Superannuation is designed to provide retirement benefits and for many, a SMSF is the best vehicle for this. But as those of you who have gone down the SMSF path will know, there is significant costs associated with this, and it is always a good reminder to double check the suitability of an SMSF in meeting your retirement planning needs.
Colin Lewis in the Australian Financial Review highlights one of these costs as being that if you are off on a well-deserved overseas trip, you still need to ensure that your fund’s annual return is lodged with the ATO. Whilst this is not impossible to plan around, it certainly is something SMSF trustees should consider.
Retirees in particular should also examine if the costs associated with being a SMSF trustee are worthwhile considering the alternative of sitting back and drawing a pension from a public offer fund. And whilst many aspects of running a SMSF can now be outsourced, as Lewis notes “the buck stops with you as a trustee as your responsibilities cannot be delegated”.
But it is not only retirees that could be in a position where the burdens of being a SMSF trustee outweigh the benefits. Here at selfmanagedsuper.com.au, we often find that another category of trustees that can be overwhelmed by the responsibilities are those leading busy lifestyles. Working full time, looking after a family and ensuring you are meeting all your responsibilities as a SMSF trustee is a lot for anyone to manage.
So with all of these burdens, why should someone have a SMSF? As noted by Lewis, the reason to run your own fund generally “should be all about what other funds can’t offer” compared to a SMSF. Therefore if there is something that a mainstream fund can’t provide, an SMSF is definitely a worthwhile strategy permitted the burden does not outweigh the benefits gained.