Super so far

Nearly 2 years ago, I setup my Self Managed Super Fund (SMSF), so today I thought I'd take some time to reflect on whether or not that was a good decision.  For US readers, I believe that Super(annuation) is similar in concept to your 401k, and the "Self Managed" part means that you manage it yourself, as the Trustee of the Fund.

When it comes to Super, people generally fall into one of two categories - those that give a shit, and those that don't.   Everyone starts off in the "those that don't" camp, until one of a number of things happen:

• You become self employed, at which time you (as a Company) start paying yourself (as an Employee) and must make the mandatory Super contributions (to yourself).
• You realise that you have a significant amount of money in your Super Fund.

At which point, you start to wonder why you're letting someone else manage your money, and you start to analyse your fund managers' [sic plural] performance, and their fees, and decide that you could do better yourself - even if you didn't do anything.

Welcome to stage II in life: Giving a shit about your Super.




If you're interested, I've written about the mechanics of setting up your own SMSF before.

But I'd really like to articulate the real benefits of running your Super Fund yourself.  It is knowing that:

• You are in control and your investment strategy, and can implement whatever strategy helps you sleep best at night.
• You are not paying management fees.  You will pay some administration fees to your accountant - but these are generally hourly rates based on your contact time, so that is fine.
• You have access to your money if you really need it.  It's your money.  In an emergency, you can request early access to it, but in a real emergency, you won't want to wait for some bureaucrat's rubber stamp.
• Some of your retirement savings can now easily be stored it outside the banking and credit system.  That is, you can truly mitigate risk.
• You will gain a financial education, simply by accepting the responsibility of managing your savings and investments.

So, I have experienced many benefits of running my own SMSF, and I can think of no regrets.

If you are thinking of setting up your own SMSF, go and see your accountant.  He might try and tell you that you need $300k in existing Super Funds to make it worth your while, however, he won't really understand the significance of the benefits mentioned above, and will only be advising based on the administrative costs of the fund as a percentage of the total.  Once you consider the above benefits, including mitigating the credit currency risks, it would well be worth your while with as little as $50k.