Making Sense of Super In A Sea Of Information?

Of all the areas of finance and tax, Super can be the most topical, certainly if you are nearing retirement age.  Compulsory Superannuation was introduced in 1992 and became compulsory for all employers to contribute a certain amount of an employee’s wages to an approved “Superannuation Fund”.

The idea is to have the current workforce pay tax to support people in retirement.  Currently the ratio sits at around 4:1 – four people contributing to one person’s retirement.  But this is changing, and not for the better.

Many Superannuation funds are costly to get into, with costly ongoing fees and costly to exit.  Returns have often been less than spectacular over the most recent years, with many investors seeing their capital diminish, not grow.  For this reason, more and more Australians are opting for a Self Managed Super Fund and taking matters into their own hands, often with great results.

What Is A Self Managed Super Fund?

It is far simpler than you may think.  Technically, a SMSF is a specific type of trust that has certain rules and reporting requirements.  It is an investment vehicle virtually like any other that can invest and grow assets or income ready for any beneficiaries of the trust when reaching retirement.

Simply, you have the option to place your money with the big brand name Superfunds, or you can manage your investments in areas you may understand or prefer or know will grow and outperform the large Superfunds.  The compliance and auditing requirements can all be outsourced to Charltons, just like you might have your accountant finalise your tax papers.

What Can A SMSF Invest In?

There is enormous scope to what a SMSF can invest in.  If you are successful at a certain asset class, you can simply repeat that in the SMSF.

A SMSF can invest in;

• Shares (local and overseas)
• Managed funds (local and overseas)
• Options Trading
• Covered calls (or Buy Write strategies)
• Real Estate (the property cannot have a loan)
• Property Trusts
• Art and Antiques
• Rare Collectibles (like coins, stamps, etc)
• Loans (but not to members or their associates)

How Much Do You Need To Get Started?

This really does depend on you and your level of comfort with successful investing.  You can start with a very small amount at a young age and potentially grow your assets much faster than a large Super fund.

You can roll your entire superannuation amount into a SMSF when you’re ready to begin managing your funds. Charltons can help you to access and collect all your separate superannuation amounts.  You can also nominate your own SMSF under Super Choices to receive contributions

A discussion with you will reveal what options and risks are associated with your individual situation.