SMSF Checklist: Are You’re Ready To Take On A SMSF

In the times of turbulent economy we live in, many of us are concerned about the financial stability in the future, especially for the retirement days. Due to this reason, a growing number of Australians are looking for alternative ways of saving for retirement, (besides the standard pension funds they invest money in). The self managed superannuation fund, or popularly known as SMSF is one of the biggest money-saving trends among Australians.

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Some of the main reasons why more than a half million SMSF funds were set up in Australia include: increased control over the invested assets, possibility to pool financial assets with a family member, possibility to invest the assets of the fund, and earn an additional income to grow the savings in this way, etc.

If you are familiarized with the basic principles of this way of saving for retirement and you’ve learned the strict ATO regulations in respect of setting up and managing the fund; and you are thinking of setting up self managed superannuation fund; but you don’t know whether you are ready for such important step in saving money for retirement, keep on reading and check our SMSF checklist. The simple checklist we’ve prepared includes signs that indicate that you should stop doubting whether to set up an SMSF or in other words, signs showing that you are ready to engage on the exciting challenge called investing in self managed superannuation fund for a fruitful retirement.

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#1 Sign: You Want to Ensure Increased Control over Your Savings

If you want to be included in the decisions around the assets you invest in your future and to be able to decide how your money will be invested and managed through the year before retirement, an SMSF is probably the solution you need.

#2 Sign: You Have a Bigger Amount of Assets to Invest

Investing in SMSF is more profitable when you invest a higher amount of financial assets. If you have more than $100 to invest in the fund, you have no reason to doubt. But if a number of assets is much lower, it would be a better idea to rethink your decision. This is because the small difference in the fees you have to pay. Namely, no matter if you are about to invest $100 or $30, the fees will be nearly the same because they don’t grow as you increase the value of the assets.

#3 Sign: You Have Enough Time to Dedicate on Administrative Work

Managing an SMSF includes a lot of administrative work. This means that to answer properly to all of the responsibilities that come with setting up and managing a superannuation fund, you should commit a good amount of time on administrative work, even if you hire an accredited auditor to help you with managing the fund.

#4 Sign: You Are Aware of The Taxes You are Supposed to Handle

Taxation is one of the segments that require attention to be put on. In fact, to make sure that your fund is compliant to all the tax regulation defined by the Australian taxation office (ATO), and to minimize a number of taxed assets (financial or property), you need to make sure that you understand the tax law and the ATO regulations regarding the SMSF.

#5 Sign: You Understand the Process And the ATO Rules For Investing

Aside from the taxation rules, there are many other rules surrounding SMSF, determined by ATO. For instance there are strict rules regulating the circumstances under which you can make property investments using the assets from the SMSF and under which circumstance you can use the property you’ve purchased. For this reason, it is highly recommended to do a good research and learn about the ATO rules surrounding the process of investing in this fund and using the assets afterward.

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