Questions to Help You Decide if a Self-Managed Superannuation Fund is Right for You

A self-managed superannuation fund (SMSF) is a fund you can use to take charge of building assets for your retirement. You are in charge of making all the decisions regarding the fund. You should ask yourself several questions before you make the decision to set up a self-managed superannuation fund. This article discusses some of those questions.

What Is the Size of Your Asset Base?

Some people may opt for SMSFs in order to save on the charges that they incur when other people or firms are managing their assets. In such a case, you need to have a sizeable portfolio of assets in order to realize any significant cost cutting benefits. For instance, someone who has an asset base of $1 million may realize greater cost savings than another person who has half that portfolio. This is because some services may be priced at the same cost regardless of the size of the portfolio. Accounting services are an example of a cost that may not vary widely across portfolio sizes. It is therefore prudent for you to start your own SMSF if your asset portfolio is large enough to help you achieve savings in costs. An experienced auditor can advise you on the minimum portfolio size to have before you start your SMSF.

Do You Have the Requisite Skills?

You need skills in different areas like investment and accounting. These skills are necessary so that you can meet all regulatory requirements such as filing tax returns. Talk with an auditor from a firm like Boyd & Associates to learn more about the taxes related to these funds.

The right skills will also enable you to make the best investment decisions, such as which company's shares to buy and at what point to buy those shares. You may have to hire professionals like financial advisors to bridge any skills gap you may have. The fees of hiring those professionals should be put into account before you start your SMSF. 

Do You Have the Time?

Taking matters into your own hands will place an enormous demand on your time. You will need to research different investment vehicles like commercial real estate. You will need time to internalize any changes to the applicable laws governing SMSFs. You will need time to do your bookkeeping. You can hire some people to perform some of those tasks for you, but the ultimate responsibility for every decision will still come to you. Will you have ample time to devote to running the SMSF?

Take your time as you think about the questions above. Consult different professionals like auditors so that their advice helps you to make the right decision regarding your financial future.