Should I own an SMSF?

2 August 2017

By Kelly Wealth Services

Should I own an SMSF?  This is a good question and it’s also a relevant one.  Starting an SMSF can have many advantages but can also hold many disadvantages, depending on the reason for starting one.

Like many people, you have probably read or heard from someone that a Self-Managed Super Fund would give you the control you want and to even buy and own an investment property that you have been dreaming of however, this could spell trouble.

Sometimes questions are more important than answers.

Consider the following:

  • How much money will your SMSF hold and will these funds produce investment returns that cover ongoing administration accountancy and audit fees?
  • If you invest in that dream investment property, will this cause liquidity issues if you desire to draw an income stream from your SMSF?
  • Is your intention to live in the purchased investment property?
  • Are you prepared and do you have the available spare time to perform ongoing administration tasks for your SMSF?
  • Do you desire the high investment flexibility that comes with an SMSF and what will you invest in? Such as selecting your own investments?
  • Will there be more than one member? If so than how will these assets be separated or pooled together?
  • What kind of trustee structure will you use, corporate or individual?
  • Do you have a complex family structure or estate planning needs?
  • Are you self-employed? do you wish to buy your own business premises or have future CGT issues?

Questions such as these are extremely important and could spell the difference between a fruitful SMSF and a bad experience.

  In the book of life, the answers aren’t in the back – Charlie brown

 The Answer

The answer to the overall question, should I own and SMSF, is a difficult one, but one that can be answered by a financial planner.

That said, if you find yourself asking it, I would urge you to make the time, do your due diligence and book a consultation with a qualified financial planner to discuss if it’s appropriate for you and your needs.  It could save you thousands upon thousands of your superannuation balance.

 

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