The Sexiest Money Topic: Part 3 (Must Read for 35-65 year olds)

A little bit late to the party, I know, normally I blog at least once a week, however I would like to ask for forgiveness to those that wait for my blog releases every week.

The last two weeks, I have had two exams that I have been studying for like crazy, one on superannuation and one on macro-economics. Not to mention, I just started a new role as a client relationship manager, whereby I will be helping an advisor to implement their client’s strategies and completing admin tasks for them.

Therefore, I hope you can understand why I have take a short and unexpected hiatus from blogging and giving you the education on the sexiest money topics ever…

Superannuation, we can all agree is not actually all that sexy or interesting for some, however, it is one of the biggest drivers and tools used to help you to achieve retirement!

However, superannuation can be super complex and there are a lot of laws and regulations that encompass the industry. Therefore, if you have not already, it is best to start at part one and part two of this little super series, if you have not already read them.

Now that you have read those, let’s begin…

Self-managed super funds (SMSF) are essentially a fund that is owned by its own members, meaning that all the members within the fund are responsible for returns, compliance and mostly to meet the sole purpose test, which all super funds are primarily made for.

(Sole purpose test is legislated under the SIS Act 1993, whereby all super funds sole purpose is to provide benefits upon meeting a condition of release, ie; upon turning 65 years old, retiring or death. Which is a core purpose, there are also minor purposes as well.)

The main reasons you would look at taking on the management of your own superannuation is if you had significant sums of money under management within your superannuation and wanted to take control of your own investment strategy, rather than rely on the strategies of bigger superannuation funds.

Another reason is if you wanted to invest your super into other alternative methods of investment, such a crypto or art/paintings, real-estate, and you would even be able to buy the premises you currently run your business out of as well, depending on whether conditions are met.

Hence, there are a heap of reasons why you may want to look into a self-managed super fund (SMSF), however there are also a heap of disadvantages as well…

Such as, the time it takes to manage and meet compliance of running your own SMSF, the risk of persecution for not meeting compliance, the do it yourself investment losses that could come with not have diversification… etc.

I would highly recommend that if you are interested in looking into self-managing your own super, you should look into acquiring the help from a trusted advisor who specialises in SMSF’s, as they will have all the up to date regulation knowledge and also which product may suit you best.

So when is a good time for you to look into a SMSF?

A general rule of thumb is if you have more than $500,000 under management within your superannuation, you may want to start looking at a SMSF. However, if you do not want the extra burden of running your own fund, but still want the extra benefits, a small APRA fund may be more beneficial. Again, best to talk through your circumstances with a trusted Financial Advisor.

Now, you may have just read all three parts of the superannuation series and gone, that is all super confusing…

Which is completely fine, super is confusing, convoluted and full of potential mis-haps if not done correctly from the start.

(And I have only gone through the very basics of superannuation, the must knows for anyone who lives and works within Australia.)

That is why it is recommended that if you are either earning a full-time wage, looking to buy a home/start a family, retiring in the next fifteen to twenty years or just want to minimise tax, you should seek out a trusted financial advisor.

You will seriously reap the rewards later down the track and it will help you to Take Back Control of your wealth, and consequently, your life at the same time.

Until next time,

Take Back Control

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Disclaimer:

The information on the Take Back Control Website is intended to be general in nature and is not personal financial product advice. It does not take into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs. In particular, you should seek independent financial advice and read the relevant product disclosure statement (PDS) or other offer document prior to making an investment decision in relation to a financial product (including a decision about whether to acquire or continue to hold).