Is A Self Managed Super Fund (diy Super) Right For You?

A 'self managed super fund', also known as a DIY Super

, is a way for employees and their employers to jointly contribute towards the employee's pension. The money is invested in government bonds, shares or even property until the employee retires. Upon retirement, the employee can release the fund in one of three ways; either as regular payments, as a lump sum, or as a combination of the two. The advantages of having a DIY Super are:

Low Taxation: Tax payments can cost a large amount of money over the full course of the fund, though as a DIY Super is eligible for certain tax concessions, this amount is reduced and you will ultimately have more money by the end of the funds life.

Investment Choice: Having choice in where and how much to invest with your DIY Super gives you a huge advantage in customization of your funds investments compared to other similar funds that can not offer this.

Control: A DIY Super lets you make the decisions as to how your funds are invested and how the fund operates. You have the flexibility to alter your investment strategy as and when required to meet changes in the economic climate or the changing needs of the members of the fund.

If you think that a DIY Super might be a wise way to save for your retirement, then you should keep the following in mind...

- Each member of the fund must be a trustee

- Trustees may not be paid for any duties carried out

- It is your responsibility to ensure that the fund complies with the regulations

- You must keep records of all transaction in the forms of receipts, statements and other paperwork for the duration of the fund

Choosing the correct investments for your DIY Super can be a difficult process due to the number of options available to you. A financial advisor is a sensible way of getting help in finding good investments however; remember that the responsibility of the fund lies at the members' feet, and finding a good financial advisor is sometimes not easy.

On choosing a financial advisor to help you with your DIY Super, always first check whether they are licensed to offer financial advice and their experience in this particular area. Also sometimes it is better paying more money for someone who has more experience in this field.

Research is key in starting a DIY Super. You need to know who you will be opening the fund with, what will you be investing in, what exactly are the rules and regulations and which financial advisor you want to help you. If you remember all these point it will help you in the long run.

by: Mark Walters

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