3 SMSF Myths
3 SMSF Myths
Let’s have a look at some Self Managed Superannuation Fund (SMSF) Myths.
Are SMSF’s suitable for everyone?
It may come as a surprise, but SMSFs are not for everyone. So, the next time a friend at a BBQ starts talking about their SMSF, remember that the option to take control of your superannuation needs to be right for your circumstances.
SMSFs are appropriate for those individuals who have the time, superannuation balance, and financial knowledge to seek control over their superannuation.
The average time spent on managing the administration and paperwork, and ongoing monitoring is typically four hours per month for SMSF trustees. Researching investments and keeping up with regulatory changes requires an additional four hours per month on average. This highlights that it is not a set and forget type structure and trustees must have the time to devote to their compliance and investment returns.
MB+M believes that SMSFs should be established based on the provision of quality financial advice that ensure that SMSFs are established ONLY when it’s in the member’s best interests and appropriate for their circumstances, regardless of balance.
Do SMSF’s need $1 million to be cost effective?
SMSFs do not need $1 million to be cost effective. In fact, far from it, we believe SMSFs can start to be cost effective and appropriate with balances far below that figure depending on the individual circumstances of the SMSF’s members.
A starting balance of at least $200,000 is often considered to be the appropriate minimum amount an SMSF should be established with.
Does having an SMSF mean I have to go it alone?
SMSF trustees are likely to need help from a team of professionals to assist them in their journey of saving for retirement.
SMSF advisors work across a broad range of areas of expertise, for example, they include accountants for tax advice, financial planners for investment and strategy advice and SMSF administrators for services to assist trustees run their funds.
SMSF trustees should seek to use the right professionals to get the best outcome for their SMSF. Professionals like MB+M can steer you in the right direction.