Retirement Savings – How Much Control Do You Have?
The superannuation system is great for all of us. Our employer puts money away for our retirement, money which we never really see anyway so it does not impact our lifestyles. Then, when we retire, we have a massive pool of saved funds which we can enjoy.
One of the things I don’t like though is the way you lose control of you money in the Australian Superannuation Industry. It is getting better, but for me there is still a very big issue here. You generally do not have a big say in how your money is invested. This is why I set up my own DIY Super fund.
All a DIY Super fund is, is a legal structure you can use to manage your own superannuation money. There are a number of responsibilities you must take care of, ensuring the fund meets its obligations in as much as superannuation laws go. Once set up though, you can be as involved as you want and outsource the parts you are not interested in managing. The things that need to be taken care of include:
Firstly, someone needs to be the trustee. The trustee takes legal ownership of and responsibility for the fund, and all the assets there within. Time wise, it is not onerous, its more of a legal responsibility.
2. Administration – The administrator looks after all the book keeping and accounting responsibilities. They will prepare and lodge the annual tax returns and documents and ensure all the accounts balance at the end of each financial year.
c) Audit. Each year your superannuation fund should be audited to ensure it complies with the superannuation regulations. A successful audit will ensure you maintain your “complying” superannuation fund status and can continue to enjoy superannuation tax concessions.
4. Investments – The investment manager makes all the investment decisions, buying and selling investments to ensure the long term financial success of the fund, for the benefit of its beneficiaries. The investment manager must ensure that the investments made, comply with the superannuation laws, regulations and guidelines of the day. Failure to do so could result in a bad audit and the loss of taxation concessions.
Myself, well all I wanted was to make my own investment decisions, live and die by my own sword so to speak. I have always thought this was really important as retirement savings are one part of my entire investment strategy and estate, they are not an isolated pool of funds. The decisions I make here need to be responsible to the big picture and work in harmony with the non-retirement savings investment decisions I make.
I find all the other responsibilities to be very time consuming so I’ve outsourced them. This leaves me more time to analyse my investments properly and make better investment decisions.
Gnifrus Urquart appreciates taking responsibility for his retirement savings, as well as the freedom outsourcing his Self Managed Super Fund Administration affords him.
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