An SMSF is your own personal Superannuation Fund that gives you control over how your Super Benefit is invested. An SMSF enables you to manage and be the investor to make your own Investment Choices for your retirement. There is no minimum amount required to setup an SMSF, however it is recommended that you have at least AUS$100,000 because there are regulatory requirements that mean having a reasonable amount will make operating the SMSF easier from a compliance perspective.
It is important your super is kept in the SMSF fund until you reach retirement. You cannot spend it on yourself.
There are a few considerations prior to setting up that you should take into account:
- Are you currently with an industry super fund or numerous funds? e.g. Australian Super? REST?
- Will you continue to keep your industry super fund for some of your super?
- Do you have a plan for investment that you can incorporate into your Investment Strategy? e.g. To purchase property, to invest in certain shares.
- Do you have a history of compliance issues with your personal or company tax?
- Who else will be in your SMSF? Partner? Siblings? Parents? Children? There is a limit of 4.
- Do you have a coherent strategy amongst all members and trustees? Keep in mind all members must also be trustees of the SMSF.
- Do you have an exit strategy for other members of your fund? Especially in the event of changes in circumstances, such as breakdown or breakup.
- Do you have the time to manage the SMSF? The amount of time can vary, up to 5 hours per month or more depending on circumstances.
- Are you aware of the record keeping requirements? Make sure you keep receipts relating to your SMSF for accounting purposes.
- Are you aware of the legal responsibilities as a Trustee? You need to make sure you do not spend SMSF funds on non-SMSF activities.
Additional Resources
The Australian Taxation Office administers SMSFs. They have helpful resources you can find here:
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