FAQs on Self-Managed Super Funds
FAQs on Self-Managed Super Funds
Before you set up your own self-managed super fund (SMSF), there are important issues that need to be considered. Here are three Frequently Asked Questions (FAQ) in regards to SMSF:
1) Can you separate your personal account from your self-managed super fund account?
Using your SMSF assets to purchase properties for personal use may result in non-compliance from the superannuation regulatory board and the superannuation laws. It is best that you seek advice before purchasing any asset using your super funds to avoid penalties and fines.
2) Do you have the financial skills and knowledge to manage your super fund?
As a member of the SMSF, you also play the role of the Trustee of the fund. Therefore, you control the investment strategies e.g. where to invest the funds, how much fund to allocate in each investment. You need to dedicate time in managing your super funds and if youre not well-versed on the mechanics of investing and superannuation, you should think twice about setting up your own fund. You may have to consult a licensed financial planner to get you started or better yet, hire an independent investment adviser to guide you through the process until such time you can manage the fund on your own.
3) Does the SMSF rake in more returns as opposed to investment-related expenses?
Usually self-managed super funds have fixed rates per annum as compared with commercial funds. This could save you money on fees in the long run. But then you have to consider the balance of your super fund because it may not be the cheapest option. So again, you need to study the pros and cons of the costs in setting up your own super fund.
