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You’ve probably heard it numerous times,but your superannuation is one of the most important investments you’ll make in your lifetime. Other than the (fairly measly) pension,your nest egg is all that’s there to support you in the last third of your life,and having a healthy one can mean the difference between a comfortable or slightly strained retirement (not to mention a few overseas holidays).
It’s no surprise then that we pay super funds and their managers multiple millions of dollars to manage this money for us,trusting in the fact that their expertise and know-how will mean our hard-earned is well invested. And thankfully,dud funds are less common than they used to be,though they still exist here and there (use to check if you’re in one).
A self-managed super fund might seem like an attractive prospect,but it is also a lot of work.Aresna Villanueva
Despite this,there exists a bustling industry – worth some $900 billion – of people opting to DIY their super. Known as self-managed super funds (SMSFs),they allow you to pick exactly how your super is invested rather than leaving it to the discretion of your super fund. They also allow you to invest your retirement savings into things super funds usually won’t touch,such as residential property and cryptocurrency.
What’s the problem?
SMSFs have grown in popularity over time,with roughly 50,000 more established since 2017,making up about one quarter of the total super sector. They can also be very lucrative investment structures,with the top ranked SMSF having a whopping
However,they’re also difficult to establish and onerous to maintain,requiring you to follow a range of strict rules around your investments and reporting. They also rely on you being a savvy investor,and while a lot of SMSFs outperform standard funds,a lot don’t.
What you can do about it
Here are some things to know before diving into the world of SMSFs:
Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.