Debunked Misconceptions About SMSF

Debunked Misconceptions About SMSF. A time will come when you will think of retiring already after many years of working half of your life. You might think that retiring is the last problem you have to deal with, but that is where you are wrong because you also have to deal with your retirement savings. However, you should have no problems with it when you have SMSF.


A Self-managed Super Fund is the best way for many Australians to take control over their retirement savings. There is nothing more freeing than controlling how you invest your super, and note that it is one method that many retirees are doing nowadays. However, you might think that SMSF is not for you when you retire, which is why you have to learn the different misconceptions to help you understand it better.

Misconception #1: You cannot get an SMSF if you are not wealthy

One misconception you have to know about SMSF is that you do not necessarily have to be extremely wealthy to have one. As mentioned by the Australian Securities and Investments Commission (ASIC), there is no obligatory minimum balance required to open a self-managed fund according to the Australian Securities and Investments Commission (ASIC), so every retiree should be able to get one. However, it is recommended to have a large opening balance of at least $200,000.

Note that around 25% of retirees usually had a balance between $200,000 to $500,000. If you are still confused about how much money in your balance you need to have before retiring, it would be best to talk to SMSF advisors to know what amount will work for you.

Misconception #2: Getting an SMSF is risky

One great thing about the Self-managed Super Fund is that trustees manage them. Fund managers usually make investment choices on your funds with industry and retail superannuation funds, preventing you from making bad decisions since a professional can manage your funds.

Since you will manage your funds with SMSF, it can be risky knowing that you might spend everything ineffectively. You should have a better understanding and skills if you want to manage your funds and investments efficiently. That is why SMSF advisors provide their services to clients who want to be better at being a trustee of their SMSF.

Misconception #3: Policies are inconsistent frequently

You might have heard from other people that it is not ideal for getting an SMSF because of the frequent changes in rules and regulations. There is nothing worse than having to understand the changes in those policies, especially when you do not have time to understand all of them right away.

Note that amendments to the regulation are limited, and having an SMSF advisor can make your life easy since someone can give you a summarised rundown of the entire policy change.

Misconception #4: You can buy properties with an SMSF easily

Note that buying a property with an SMSF is not as easy as you think. Purchasing a property through an SMSF is more difficult to regulate and manage, and your SMSF trustees cannot live or rent in the property. If you actually plan on purchasing a holiday home for your SMSF trustees or family members, note that you cannot do that through SMSF.

If you want to understand SMSF better, you need to hire and talk to a professional SMSF advisor right away.

Related posts