternatives when balances are low, however, even when balances are larger, costs can still be higher on average and it depends on the investment strategy employed.
The decision to set up a SMSF should be balanced with ‘Why’ you want to set a SMSF up and particularly ‘How’ you intend to approach your investment strategy. Weighing this up against the costs associated to the strategy and any potential for outperformance the chosen strategy could derive, will then dictate how appropriate it is.
People wanting to operate an SMSF must be looking for a greater level of control to optimise their retirement wealth. They must also be confident in making appropriate investment decisions in the best interests of their fund