A self-managed super fund provides financial payment to the members when they reach retirement phase. An SMSF is a superannuation trust structure in which the members are also the trustees. This offers a lot of control over the assets, but it also comes with a lot of responsibilities as the members are the only ones responsible for running the fund. Other funds are designed in a way that would benefit a lot of members, but one of the advantages of SMSF is that it is tailored to suit the needs of the individuals. This type of fund can have up to four members and the control that they have can be used in order for them to achieve their financial goals.
The members/trustees can choose where they want to invest the money in their self-managed super fund as a way to get their retirement benefits. Funds that you aren’t running are being operated by fund managers, usually, they’ll react much slower to the changes on the market than you will. Running your own fund while being an active investor can reap you many rewards for your retirement days. You can choose if you want to buy or sell assets and if you want to sell them.
With your superannuation fund, you can invest in assets such as property, collectables and shares. But, you need to be careful when managing your fund and you must follow the super laws. Breaching the laws means that you will have to pay a fine, be disqualified as a trustee or if it’s a more serious breach your super fund can be made non-complying and you’ll lose half of your assets on paying tax. This means that if you are planning on starting your own fund, you will have to do a lot of research on what the rules and regulations are. Following the super laws will ensure that you will be able to enjoy the advantages of SMSF without any sort of trouble.
One of the greatest perks of SMSF is that it is divided into three phases, known as accumulation, transition and pension. The accumulation phase is the longest one and it consists of you contributing to the fund. You need to try and accumulate as much as possible. The transition phase is the shortest phase and you can choose whether you want to accumulate a bit more or you want to spend. After the transition you are in the pension phase, you basically spend everything that you have accumulated.