Pete from Kalamunda writes "My accountant recommended I set up a Self Managed Super Fund years ago. I used to be more involved with the investments but I'm starting to lose interest as I get older. Do you think an SMSF is still the best option for me?"
It's understandable that managing a Self Managed Super Fund (SMSF) can become overwhelming, especially as you get older. Many individuals in a similar situation have found themselves reassessing whether an SMSF is still the best option for their changing needs.
If you're starting to lose interest and find that the SMSF is becoming burdensome, it might be a good time to explore other alternatives. One common choice is transitioning to a regular superannuation fund, also known as an APRA regulated fund. There are several reasons why this could be a beneficial move for you:
Simplicity: Regular superannuation funds are managed by professional trustees, alleviating you from the responsibility of overseeing the fund's operations. This simplicity can be particularly attractive for those looking to reduce their involvement and administrative tasks.
Cost Considerations: Shutting down an SMSF can be more cost-effective in the long run. SMSFs often have fixed costs that may not be justified if the fund’s investment balance does not justify the fees on a relative basis.
Legal Protections: Unlike APRA regulated funds, SMSF are not prudentially regulated and therefore lack certain government protections, such as access to government compensation schemes.
Professional Management: With an APRA regulated fund, professional fund managers make investment decisions based on the fund's objectives and strategy. This can help ensure that your retirement savings are managed in a way that aligns with your financial goals.
Before making any decisions, it's crucial to consult with your financial advisor or accountant to assess your specific situation. They can provide personalized advice based on your financial goals, age, and risk tolerance. Additionally, they can guide you through the process of transitioning from an SMSF to a regular superannuation fund, addressing any concerns or considerations unique to your circumstances.
In conclusion, if you're finding the management of your SMSF to be more of a burden than a benefit, exploring the option of transitioning to a regular superannuation fund may offer a simpler, more cost-effective, and legally protected alternative.
This blog contains general and factual information and does not take into account anyone's individual objectives, financial situation, needs or tax circumstances. We strongly recommend you contact one of our Advisers if you would like personal advice.
Redpoint Investment Holdings Pty Ltd (trading as CY Financial Advice), is a corporate authorised representative (No. 378099) of CY Financial Services (AFSL No. 509648