SMSF Guide: Should I consider an SMSF?

Before answering whether you should get an SMSF today or save it for later, it’s worth enumerating the benefits and its possible drawbacks.

But first, let us briefly discuss what an SMSF is and why more Australians are setting up their own self-managed super fund.

Understanding what an SMSF is and its benefits

Self-Managed Superannuation Fund, or SMSF, is a private super fund that you manage yourself. Often, it is a way of saving for your retirement. But some use the fund for other reasons like making larger investments. SMSF is regulated by the Australian Taxation Office.

There are good reasons why SMSF is a rapidly growing super section in Australia. The most common reason is the freedom it gives to make quick adjustments with your portfolio when there are market changes or sudden investment opportunities.

But SMSFs offer several features and benefits that are not generally available with other super options.

SMSF benefits

  • More investment options

Listed shares, residential and business property are some of the investment options available in an SMSF. 


  • One fund for family members or partners

SMSF lets you add up to three members to combine your superannuation assets with. They can be partners or family members.

This feature enables you to invest in higher-value assets, achieve greater estate planning flexibility, and reduce funds costs.

  • Borrow to make larger investments

Planning to invest in larger assets like shares and properties? This is possible through borrowing funds if you are an SMSF member. However, you must be aware of the risks included as well as the rules you need to follow when borrowing.

Remember that it is always best to seek professional assistance if you are unfamiliar with the ins and outs of borrowing funds.

  • Flexible tax strategies

With the right tax strategies, there is an opportunity to grow your super savings while reducing tax payments. You can take greater control over the timing of tax events with SMSFs.

For example, you can start a pension without triggering capital gains tax when your superannuation assets move into the pension phase.

You may also opt to transfer assets that you own into your SMSF.

  • Greater estate planning certainty and flexibility

You can nominate who you would like to receive your superannuation assets when you pass away, without having to meet some of the constraints that apply to other super funds.

Should you consider setting up your own SMSF today?

Like other financial investments, there are key considerations you need to ask to assess your readiness.

Some of these questions may require time to answer or review your finances.

Take time to carefully understand your financial standing by answering these questions as accurate as possible.

  1. Why should I establish an SMSF?

Be clear with your SMSF goals. These goals will be your guide to your investment strategies, especially when you are preparing for retirement.

  1. What trustee structure will I use?

There are two trustee structures you can choose from.

Individual trustees are the most common because it is cheaper and easier to setup. However, more than one trustee is required in this structure.

A corporate trustee requires each fund member as a director of the corporate trustee. It is also required that every director of the corporate trustee must be a fund member. No member of the fund can be an employee of another member unless they are relatives.

  1. Who will be my trusted partners?

The requirements for fund members and trustees vary, depending on the trustee structure you select. You also need to be cautious of the costs when changing members of your fund, as well as the amount of time and paperwork to process the changes.

More details on the requirements will be discussed in another post.

  1. Do I have sufficient funds for the administrative costs?

As a fund member, you need to anticipate other costs that will incur when setting up your SMSF. These include accountancy fees, audit fees, legal expenses, and more. Some SMSF expenses such as upfront fees incurred in investing money are not tax deductible.

It is best to have some liquid assets to meet these costs.

  1. Do I have the time and skills to manage my SMSF?

You will need enough time, knowledge and skills to manage your own super, as well as meet your legal and other obligations.

It can be intimidating at first glance. But with the help of an SMSF expert, you will gain an advantage in controlling your SMSF.

Are you ready to setup your self-managed super fund?

Our team is here to help you get started.

Feel free to send us a message regarding your SMSF questions and we are happy to respond as soon as we can.

The information contained on this SMSF guide is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice.