With all the advancement in technology, we are facing rapid changes in our everyday lives. Though this leads to simplification, more often than not certain changes seem to be adding more to uncertainty than to actual quality of life. For instance, much of the machinery in industries created lesser need of human assistance. Along with the fear of being made redundant, there is also the fear of legal changes.
In recent years especially, retirement age has undergone considerable changes. While in the past people worked well over their 70s, retirement age worldwide nowadays averages at 65. In some countries it shifts lower, in others it increases. To live a stress-free life without the worry of future, it is advisable to think of your retirement days. The best strategy in the long run is investing in an SMSF (Self-Manages Super Fund), so it is not surprising the number of Australians using this option as a retirement money strategy keeps increasing. There are now about 600,000 functioning self-managed super funds.
If you are interested in taking part of such a strategy, there are certain things you should know to be able to carry it out successfully. As first you have to be clear on what SMSF means at its core. What makes this fund so reliable and separates it from other kinds of funds is that you get to be a trustee, or simply said you have a say in your super fund (as we can conclude from its name). To set an SMSF you have to decide on the type of lifestyle you will have post-retirement. If you intend to live a more comfortable lifestyle, you have to bear in mind to add more to your fund. You can include other trustees in your fund and have up to four members. If you plan on it being a single member fund, you still have to include a trustee more, with one of you appointed as a fund member.
The great thing about SMSF is that even if you are self-employed, with this type of superannuation personal contributions can be added to the fund. You can also use personal contributions as the ideal way to save some more for rainy days. Depending on your income, you can claim your superannuation personal contributions on your tax return at the concessional rate of 15%. In the case of lower income, you may be eligible to co-contribution from the government in the amount of $500 for your fund.
Each member of the fund has legal obligations to cover. Everything has to be in compliance with ATO (Australian Taxation Office) regulations, and to be on the safe side you have to sign the trustee declaration. Unlike with other funds, with the SMSF you have the option for investments (such as property or international shares), as long as it is all for the benefit of the fund and not individual trustees because after all the funding is for post-retirement purpose and not prior to it.
If you are not sure you have the right skills to do the managing yourself, you can always hire a licensed adviser and leave matters in safe hands (while still maintaining control over the fund).