The first step is to understand your responsibilities and the tasks associated with running an SMSF. We suggest you watch and download and read the following guides including our own “A guide to setting up an SMSF” and the Australian Tax Offices SMSF Publications and video’s.
Alternatively you might need to obtain advice on the suitability of setting up a SMSF based on your investment intentions and your retirement objectives in your SMSF. Most SMSF members/trustees, appoint an administration company (such as My SMSF) and often appoint a financial adviser to assist them with their SMSF responsibilities and with investing in their SMSF.
WATCH THE SETTING UP A SELF-MANAGED SUPER FUND VIDEO
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The next step is to consider is your starting balance and the number of members in your fund. This will determine whether setting up a fund is viable given your current super savings, your employer contributions into super, and the ongoing costs involved.
We suggest that $150,000 – $200,000 as a minimum starting balance. Find out if your super is in a defined benefit fund before setting up a SMSF.
Our SMSF Setup advice fee is only $550
An SMSF is allowed 1- 4 members, who are related or unrelated. If you are related you cannot be working in the same business.
* An important consideration with family smsf’s ( children and parents), is an exit strategy, if your children decide to form their own SMSF in the future
Next choose your trustee. We suggest a corporate trustee company, particularly if you are intending on buying property in an SMSF, but you can also setup an SMSF with the members acting as individual trustees of the fund.
These are some of the common tasks associated with an SMSF:
COMPARE THE BENEFITS OF INDIVIDUAL VS CORPORATE TRUSTEE SETUPS
WATCH THIS VIDEO ON THE IMPORTANCE OF AN INVESTMENT STRATEGY
With your investment strategy, identify the asset allocation for your fund, IE: 60% property, 30% shares, and 10% cash. Finally don’t forget to include insurance to cover your loan debts and complete binding nominations so that you can transfer your funds’ assets to your children or to your estate, should something happen to a member of the fund.
For some people setting up and running a SMSF will be easier than for others. The administration tasks, investments and risk management, are areas that most people will need assistance with. It is always best to seek advice if you do not understand what is involved with running an SMSF and remember the buck stops with you.
WATCH THIS VIDEO ON SMSF PROPERTY AND BORROWING