Self Managed Super

[Julia]

Any experience on the strengths and weaknesses and who to just stay away from. Who has the best free or cheap extras

Are you planning to do a lot of frequent trading? You've given the impression you're pretty new to looking after your own financial future, so I'd have expected not.

If that's the case, I wonder why you're so focused on "free or cheap" ?
Maybe have a read of the Sonray thread on their collapse and reconsider.

 

[harks11]

Are you planning to do a lot of frequent trading? You've given the impression you're pretty new to looking after your own financial future, so I'd have expected not.

If that's the case, I wonder why you're so focused on "free or cheap" ?
Maybe have a read of the Sonray thread on their collapse and reconsider.

Cheap is relative I suppose. Some of the products out there are thousands. So I want to stay within the safe swimming area. I have looked at lots of products but think one of the banks or Belldirect offer good service. Just wanted to get some feedback. However, I think I will go with Comsec or westpac. Comsec is number one in the market gets good ratings in comparisons. From my reading its clear that good research is a must, unsure if that means signing up to the second tier service ($75 ish). Like CommSecIRESS

I am in no rush to do the first trade with the smsf it took me a long time to save so will be doing the homework, hence sometimes silly questions

And yes very new and stepping carefully. Trying to understand as much as possible. This site is great for the help it gives. Will start with baby steps to be sure, and very pleased with all and any comments.

 

[pixel]

Cheap is relative I suppose. Some of the products out there are thousands. So I want to stay within the safe swimming area. I have looked at lots of products but think one of the banks or Belldirect offer good service. Just wanted to get some feedback. However, I think I will go with Comsec or westpac. Comsec is number one in the market gets good ratings in comparisons. From my reading its clear that good research is a must, unsure if that means signing up to the second tier service ($75 ish). Like CommSecIRESS

I am in no rush to do the first trade with the smsf it took me a long time to save so will be doing the homework, hence sometimes silly questions

And yes very new and stepping carefully. Trying to understand as much as possible. This site is great for the help it gives. Will start with baby steps to be sure, and very pleased with all and any comments.

Hi Harksii,
a question I've just thrown back at another member:
Why don't you investigate Brokers and Cash Management Accounts separately? I also trade with Westpac, but relatively "flat-out", meaning there's not much cash in the CMT, meaning the $5 brokerage I save each time out-earns the paltry interest rate of RBA cash rate minus 2%.
For my Superfund, I trade with PariTrade; their rate is 5c higher ($25.00 instead of $24.95) than Westpac's, but I can break one single trade into up to 12 small bites for a single contract note - and brokerage. They also trade off a Macquarie CMA, which pays full RBA Cash rate interest on the bank balance. And in my Superfund, I have usually amounts that make a 2% difference look a lot more "interesting".
PariTech also give me a hot trading platform, Pulse, free of charge - subject to some "frequent trading" rates that I easily achieve.

Not saying you should pick either - just making you aware that there's heaps more out there than one or two options you may have stumbled across.

 

[thestevo888]

Hey Guys,
After six months investing, asking dumb questions on this forum, and getting some great advice (all in no particular order), I have started thinking about creating my own SMSF. I have a pathetically small super balance (not helped by the fact that somehow my super fund managed to lose 25% of my cash in the GFC), but have an accountant mate who is happy to do all the setup and auditing work for free, so hopefully fees won't become much of an issue.

My question for today relates to smsf expenses. I seem to remember someone saying on the forum that they claimed their laptop, internet, etc, as running expenses from their super fund. Is that really possible? Can anyone outline a list of things one could claim? I'm not trying to gouge the thing to death, but if there's legitimate expenses I can deduct, it would seem to make sense. Guess I should ask my accountant mate.
Any thoughts appreciated

 

[hangseng]

Hey Guys,
After six months investing, asking dumb questions on this forum, and getting some great advice (all in no particular order), I have started thinking about creating my own SMSF. I have a pathetically small super balance (not helped by the fact that somehow my super fund managed to lose 25% of my cash in the GFC), but have an accountant mate who is happy to do all the setup and auditing work for free, so hopefully fees won't become much of an issue.

My question for today relates to smsf expenses. I seem to remember someone saying on the forum that they claimed their laptop, internet, etc, as running expenses from their super fund. Is that really possible? Can anyone outline a list of things one could claim? I'm not trying to gouge the thing to death, but if there's legitimate expenses I can deduct, it would seem to make sense. Guess I should ask my accountant mate.
Any thoughts appreciated

Start here:
http://www.ato.gov.au/superfunds/pathway.asp?pc=001/149/030&mfp=001/149&mnu=49150#001_149_030

I run a now highly successful smsf after taking control of it from large funds that were taking it nowhwere but charged exhorbitant fees no matter if it went up or down.

