The growth SMSFs over recent times indicates that superannuation members are looking to take more control over their benefits and believe that they can produce better results more cost effectively.
The annual cost of running a SMSF can start from as little as $700. This is around 0.2 per cent per annum of your current balance ($350,000) and compares favourably to a managed super fund, which can range from 0.5 per cent to 2.0 per cent. However there are cases where the annual costs have been in excess of $8000, which equates to approximately 2.3 per cent per annum.
So what about considering a SMSF at age 55? Well it’s not too late, as superannuation is a lifetime investment and even if you decide to draw down your superannuation as an income stream, it still requires management. It may be later in life when you do not wish to have the legal responsibilities of being a trustee, to put in the time and effort to run a SMSF and/or the balance has reduced to a point where it is no longer cost effective, that a SMSF is no longer appropriate. In this instance it can be rolled back to a complying public superannuation fund.
There are number of issues to consider when managing your superannuation which apply to SMSFs. To find out your legal responsibilities and what is involved with running a SMSF contact the Australian Taxation Office on 131020 and obtain a copy of the publication Running a self-managed super fund - Your role and responsibilities as a trustee.
If you require further information on financial matters that may concern senior Australians please contact NICRI toll free on 1800 020110, email email@example.com or write to PO Box 1339, Fyshwick ACT 2609. Our information leaflets are also available on our websites www.nicri.org.au © and http://moneymap.nicri.org.au.
Noel Whittaker explains how self-managed super funds work.
SMSFs are often seen as a means to having more control over your retirement savings. ...
How can you calculate how much you will need to cover your living costs?