In most cases, people like to be in control of their finances, as this gives them the power to do whatever they wish with them.
The good thing is that a self-managed super fund (SMSF) helps individuals fully manage and control their funds.
Unlike other super funds, where a fund manager determines the dimensions of your investments, with an SMSF, you are at full liberty to invest your superannuation savings in a way that aligns with your financial goals.
Why you should consider setting up a self-managed super fund
Setting up a self-managed super fund will give you a lot of benefits that can’t be overlooked, and some of these benefits are as follows:
1. Greater control
Setting up the SMSF gives you the freedom to invest in lots of assets and manage your funds.
It will give you full access to the fund, be it properties or shares, allowing you to invest towards your goals.
When it comes to investments, it will allow you to manage your superannuation savings actively for better returns.
2. Tax benefits
Through a self-managed super fund, you will be free to claim tax deductions for specific contributions to the refund, enabling you to reduce taxable income.
You can reduce these incomes and have your tax growth deferred for a future retirement withdrawal.
3. Estate planning
Do you want your family included in your self-managed super funds? If so, you can add them as members at your whim and have them access your financial benefits in the future.
If you’ve added your family as your beneficiaries, they will be able to receive your wealth in the most tax-effective way.
4. Other potential benefits
Setting up a self-managed super fund will help you save a lot as it is cost-effective compared to other traditional super funds.
It will also give you an opportunity to reduce risks for the assets you want to invest in, which could potentially increase your returns.
How to set up a self-managed super fund
Are you thinking about setting up a self-managed super fund? If so, these are the steps you can use as a guide below;
1. Appoint a trustee
Setting up a self-managed super fund requires you to appoint a trustee, at least one or more, depending on your preference.
Ensure that the ones you opt for have met the ATO requirements before proceeding with them. Also, include one that is corporate for administrative ease.
2. Establish a trust deed.
Establishing a legal document specifying your fund’s objectives and trustees’ responsibilities, amongst many other needs, is the right way to go.
Have one that will fully govern your SMSF, and seek legal advice from a professional to guide you in compliance with superannuation laws.
3. Register with ATO
Registering with the ATO government portal is another thing you need to do.
You must submit necessary documents to ATO, such as ABN, fund names, and trustee details.
The ATO will issue you a tax file number (TFN) for your SMSF upon registration.
4. Open a bank account.
It is always important to separate an account dedicated to SMSF from your personal accounts.
This will help avoid confusion, and in order for that to happen, you may consider giving it a name to segregate fund assets.
5. Appoint an auditor
Always consider appointing a registered tax agent such as KSH TAX to act as your SMSF auditor.
This will help you review and fund your financial statements and ensure that you lodge complaints with the relevant authorities.
6. Develop an investment strategy.
Planning yourself strategically can help you stay in line and avoid risks that may save you from financial setbacks and goals set.
It’s always advisable to consult with your financial advisors for a suitable and well-drafted investment plan.
7. Maintain proper records
Keeping records of all your moves and financial transactions, among other activities, is helpful.
You may need the records to prepare financial statements and lodge them with the ATO for compliance.
Conclusion
An SMSF is a powerful tool for superannuation management and financial goals. Above all, it requires careful planning, ongoing administration, and compliance with laws. Contact us and let us assist you set up your super fund. We offer free consultation with a dedicated accountant to help you through the whole process with ease.
