Even when you’re still young, planning for retirement as early as possible is important. This ensures that you’ll be financially secure after you retire. Some people want to manage their own retirement plan or superannuation. It is referred to as self managed super fund (SMSF). While there are many benefits of handling your own retirement fund, there are also several factors that you need to consider.
You should have at least $300,000 for your self managed super fund. You also need to consider the ongoing costs associated with operating an SMSF.
Is SMSF suitable for you? Here are some things to think about:
- If you’re considering to control your super to get the most out of your money, be prepared to invest time and effort so you can properly manage your super. You can get assistance of course, but you’ll be in full control of your retirement plan.
- You should have at least $300,000 for your self managed super fund. You also need to consider the ongoing costs associated with operating an SMSF. These include Australian Taxation Office (ATO) fees, investment fees, as well as annual tax return and audit. You can use a superannuation calculator to give you an idea on how much you need to have.
- If you’re planning to go overseas for a longer period of time, make sure to seek professional advice. Follow the rules and regulations being implemented by the ATO when it comes to extended leave from Australia. Otherwise, you may have to pay large penalties.
- Come up with an exit strategy. Since you’re in full control of your SMSF, you’re also in-charge of setting up an exit strategy in the event that you need to close your SMSF. Bear in mind that there are costs involved in closing your fund.
- There are specialist support providers who can help you in managing your SMSF. Support services are available to assist you with regards to administration and compliance of your fund. Whenever you need someone along the way, you can likewise reach out to an independent auditor or accountant.
These are just some of the things to take into consideration when it comes to self managed super funds. Planning for retirement really does come with a lot of considerations. Take time to do some research and look at your superannuation options. You can also seek retirement advice from family members and friends so you can come up with a well-informed decision.
Got other ideas on self managed super fund and retirement planning in Australia? Share your insights on retirement plans in the comments section.