Self-managed super mistakes to avoid
Self-managed superannuation funds (SMSFs) are not for everyone - even if your accountant or planner suggests you set one up.
While self-managed super offers benefits such as choice, control and flexibility, Michael Hutton, head of wealth management at HLB Mann Judd Sydney, says they also demand more time, effort and responsibility.
"It is not a 'set and forget' option but one that requires an investment of time and resources in managing the fund.
Generally speaking, people should expect to be more involved and engaged with their superannuation when running an SMSF," says Hutton.
He says that spending a bit of time thinking about what will be required of them if they establish an SMSF can save people money, time and heartache down the line.
He says there are plenty of misconceptions and don't start a self-managed super fund if you:
- have an expectation that the money can be accessed sooner than otherwise allowable. The same accessibility rules apply to SMSFs as other larger funds.
- have an expectation of getting a personal benefit from the superannuation investments for example, a wine buff wanting to buy wine or an art lover buying art. Some of these things can be done, but the complication involved can detract from the effectiveness of the fund.
- expect to buy assets that can be used personally, such as a holiday house or a unit for children.
- be lazy with investments, for example, just leaving funds in a cash account. Make the fund work for you.