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Self managed super funds (SMSFs) – DIY super funds made easy

Here at Utopia in Perth, we’re finding that DIY super funds – or self managed super funds (SMSFs) to give them their correct title – are an increasingly popular option for all sorts of people at different stages in the super cycle. As a retirement investment strategy, they offer a number of benefits. However, there are a host of factors, such as SMSF fees and taxes, to consider before you decide whether a DIY super fund is the best superannuation option for you.

What are self managed superannuation funds (SMSFs)?

An SMSF is a superannuation fund that’s controlled by a corporate trustee, or at least two individual trustees – in each instance there must be fewer than five members, with all members being trustees. No member can be an employee of another member unless they are related.

There are over 420,000 self managed super funds (SMSFs) in Australia now. It has become the investment strategy and savings vehicle of choice for many in Perth and across the country. This is mainly because they offer greater control over investments, tax effectiveness, choice and flexibility, as well as lower operation costs. Added certainty in estate planning is another key reason for the popularity of DIY super funds as an investment strategy.

Why set up a self managed superannuation fund (SMSF)?

  • Because you want specific control over your retirement investment strategy
  • Because you have the time to devote to the task
  • Because you believe you can achieve a superior return
  • Because, once you’ve taken SMSF fees and tax into consideration, it’s more cost-effective than your current superannuation fund

If you’re thinking of setting up an SMSF, you must understand how SMSF fees and tax issues work. There is no point in setting up a DIY super fund if your cost to operate the fund will be more than your current fund. For instance, our team in Perth won’t advise you to set up a self managed super fund (SMSF) with a fund balance of less than $100,000 if your current fund compliance costs less than 2% of your fund balance, as the price of a set of accounts, tax return and audit is roughly $2,000-$3,000 per year for an average balance of $250,000.

More DIY super fund questions?

Take a look at our ‘SMSF FAQ’ and ‘Tips for setting up an SMSF’ pages to find out more. Alternatively, contact our SMSF advisers for a no-obligation super review where you can find out more about self managed super funds (SMSFs) and SMSF fees and tax issues.