A self managed super fund is a kind of superannuation trust fund that people invest in to save for their retirement. The main difference between SMSF and other super funds is that in the former, members are also trustees of the fund.

Investing in SMSF’s has some costs associated with. A good cost-benefit analysis is preemptive to avoid regrets later.

Here are a few questions to ask yourself before you invest in SMSF:

1. How cost-effective will be the fund?
Owning a SMSF has many fees associated, take for instance auditing fees that comes around to be 1-2 %. So analyze from a financial point of view whether it will be feasible or not.

2. What Opportunity Cost is associated with it?
If you opt for super funds provided by employer, it comes with certain advantages such as a really cost-effective life insurance. Always seek good advice in such matters.

3. Do I have the investment aptitude required for it?
SMSF is generally for people who possess good level of experience in investing. If investment isn’t your cup of tea, you must reconsider your decision to invest.

4. Do I have the information required to manage the fund?
To run a super fund, you need to be abreast of all the latest rules, laws and tax regulations governing supers along with good knowledge of the financial markets. If you doubt, you may want to seek professional advice from someone who specializes in he same.

SMSF’s can be a risky business as unlike in public funds if your SMSF starts losing money, it is almost impossible to get it back. You must understand that the trustee is one person who can make a super fund, a success or failure.

Have more queries? Simply call us on 1300 707 326 or email at [email protected] and we’ll be happy to assist you.