How much do I need to set up my own SMSF
and what do I need to know?
The Royal Commission has ignited a lot of talk in the media surrounding Self Managed Super Funds raising more questions than answers
We are not financial planners nor sharing financial planning advice merely quoting sources and or using basic logic in what we are sharing with you
What we do know is that industry funds (generalised) tend to perform at 5% to 7% per annum over the long term + fees, where in your own SMSF you have a wide choice of investment vehicle and can therefore be more hands on with our own Super destiny
NB : It is important to find out what all the fees/costs are being charged to you now wherever your super is being invested. Allows you to compare to what you could be doing and the fees there
There are investment platforms out there where there are no minimums, but before you set up your own SMSF you need to realise that there are some upfront costs for setting up the SMSF and also a SMSF requires annual audits which also cost money
What this means to you and your super is that once you understand the upfront and the ongoing then work out the minimum you would require in super that not only covers your annual audit / accounting fees but also give you returns in excess of average super funds performance
Set up fees could range between $700 and $2,500 depending on complexity and purpose and annual costs for Admin & Audit from around $665 to $1700 for basic SMSF’s and higher for more complex Self-managed funds and some other minor fees
Meaning that the lower the balance the higher the cost as a ratio, thus requiring investments to cover costs and return an ROI you are comfortable with
You will have heard a figure of $200k required by ASIC as a minimum to have your own SMSF, this figure used to be a recommendation and not a legal requirement
If you have an amount you are comfortable with knowing you could achieve the financial return on investment you want then having control and choice over your retirement wealth is imperative to enhancing your retirement goals. This is why there as so many SMSF’s registered with Billions of Dollars under Self Manged Super Funds management
You may encounter negativity from your financial advisor and the media (it’s their job) however an advisor is obligated to put your interests ahead of theirs or the conglomerate they represent, your own research and due diligence will allow you to come to an informed decision
Once again : the amount you have in super, the rate of return you are getting versus what your research indicates you could get, less upfront and ongoing fees should help you determine what is the correct strategy and investment vehicle for you and your family
Other aspects for consideration could include : how best to maximise your wealth in retirement planning, what flexibility do you have and want, the varying investment vehicles available to you giving you a wide array of choice and thus control when comparing where the funds are invested now and what choice, control, flexibility, return on investment and ongoing fees
If you are unable to do the comparisons and calculations speak to your financial advisor and or your accountant or ask us for a referral to a reputable professional who
can assist you so that you can make your very own informed decision of how you want your monies in Super to be working for you
Whilst Planning
Did you know that a major advantage of investing in a property within a SMSF is that you are able to Leverage?
What this means to you and other SMSF members is that you can invest only 20% (or more) yet achieve Capital Growth on 100% of the property value + your tenant will help you build wealth by paying rent and depreciation can be deducted against Super contributions further lowering the tax on contributions
The numbers which are underpinning an investment in property could return you around 10% to 17% per annum – *depending on the type of dwelling, rent, interest rates, deposit, capital growth etc, we can help you estimate the cash flow