Superannuation is the way most Australians save money to retire. Usually, you start saving for your retirement when you start work and your employer pays super for you the ‘super guarantee’.
Generally, there are three ways you can save your super:
- Australian Prudential Regulation Authority (APRA) regulated super funds (your super is pooled together with large numbers of other members and the fund professionally managed by trustees in compliance with superannuation law. This is where most people have their employer paid super).
- Retirement savings accounts (you have your own special deposit account with a banker other deposit taking institution. These are not commonly held).
- Self-managed super funds (SMSFs) (you are responsible and the trustee of your own fund and need to comply with super law and make your own investment decisions).
You should carefully consider which option is best to provide for your retirement. If you’re thinking about setting up an SMSF, you need to decide if this type of fund is right for you and the things you will need to do to set it up and run successfully.
There are many professionals who specialise in SMSFs. They provide advice to help you understand
- what an SMSF is
- the requirements for and the costs of setting one up and keeping one going
- your investments options and risks
They can also help you set up and run your fund if this type of fund is right for you.
A licensed financial adviser will consider your personal situation and recommend a suitable product for you. By using a financial adviser, you get extra protection if anything goes wrong because you have recourse to an independent complaints scheme. If you have any complaints about the advice you receive you should complain to the adviser first, and if you’re not satisfied with the outcome of that complaint, you may be able to refer the matter to the Financial Ombudsman Service (FOS). The FOS is a free and independent complaints scheme.
Tax agents and accountants
Tax agents or accountants can help you set up an SMSF and advise you on the establishment, operation, structuring and valuation of an SMSF. However, they cannot advise you about which super fund best suits you or which investments should be in your fund, unless they are also a licensed financial advisory business.
Remember, if you decide to set up an SMSF, you will be either a trustee of the fund or a director of the company that is a corporate trustee for the fund. Therefore you are legally responsible for all the decisions made even if you get help. A professional can provide advice and assistance but you’re ultimately responsible.