An SMSF – is it too late?

Anne wants to know whether it’s too late to consider an SMSF.

An SMSF – is it too late?

Q.I’m 60 years old, still working full time and have around $250k in super. Is it too late to consider an SMSF?

A. There is no real age or threshold for when you should consider setting up a self-managed super fund (SMSF), as it depends on the purpose and stage of life. Many people get caught up in the hype of an SMSF without realising they can achieve the same outcomes with less cost and less effort using a retail or industry super fund.

One of the most significant benefits of an SMSF is that it enables you to tailor the options specific to your needs. Here is a quick summary of some differences between an SMSF and retail/industry super funds:

  • investment choice – most super funds allow you to invest in assets, such as listed shares and managed funds, while with an SMSF you can also invest in property and you are allowed to borrow
  • tax benefits – all super funds provide the same tax benefits, although you can be a little more creative with an SMSF
  • estate planning benefits – most super funds provide tax-effective estate planning, although an SMSF can be more flexible.

A limiting factor can be the amount available to invest. For example, if you have a low balance, say less than $200,000, and you are drawing a pension, then it may be more economically viable to consider a retail or industry super fund. On the other hand, if you are continuing to contribute and will receive new money, such as an inheritance or downsizing a home, then an SMSF may be worthwhile. So it’s wise to review your reasons with your financial planner who can assist you in making a decision.





    COMMENTS

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    Aggie
    5th Nov 2015
    12:18pm
    You do not say what a SMSF is?
    Aggier
    mangomick
    5th Nov 2015
    12:22pm
    If you re-read the answer to the question it tells you....a self-managed super fund (SMSF),
    Adrianus
    5th Nov 2015
    1:15pm
    A SMSF certainly can offer greater control which comes with a more hands on approach, but as many people age, is that what they really want?
    LiveItUp
    5th Nov 2015
    3:00pm
    it's a SMSF for me as I'm not going to let others make mistakes with my money. Way cheaper than other alternatives as well.
    Adrianus
    5th Nov 2015
    3:10pm
    Bonny, have you had anyone mention the inequality with regard to SMSFs? I mean trustees of these funds are having a ball getting much higher returns than those in industry funds. In many cases industry fund members don't have a choice, they are forced into the industry scheme. Is there a case to push for equality? Should industry fund members feel hard done by?
    LiveItUp
    5th Nov 2015
    4:19pm
    If SMSFs didn't exist I would not have any money in super.

    I had a small amount in an industry fund for years that went nowhere so I though to myself this is stupid I can do better myself. So I set up a SMSF myself for a few hundred dollars and transferred it across. It certainly made a big difference as far as the returns are concerned.

    Everyone has a choice so I can't understand why people persist with industry funds. To me it's the old adage you get back what you put in. So do nothing and let others manage it for you then how can you expect a decent return. If industry fund members feel hard done by then they need to do something about it.
    particolor
    5th Nov 2015
    3:30pm
    Don't Drop those Eggs ! :-) They have to last us a Fortnight !! :-)
    The Educator
    9th Nov 2015
    5:11pm
    SMSFs are the worst peforming sector, often due to a heavy bias for Australian assets and ignoring those offshore that had stronger performance in recent years. They also tend to hold cash, which grows very little.


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