All you need to know about SMSF: What the heck is that?

People work through their lifespan with a goal to be able to meet and satisfy their basic needs for a descent life, to provide security and stability for them and their families. Once these needs are met, other issues and questions are begging to appear that need to be answered such as how to provide myself a descent life after my retirement?
That’s why there are different pension funds and programs that help people to easily find answers to such questions.

Running your own business as well as people employment involves superannuation obligations. At first glance SMSF acts as something confusing, but essentially SMSF is an abbreviation for Self-managed Superannuation Funds, which is a retirement program that is designed for people in Australia to help them to put aside funds over their working life, and to use these funds after their retirement. 

Fund Registration

Superannuation programs such as SMSF can provide people with more security and stability after retirement. SMSF allows people to have more control over their funds for their retirement. The main difference between SMSF and other types of superannuation programs is that you decide how many members the SMSF will have, and actually the members are trusties of the SMSF, that means that the members establish an SMSF only for their own benefit. Managing a super fund requires attention and responsibility, and there are certain rules that need to be followed. For one fund to be considered as a Self Managed Superannuation Fund it needs to have four or less members, no member is an employee of another member, each member is a trustee. There is also option to have SMSF with only one member. 

When you set up a SMSF you become a trustee of the fund and you have the responsibility for managing the fund according to rules and laws that apply to SMSF, with the sole purpose of providing benefits for the good of all members of the fund. 

Trustee Declaration

The fund can invest in wide range of assets such as shares, direct property, mortgage loans, term deposits, joint ventures etc. For proper management of the SMSF there is a need of a well planned investment strategy that will support the investment decisions and will serve as a guide how to increase the benefits of the members of the SMSF. Generally SMSF is designed to be used after retirement; therefore the most common conditions under which a member can use the benefits of the super fund are retirement, transition to retirement or attaining age of 65.

In brief the Self Managed Superannuation Funds or SMSF is very useful type of fund that has been developed in order to help people to plan on time how to make their living more pleasant after retirement.