Don't even consider taking anything from your super except legitimate expenses used "solely for the fund"...Noting you can't charge your fund a fee for your service as a trustee, nor make personal claims as you now suggest.

I would ask why even bother to claim on your fund that you are building to provide for your retirement. Build it up...not look how you can milk it early, the latter will see you in strife for breach of the SMSF rules.

My fund is now up over 300% since the GFC, my old fund is still struggling along and if I remained there I would have only just achieved a near return to where it was just before the GFC. Do I recommend SMSF's? Most definitely provided you have the time and knowledge to maintain it within the rules indicated. And that you truly believe you can do better than managed funds, of which I find quite easy.

Don't take any notice of those that would have you believe you need a minimum of $200,00 to operate an SMSF. Load of cods! I was a late starter and commenced with $84,000 (after my first fund totally wiped out my super in the 80's) and now have over $260,000 and growing rapidly. Something no manage fund has "managed" to achieve.

I have been trading and investing in the stock market since 1986 and heavily so since 2004. I started my SMSF in 2007. Don't go into an SMSF thinking it is easy, it will take significant time and knowledge.

I pay $699 annual fees plus the annual ATO reporting fee, I take nothing else from the fund, I only build it up as quickly and effectively as I can so I can retire comfortably as quickly as I can.

Most of all keep informed and up to date on all matters related to SMSF and your selected investments and remember above all....it isn't your money...yet!

 

[thestevo888]

Start here:
http://www.ato.gov.au/superfunds/pathway.asp?pc=001/149/030&mfp=001/149&mnu=49150#001_149_030

I run a now highly successful smsf after taking control of it from large funds that were taking it nowhwere but charged exhorbitant fees no matter if it went up or down.

Don't even consider taking anything from your super except legitimate expenses used "solely for the fund"...Noting you can't charge your fund a fee for your service as a trustee, nor make personal claims as you now suggest.

I would ask why even bother to claim on your fund that you are building to provide for your retirement. Build it up...not look how you can milk it early, the latter will see you in strife for breach of the SMSF rules.

My fund is now up over 300% since the GFC, my old fund is still struggling along and if I remained there I would have only just achieved a near return to where it was just before the GFC. Do I recommend SMSF's? Most definitely provided you have the time and knowledge to maintain it within the rules indicated. And that you truly believe you can do better than managed funds, of which I find quite easy.

Don't take any notice of those that would have you believe you need a minimum of $200,00 to operate an SMSF. Load of cods! I was a late starter and commenced with $84,000 (after my first fund totally wiped out my super in the 80's) and now have over $260,000 and growing rapidly. Something no manage fund has "managed" to achieve.

I have been trading and investing in the stock market since 1986 and heavily so since 2004. I started my SMSF in 2007. Don't go into an SMSF thinking it is easy, it will take significant time and knowledge.

I pay $699 annual fees plus the annual ATO reporting fee, I take nothing else from the fund, I only build it up as quickly and effectively as I can so I can retire comfortably as quickly as I can.

Most of all keep informed and up to date on all matters related to SMSF and your selected investments and remember above all....it isn't your money...yet!

Thanks HS - Good to know your expertise can be called on even outside the PEN thread!-) Apologies for the late reply-
I lost the thread.

 

[superbenefit]

Thanks HS - Good to know your expertise can be called on even outside the PEN thread!-) Apologies for the late reply-
I lost the thread.

Yes you can have a self managed super fund (SMSF) with less than $200,000, as long as you are able to put time into running and investing. those are the two areas the ATO has concerns about.
My wife and started with $60,000, and as i do administration, i can do the bookwork.
It is best to get some support in the admin side, such as an accountant who DOES know SMSF, or an admin service provider to do the bookkeeping, minutes etc.
For investing, seek some good learning, such as Conscious Investor (no commercial affiliation) which has interesting research by Prof Price, or Stock Doctor - Lincoln Indicators. I have great support from a financial planner and expert broker, so i am not alone. Also Google to find other help.

 

[Julia]

A point to consider for those who are using any of the mass produced SMSF Trust Deeds, e.g. Esuperfund.

When making your Will, the assets contained within your SMSF are not automatically included in your estate.
\
The Trust Deed needs to have some particular wording in a binding nomination to ensure your SMSF assets go to whomever you want to leave your estate.

