Self-managed superannuation is the popular term for what used to be known as ‘super funds’ – a way for those with some disposable income to save for their retirement. It’s about managing your own money, in your own hands and having the power of choice to do what you want with it. Get these pros and cons in order to assess if it’s right for you.
Self-managed superannuation funds (SMSF) are a type of superannuation fund where the members are also the trustees. This means that the members have control over how the fund is managed and invested. The main advantage of having an SMSF is that you can tailor your investments to suit your own personal circumstances and goals.
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For example, if you are nearing retirement and want to minimize your exposure to risk, you can adjust your investment mix accordingly. Another benefit of SMSFs is that they can provide flexibility in how benefits are paid out. For example, you can choose to take a lump sum or an income stream, or a combination of both. This can be helpful in managing tax liabilities in retirement.
Finally, SMSFs usually have lower fees than comparable retail or industry funds. This can make a significant difference to the overall performance of the fund over time. If you are considering setting up an SMSF, it is important to seek professional advice to ensure that it is the right option for you.