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Control your superannuation
The fastest-growing slice of our retirement savings sector also can be the most dangerous for people who don't play by the rules.
Self-managed superannuation funds (SMSFs) have enjoyed spectacular growth over the past decade, yet tough penalties enforced by the Australian Taxation Office can wipe out half your nest egg if you deliberately flout the SMSF laws.
SMSFs also can be the most flexible way to save for retirement, and the most enjoyable for anyone who loves to control their cash.
The chief executive of the Self-Managed Super Fund Professionals' Association of Australia, Andrea Slattery, says about 2,500 SMSFs are opening each month.
She says the sector has been delivering better investment returns than the overall superannuation sector. Illustrating their popularity is the fact there now are 458,000 SMSFs operating in Australia. 'We have gone from about 15% of a $350 billion market eight years ago, to 32% of a $1.34 trillion market today,' Slattery says.
There is plenty to learn before getting started, and the homework never ends for an SMSF owner, who also is known as a trustee.
WHAT ARE THEY?
A self-managed super fund is a small fund to build retirement savings for between one and four people, says Bruce Wigan, a superannuation division partner at HLB Mann Judd.
'The fund is controlled by trustees/directors, who are also members. The members decide how the fund will operate and what investments the fund will invest in,' Wigan says.
Read the full article to find out:
- why you should start an SMSF
- how to start an SMSF
- how much money you need to start an SMSF, and
- a few SMSF tips and traps.
Reproduced in part with permission: www.news.com.au, Control your superannuation 29 January 2012.