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Five tips for creating a successful SMSF

There are many advantages to having a self-managed superannuation fund (SMSF). Increased flexibility and control over your savings are the most obvious benefits, with many SMSF trustees and members appreciating the ability to make their own investment decisions.

Here are five tips that can help set your SMSF up for success in 2016:

 Have a written investment strategy and review it annually
While having an investment strategy is mandatory for all SMSFs, not having one that is adequate enough is a common mistake among most SMSFs. An SMSF’s investment strategy should be specific and suitable for all members of the fund, including adult children or younger spouses whose investment goals may be different from a retiree.

Don’t mix personal assets with your super fund’s assets
Trustees need to manage their fund’s investments separately from member’s personal or business investments and ensure that the fund has clear ownership of its investment assets. To protect fund assets in a creditor dispute  and prevent costly legal action to prove who owns them, assets should be recorded in a way that:

Make sure your fund is compliant
Never forget that you are the person who is in control of your fund. With that control, comes responsibility. You are responsible for ensuring that your trust deed is up to date, your tax returns are submitted on time, your binding death nominations are up to date (or reversionary), your contribution caps are in line with laws and minimum pensions are drawn if in pension mode.

Learn as much as you can
Education is always beneficial when it comes to looking after your money.  There are many websites that have publish information designed to help individuals better understand their SMSF or potential SMSF.

Seek professional advice
If you’re having problems with your SMSF, or you don’t understand how it works, it is important to ask questions. Professional advice can be quite valuable as you learn how to manage your money in the most tax-effective and effective way possible. Always remember that there is no such thing as a silly question when it comes to your money.

Posted on 17 February '16 by , under Super.

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Transition to retirement

The transition to retirement (TTR) strategy allows you to access some of your super while you continue to work.

You are able to use the TTR strategy if you are aged 55 to 60. You can use it to supplement your income if you reduce your work hours or boost your super and save on tax while you keep working full time.

  • Starting a TTR pension: To start your TTR pension, transfer some of your super to an account-based pension. You have to keep some money in your super account so that you can continue to receive your employer's compulsory contributions as well as any voluntary contributions you may be making.
  • Government benefits and TTR: The benefits you or your partner receive might be impacted if you choose to opt for this strategy. How and what exactly will change might become clearer upon discussing this with a Financial Information Service (FIS) officer.
  • Life insurance and TTR: In some cases, the life insurance cover you have with your super may stop or reduce if you start a TTR pension – check this before making any decisions or changes.

TTR can help ease your mind as you transition into retirement but it can be a bit complex. Before you choose whether you want to use TTR to reduce work hours or save on tax, or even if you want to use TTR altogether, you should figure out how this will impact all aspects of your finances.

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