Over the past decade, SMSF has been one of the fastest growing, reliable and trusted retirement investment option for all Australians. The flexibility of this fund give members the freedom to control the assets and investment decisions. SMSF is designed for those who are committed and informed. In some sense, it is the most efficient way to save for your retirement.
These are just some of the many reasons why SMSF has become the most attractive way to invest in the future and create more wealth. If you are not sure whether it is the right option for you, take a look at its advantages and disadvantages.
Advantages Of SMSF
- Greater Control – SMSF gives you the ability to control your investment strategy. However, as a trustee, you need to develop an appropriate investment strategy that will ensure benefits not only for you, but for other members as well.
- Flexibility – Another of many advantages of SMSF is its flexibility and freedom to invest in a range of assets. You can invest in direct property, managed funds, bank property, direct property, etc. What’s important is the fact that you can easily modify and switch your investments as you want.
- Cost Savings – As a trustee you have the ability to control and operate your fund. You can manage your overall investment strategy and take into account all possible risk assets.
- Free set up – Nowadays, there are many superannuation warehouses which provide a free set up service in order to make it easier for you to start your SMSF. This is just one of the many advantages of SMSF you can benefit from. The important thing is to find a professional you feel comfortable with and the one that has required SMSF experience and knowledge.
Disadvantages Of SMSF
- Responsibility – The first and main disadvantage of an SMSF is that all the important decisions depend on you. This means that you are in charge of the responsibilities related to controlling and managing of the fund.
You must comply with certain ATO rules and ensure your fund meets the requirements at all times. Therefore, you need to be up to date with everything related to SMSF.
- Limited Ability To Modify Investments – Besides the fact that you are able to invest in many assets, as a trustee you may not have enough money for diversity. So, you will need to control, manage and monitor your fund all the time.
- Expensive – SMSF is not designed for everyone. Depending on your desired investments and the received consulting assistance, it may be expensive for you to maintain the fund. So, before setting up an SMSF, consider both disadvantages and advantages of SMSF.
- Time -Consuming – Know that managing an SMSF is quite time-consuming. Beside professional administration help, you will have to plan, manage and control all your investment.
To find out more about setting up an SMSF, its main advantages and disadvantages, please contact a professional financial adviser.