Self managed super funds (SMSFs) work like any other super fund but the responsibility of managing it is solely yours (the Trustee). As the members are also the trustees there would be additional responsibilities for all members involved.
Establishing and operating a SMSF is a major financial decision. You would have control and responsibility over all your fund's investment decisions. You must also manage the fund’s legal, accounting and compliance responsibilities.
In order for a SMSF to be cost effective you should ideally have a minimum of $200,000 in your super account. There are considerable costs involved in running a SMSF with regard to legal, accounting and compliance fees.
A SMSF can be set up for up to four members. These members can be your spouse, partner, children, other family members, relatives, friends or a mixture of these.
SMSFs can be time consuming to manage and you will need to have a sound understanding of the investment market to be able to make the most of your investment. You would need to pay ongoing attention to investments, the economy and changes in legislation.
A SMSF is not something that should be entered into without first becoming fully aware of the risks and complexities involved.
For more information on self managed super funds, read our educational bulletin - Does a self managed super fund suit me?
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