Why Workers Need To Set Up SMSFs

Posted on: 1 December 2015

Failing to plan is planning to fail. There comes a time in life where an individual grows old and can no longer keep up with the workforce. When this happens, you need to be able to sustain yourself and your family financially. Apart from ordinary pension schemes, there are other ways to maximise your future wealth. Over time, self-managed superfunds have proved to be an effective retirement solution. If you ever plan on retiring someday, below are some reasons why you should consider SMSFs.


With SMSFs, you are responsible for your income statement and balance sheet. Self-accountancy gives you more fiscal privacy. Moreover, it grants you more visibility over your finances. You are able to monitor various assets and liabilities on your own. Being a trustee of the funds also gives you more control over your money transactions, enabling you to regulate the movement of your superfund. Nevertheless, this assists you in making rational investment decisions, since you are now equipped to react to the market appropriately. Lastly, such accountancy enables you to implement auditory advice instantaneously.

Investment Options

Unlike traditional retail and industry superfunds, SMSFs provide a wide variety of investments. An SMSF allows you to invest in both financial and physical assets simultaneously. You can purchase real estate property and also participate in trading of stocks in the financial market.  Nevertheless, this superannuation fund gives you the option of borrowing money for investment in residential and commercial property, enabling you to secure income that would have otherwise been beyond your reach. The superfund also provides a platform for collective investment. You can pool your funds with other trustees to acquire bigger assets for more income.

Income before Retirement

One of the major benefits of this superfund is that you can earn income before you actually retire. An SMSF can be set to pension mode, once you reach the retirement age. The pension mode allows you to keep working after this age and still earn money from your fund.

Cost Effective

SMSFs are as costly to set up and run like other superfunds. However, they offer greater control over costs. The costs you incur are dependent on the investments you make. Moreover, an SMSF becomes cost effective as it grows. This is because the initial fixed costs become relatively smaller to the growing balance. If your fund grows extensively, such costs may be negligible. Lastly, costs can be reduced by regulation of payment for specialist advice, through taking the initiative to research information yourself.

For more information and financial advice, talk with professional accountants and auditors, such as those at Boyd & Associates.