A self-managed super fund is one of the ways in which you can be able to save your money more so for retirement and other important uses. Some of the other main decisions for these funds are insurances, investments and management of the funds. There are those who can take this as an idea and there are others who can take it as a less idea because they think it adds no value to them. Choosing SMSF as your retirement vehicle is very important but you also need to be aware of the potential negative upfront if there are any. Some of the essential tips that you need to keep in mind when setting up a self-managed super fund are:
Plan for fees
In most of the things that we do in life we have to pay for them if we want to make profits. Setting up or running a SMSF requires money like any other thing. Start-up fees are around $500 but you may be required to pay up to $2,000 if you want to act as a trustee in the company. There are other fees that will be required and that vary including accounting and audit fees but the basic fund for this that you should expect to pay is $3,000 and this is only the starting point.
Know your responsibilities
It is very important for you to know your responsibilities for example it is your responsibility to ensure that you have enough time that you can use to manage your funds properly. It is the responsibility of the trustees to ensure proper investment decisions are made and these decisions should be made in accordance with the agreed-upon investment strategy. The trustees should ensure that the fund is run in compliance with the law. Read more.
Manage your records closely
Record keeping is very important in the management of the super-managed super fund. SMSF relies on a lot of rules and record keeping is one of these rules. Record keeping is very important and requires proper documentation because this is what auditors will ask for when auditing your company. The records should be kept tidy and complete. Some of the main documents that need to be kept properly in this case are tax returns, financial statements and any other vital information relating to the company.
Know the related party transaction rules
Do you know what these rules are? These are rules on how super managed superannuation deals with the related parties. A good example for this is when a super managed super fund owns a property and wants the property to be leased to another member. In this case proper lease should be done and rent needs should be paid at a proper value.
Ensure your fund passes the sole purpose test
It is very important for you to ensure that your super fund passes the sole purpose test. The main aim of this is to ensure that funds are maintained for the sole purpose for which they were meant to and this is mainly to provide retirement benefits. For more information visit smsfselfmanagedsuperfund.com.au