A Self Managed Super Fund or SMSF is a legal, regulated tax structure for accumulating wealth during your working life in order to either fund, or assist in funding, your retirement.
Currently in Australia there are approximately 600,000 SMSF’s with almost 1.1M members. SMSFs control assets of close to $750B, or almost a third of all superannuation assets.
Contributing to or holding assets in an SMSF affords the investor favourable tax treatment opportunities but it comes at the cost of strict compliance and individual liability for the member trustees.
An SMSF can have up to 4 members, and all are equally responsible for making sure that the fund complies with superannuation and tax legislation. Harsh penalties are imposed for going outside the guidelines.
Australia’s ageing population makes the welfare burden unsustainable. Compulsory super contributions are an investment for the future and a deliberate measure to ease the burden on the government’s purse strings.
How those contributions, compulsory or voluntary, are invested depends on whether you to choose an industry or retail fund or undertake to do it yourself by setting up and running an SMSF.
SMSFs are established for the sole purpose of providing financial benefits to members in retirement and their beneficiaries. They have their own Tax File Number (TFN), Australian Business Number (ABN) and transaction account, for contributions and rollovers to be paid into, make investments and pay out funds to beneficiaries.