So it might be a good idea to have your solicitor check out the Trust Deed so that there's no question about what happens to your assets in the SMSF.

 

[Julia]

There's a very comprehensive and useful booklet on what is required for SMSF's within the current "AFR Smart Investor".

 

[pixel]

A point to consider for those who are using any of the mass produced SMSF Trust Deeds, e.g. Esuperfund.

When making your Will, the assets contained within your SMSF are not automatically included in your estate.
\
The Trust Deed needs to have some particular wording in a binding nomination to ensure your SMSF assets go to whomever you want to leave your estate.

So it might be a good idea to have your solicitor check out the Trust Deed so that there's no question about what happens to your assets in the SMSF.

but if your Deed doesn't include that provision, there's a simple fix:
Type a Binding Nomination, have it c-signed by two witnesses, and file it with the Deed.
All you have to remember then is, add a brief note of re-confirmation every 3 years. That note only requires your signature, no witness necessary.

[FONT=&quot]Binding Death Nomination[/FONT]​

I, Jack Sparrow, (sole) member of the Chickenfeed Superfund, ABN *********,
born on the ** of **** nineteen hundred umpty-ump,
residing at ## somewhere rd, Woopwoop, ####,
submit the following Binding Death Benefit Nomination.
In the event of my death, my (spouse/ child/ lover...) Jill Deadbeat, nee Smith,
born on the ** of **** nineteen hundred umpty-ump,
residing at xxxxxxxxxxxxxx,
shall receive one hundred per cent (100%) of the assets then held by the Fund.


I declare that I have read and understood the applicable documentation governing Self-Managed Superfunds, and that this declaration is my informed and binding decision.



___________________________________ ___________________________________
Jack Sparrow, as Member Date


[FONT=&quot]I declare that the above was signed and dated in my presence, that I am aged over 18 years, and not nominated as a beneficiary.

[/FONT]

Additional beneficiaries may be added with varying percentages, as deemed appropriate; likewise provisions in case one nominated person pre-deceases the member.

 

[hangseng]

Thanks pixel and Julia, one of the best information threads I have seen on any forum.

You have just answered a question I was about to put up about estates and the binding death nomination.

Here is a another question if I may:

I plan to fully retire at 55 or near thereafter. I am currently looking at if I can obtain a lump sum payment of my total super and thereafter manage the funds myself.

I have major benefits in doing so working and now living permanently overseas as a (ATO confirmed) non-resident of Australia. I had to make significant changes recently to my SMSF to ensure compliance with residency rules and specifically the "central management and control" rule. That side is now sorted and I am now looking at what options are avalable to me should I choose to retire from fulltime work (or maybe just all work).

At 55 or >
1. Can I take a lump sum and close the smsf?
2. Do I have to take a partial lump sum and maintain the fund until 65?
3. Is the only option a pension?

From what I have found I believe my preferred Option 1 is possible providing I completely retire permanently (or at least have the intent to). The other two aren't my preferred and I would probably continue working for a few more years even if just part time.

By the way I am seeking an accountant with good knowledge of expat matters. I am finding that quite difficult and mostly it is me telling my accountant so I am sure I could be missing important aspects.

Have a great Easter all
HS

 

[Junior]

Thanks pixel and Julia, one of the best information threads I have seen on any forum.

You have just answered a question I was about to put up about estates and the binding death nomination.

Here is a another question if I may:

I plan to fully retire at 55 or near thereafter. I am currently looking at if I can obtain a lump sum payment of my total super and thereafter manage the funds myself.

I have major benefits in doing so working and now living permanently overseas as a (ATO confirmed) non-resident of Australia. I had to make significant changes recently to my SMSF to ensure compliance with residency rules and specifically the "central management and control" rule. That side is now sorted and I am now looking at what options are avalable to me should I choose to retire from fulltime work (or maybe just all work).

At 55 or >
1. Can I take a lump sum and close the smsf?
2. Do I have to take a partial lump sum and maintain the fund until 65?
3. Is the only option a pension?

From what I have found I believe my preferred Option 1 is possible providing I completely retire permanently (or at least have the intent to). The other two aren't my preferred and I would probably continue working for a few more years even if just part time.

By the way I am seeking an accountant with good knowledge of expat matters. I am finding that quite difficult and mostly it is me telling my accountant so I am sure I could be missing important aspects.

Have a great Easter all
HS

IF you have satisfied a 'condition of release' you are able to take all of your benefits as a lump sum once reaching age 55. Tax may be payable depending on how much is 'taxable' and how much is 'tax free'.

