Wol

Has anyone advice of setting up and running a self managed super fund?

Mrs Wol and I took advice and put away cash in Retirement Savings accounts with the Crimminwealth Bank over the last couple of years. They pay a grand 4.5% or so interest - after 15% tax - and we are thinking of setting up SMSFs so as to be able to keep our money in higher rated accounts.

Just wondering if the pitfalls outweigh the financial advantages?

The Bloke

Be safe and see a qualified financial consultant or accountant.

Geelong Gent

I am in the midst of completing a SMSF

Advantages in my circumstances outweight the disadvantages or should I say the hassles involved.

Main concern is the paper work and then having auditors do an annual audit (and subsequent fees). But keeping the paper work trail simple & clear should significantly reduce these costs.

If you PM me your email I will forward details from my financial advisor.

Reasonable

We use Superconcepts (see website) who will provide trust deed and accounting service. We set up SMSF from the day we arrived in Australia. If you are over 60 and have some or all of the fund in pension phase there is no tax on interest earned or fund income or pension drawdowns. You do not need a financial adviser as you could transfer your existing assets into super.
However there are now limits on how much you can contribute to super.

Regards

Paul & June

If you transfer your UK pension to a Australian super can you change it back to UK pension, daft question but if you had to return back to the UK.

Will loose money doing it I know.

Thanks Paul

BATS666

No you can't. It's a one way street.
If you have Oz citizenship tho, you can withdraw the funds in full when you retire and then transfer it to the UK and, for example, buy an annuity to give you a pension in the UK.
Pension funds, however, do not transfer from Oz to UK. Big penalties for closing an Oz super early.

Wol

Thanks - I've emailed them for their booklet.

All my super fund is in a savings account and I intend to remain in cash so the accounting side will be very simple.

I understand that we can both put our pots into a single SMSF: do you know offhand whether the 5% drawdown minimum per annum could be allocated only to Mrs Wol, who has the lowest other income, to reduce tax?

Wol

Thanks - I PM'd you a few days ago.

Wol

I would not be silly enough to act only on advice here, but the whole SMSF concept is so important and so potentially full of pitfalls that any advice would I think benefit most of us.

Has anyone had any nasty experiences with one?

Geelong Gent

I will reply over the weekend mate, havent forgotten

Wol

Cheers GG <g> .

Reasonable

As you are talking about 5% drawdown you must be over 65. This being so any drawdowns are tax free as will be the interest you receive. You would both have to take the minimum though - however it can be recontributed if you have to withdraw more than your needs (provided that you meet the "work test" which is easy to arrange). It sounds as if the accounting fee would be minimal if all your fund is cash.

Regards

Wol

Your first point: not necessarily, one would think about such things well in advance of dotage: however you are correct <g>.

I hadn't heard about the facility to re-invest, which sounds worthwhile in some cases. I am still very much in the early stages of researching SMSFs and, like most things to do with pensions and the tax concessions attaching am very aware of the way that even innocent mistakes can rebound to your detriment!

Buyer Beware

Warning no#1 - there is always a catch to everything and with self managed funds the main catch is that - as trustee of your own self managed superannuation fund you are PERSONALLY liable for the compliance of the fund. This does not apply to non SMSF's. As such, you have to sign a declaration stating that you understand this responsibility. So, if your fund breaks any of the numerous superannuation laws that apply it is you who the regulator will chase (and prosacute if need be). This is one of those "technical fine print" items some accountants and advisers who promote self managed funds tend to glaze over.

Wol

Welcome to the forum. You will end up either wiser or looking for a lobotomy <g>.

Yes, the downside of inadvertently breaking the rules are enough to put you off - but the upside is - in my case - quite a healthy increase in cash over the years.

Unless, of course, they change the rules.

But politicians wouldn't move the pensions goalposts, would they? (Hey, Gordon, you've got it coming....)