If you are well educated about the fund industry or are directly involved in it and is disappointed with the returns that you see with your funds, then you might want to enter into a self managed superannuation fund so that you can be in full control of your funds. With this, you can decide what should be done to the funds rather than leave it in the hands of others. There are actually a lot of people who are now thinking as well as have started with this kind of superannuation. Each year, a growing number of people are choosing to manage their own funds because they know that they can do better. Before you go ahead and setup your own smsf, you should also know the different pros and cons. This will help you to finally decide if you can go do it for yourself or just leave the funds to the other professionals.
First let us take a closer look at the great things that the self-managed superannuation fund has to offer.
- There is lower tax in it as compared to the other. Some of the contributions as well as earnings are only taxed at 15%.
- Full control of where to invest the fund is given to you. You will be the one to decide with what to do with the funds.
- There are many investment options you can consider and you may even have the option to allow opportunity to borrow.
Now that you have known the benefits, let us take a look at the opposite. Here is the downside to having this kind of superannuation fund.
- Although you may think that having control over the funds is a benefit, it can also be a deal breaker to some. This is because it is a responsibility and there are others who cannot commit to doing their responsibility.
- For other types of funds such as a retail fund or an industry fund, the insurance is already included. In this type of fund, you will need to set up the insurance if you want to have one. For some, this is still a lot of work that they are not interested in doing.
So before you commit to having it self-managed, you should first think if you can really bear the responsibility. This responsibility doesn’t just happen in the start of the funds but it happens all throughout the funding process. Experts suggest that people who do not really know much about it is better of having others managed their funds because it can cost them in the near future. However, those who are in this field or those who can devote their time and effort to learn everything they can about this field so that they can succeed can go for this kind of superannuation. It is really up to you to decide because it is your funds that are at risk. If you are confident enough with your skills and if you know you are responsible enough to make it work for you, then go ahead and do it.