Is a SMSF right for me?
Is a Self-Managed Superannuation Fund (SMSF) right for me?
Have you ever thought about setting up a Self-Managed Superannuation Fund (SMSF) but weren’t sure whether it was the right thing to do? Unfortunately, there is no one answer to this question as everybody’s individual situation is different. However, there are three key questions you need to ask yourself before making any decisions.
Why do you need a SMSF?
Don’t ask yourself ‘why don’t I have a SMSF’, ask yourself ‘why do I need a SMSF’. What can a SMSF do for you that a retail or public offer superannuation fund can’t do for you? This might be to give you the flexibility to trade direct shares on a regular basis (‘day trade’), invest in direct property or simply to give you the feeling of greater control.
Another common motivation is people want to invest in artwork, collectibles and / or antiques. Great caution should be shown if this is your motivation as the legislation around these items is extremely strict, not to mention it can cost upwards of 20% to sell these items at auction. Is there value to be achieved by investing this way compared to using managed funds or receiving professional investment advice?
What do you want to do during your hard-earned free time in retirement?
Most people spend their lives working and accumulating savings so they can enjoy their retirement doing those things that make them most happy. This could be travelling, spending time with the family, keeping fit or maintaining an active social life.
A SMSF can be time consuming between keeping accurate records, liaising with your accountant and deciding on appropriate investments. For some people, this is an enjoyable part of retirement – is this you?
Who continues the maintenance of the fund once the dominant spouse dies?
A common issue we see is that a SMSF is established with a husband and wife as the two trustees and beneficiaries of the fund. In some cases, the SMSF was established with only one member of the couple having an understanding of the responsibilities of a trustee. Should this spouse pre-decease the other, they are not only left with the grief involved of losing a loved one but the stress of now having to either maintain a SMSF or obtain assistance to unwind (close) the fund.
As mentioned earlier, there is no ‘hard and fast’ rule when making this decision as every individual’s situation is different. My advice, before you make a decision do yourself a favour and seek personal, professional guidance to make sure that you will receive significant value from a SMSF.
Chris Giaouris, CFP®
Shadforth Financial Group
Chris Giaouris, CFP®
Chronos Private Wealth
Fitzpatricks Financial, Australian Financial Services Licence (AFSL) 247429. http://www.chronosprivate.com.au/
“I believe financial planning is not solely about investments or strategies, but more importantly, it is about helping people make smart choices with their money so they can focus on things more important than money.”
I have been providing wealth management and holistic financial advice to like-minded clients since 2008. This was initially with a boutique firm called Heraud Harrison who were one of the founding firms that later merged to create the Shadforth Financial Group (SFG). I was fortunate enough to create a number of fantastic relationships with clients and colleagues alike, many of those still being in my life today. But in 2016 I decided to leave SFG to build my own boutique practise which would be (and still is) focussed on a client centric and evidence-based approach.
I co-founded Chronos as I wanted to create a fun and vibrant environment for our staff and clients alike. Sadly, for many Australians, planning for their future is something that either finds its way into the “too hard basket” or gets neglected as everybody is so time poor. My goal is to help clients find their ideal lives, whatever that may look like, whilst at the same time simplifying those things that the world loves to overcomplicate for us. Clearly that involves providing clients with advice but not to be forgotten is also providing clients with education – this is equally important in my view.
I hold a Bachelor of Commerce from Deakin University, am a Certified Financial Planner (CFP®) and member of the Financial Planning Association of Australia. CFP® is an internationally recognised mark and is currently the pre-eminent representation of professional Financial Advisors around the world. I am also a proud member and accredited advisor with the ‘RIAA’ or ‘Responsible Investment Association of Australasia’.
As we all know though, life isn’t just about money! I’m a passionate fan of most sports and love to live an active lifestyle, be that in the gym, on the golf course or futsal pitch. I’m also lucky enough to hear so many amazing travel stories from my clients so as you’d expect the travel bug is regularly spreading through my household. I’m always looking to plan that next adventure!
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