If you have reached preservation age but haven't satisfied a condition of release you can take a transition to retirement pension whereby the maximum pension payment is 10% of the account balance per annum.

The above applies to australian residents, if you reside overseas you'll need advice on what you can and can't do.

 

[xyzedarteerf]

Thanks pixel and Julia, one of the best information threads I have seen on any forum.

You have just answered a question I was about to put up about estates and the binding death nomination.

Here is a another question if I may:

I plan to fully retire at 55 or near thereafter. I am currently looking at if I can obtain a lump sum payment of my total super and thereafter manage the funds myself.

I have major benefits in doing so working and now living permanently overseas as a (ATO confirmed) non-resident of Australia. I had to make significant changes recently to my SMSF to ensure compliance with residency rules and specifically the "central management and control" rule. That side is now sorted and I am now looking at what options are avalable to me should I choose to retire from fulltime work (or maybe just all work).

At 55 or >
1. Can I take a lump sum and close the smsf?
2. Do I have to take a partial lump sum and maintain the fund until 65?
3. Is the only option a pension?

From what I have found I believe my preferred Option 1 is possible providing I completely retire permanently (or at least have the intent to). The other two aren't my preferred and I would probably continue working for a few more years even if just part time.

By the way I am seeking an accountant with good knowledge of expat matters. I am finding that quite difficult and mostly it is me telling my accountant so I am sure I could be missing important aspects.

Have a great Easter all
HS

It just so happens I have been reading up on this today...heres is the actual Payment Standards for Regulated Superfund regarding cashing of benefits.

http://www.apra.gov.au/Superannuati...ndards-for-Regulated-Superannuation-Funds.pdf

 

[xyzedarteerf]

Also for those who have Super money left from funds that have less than $200 balance this can be cashed out from the fund holding them instead of leaving the money until its eaten up by fees. Have a safe Easter everyone.

 

[warennie]

Also for those who have Super money left from funds that have less than $200 balance this can be cashed out from the fund holding them instead of leaving the money until its eaten up by fees. Have a safe Easter everyone.

By law, fees are not allowed to exceed capital growth on balances under $1000... However most standard accounts come with life insurance as a default, and premiums from life insurance will be taken out regardless of growth.

 

[pixel]

By law, fees are not allowed to exceed capital growth on balances under $1000... However most standard accounts come with life insurance as a default, and premiums from life insurance will be taken out regardless of growth.

And that, gentle reader, makes it a no-brainer to opt OUT of the life insurance as soon as you have enough funds in Super to see your family through.

Let's say you're aged 50 and have a couple hundred K in your super account. Why then waste premiums on a life insurance, given that your spouse gets the lot tax-free anyway? Especially when you're running your own SMSF, you ought to be able to earn more from your own investing/ trading than have a fat cat bet against your life expectancy.

 

[Reasons]

And that, gentle reader, makes it a no-brainer to opt OUT of the life insurance as soon as you have enough funds in Super to see your family through.

Let's say you're aged 50 and have a couple hundred K in your super account. Why then waste premiums on a life insurance, given that your spouse gets the lot tax-free anyway? Especially when you're running your own SMSF, you ought to be able to earn more from your own investing/ trading than have a fat cat bet against your life expectancy.

I always used life insurance as the gap between what you wanted as the end goal in Super and what was missing. Eg, you have $200K, but really need $2m by 'x' age, then you covered your family that way should either partner die, therefore meeting the end goal regardless and making sure the other partner could easily cope financially.

 

[Julia]

but if your Deed doesn't include that provision, there's a simple fix:
Type a Binding Nomination, have it c-signed by two witnesses, and file it with the Deed.
All you have to remember then is, add a brief note of re-confirmation every 3 years. That note only requires your signature, no witness necessary.



Additional beneficiaries may be added with varying percentages, as deemed appropriate; likewise provisions in case one nominated person pre-deceases the member.

Sure. All I was attempting to do was to bring the need to check to the attention of people who may not have been aware of this.

 

[village idiot]

general question;
I'm sure there are a number of books on this subject, but can anyone recommend any one in particular that is like the 'bible' of SMSF?

specific question;
I cant find a definitive answer anywhere on the net - can you write put options within a SMSF (the answer seems to be yes but not definitively), and if so do they need to be 100% cash secured , or is it enough just to meet the relevant margin requirements?

thanks in advance

 

[Boggo]

You should be able to find something on either the left or right side items on this page below
Don't forget that your trust deed needs to also show what you are investing in.

http://www.ato.gov.au/superfunds info