SMSF – The Freedom Of Managing Your Own Money
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 always despise about our retirement industry though, is the way superannuation funds take control of the investment decisions away from me. It is my money, yet I cannot make any investment decisions. The situation has improved over the years, but it is still not good enough. For this reason I set up my own Self Managed Superannuation Fund (SMSF).
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:
Firstly, someone needs to be the trustee. The trustee takes legal ownership of and responsibility for the fund, and all the assets there within. Time wise, it is not onerous, its more of a legal responsibility.
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.
3. Audit – The auditor looks over all the accounts prepared by the administrator to ensure they comply with the existing superannuation and tax law. A successful audit will mean you maintain your status as a complying superannuation fund, so you can continue to receive the superannuation tax benefits.
d) Investing the money. Superannuation is retirements savings. Someone needs to make all the investment decisions within the superannuation regulations, in a way which maximises the future retirement benefits of its members.
Personally, I was just interested in managing my investments. All the rest was outsourced. I just wanted to be able to ensure the investment decisions I made were mine so I could feel responsible for any losses or gains that I made. There is nothing worse than when your retirement investments decrease over a year and you have no control whatsoever in the decisions made. I wanted to avoid this. Also, getting control of this meant that I could make investment decisions giving my whole portfolio consideration and not treat my retirement investment as if it were an island, completely separate of other investments I have. It is all part of my estate after all.
I find all the other responsibilities to be very time consuming so I’ve outsourced them. This leaves me more time to analyse my investments properly and make better investment decisions.
Gnifrus Urquart appreciates taking responsibility for his retirement investments, as well as the leisure time outsourcing his DIY Superannuation Administration affords him.
