Self-managed super funds are no doubt a great way to invest your money and provide you with enough to just cover your expenses once you leave your day job and retire for good. However, there are a lot of complexities involved with setting up and managing a superfund for the long term, which means that not everyone out there may have sufficient knowledge or the skills to do it all on their own. In fact, doing so would only lead to failure, which would be a waste of all the money you invested in the super fund since its inception.One of the reasons why a lot of people have issues with superfunds is because they don’t exactly know what can and cannot be done without incurring into penalties. Let’s see some of the most common pitfalls and mistakes that people make when dealing with super funds. Reading about them will at least help you identify them as something that you should not attempt to do yourself:
Losing Too Much Time for Administrative Work
Although proper administration of your fund is necessary for future success, the reality is that most people spend too much time thinking and contemplating about the little things when they could use that same amount of time to look into many different investment options. Remember that you can always get some useful advice from a tax accountant Glen Waverley, thus helping you reduce time wasted on redundant administrative work.
Failure to Set a Long-Term Goal
A superfund needs to have a long-term goal for it to be an effective tool at providing you with income for the years after your retirement. You cannot totally avoid the fact that this requires some guesswork on your part, but remember that this is essential to ensure that you and the other members of the fund have a steady income at the time when the fund will start to transition.
Using Funds for Personal Objectives
Many people are often mistaken when it comes to using the money accumulate in the super fund: they cannot be used for personal gain and property development, for this means a violation of the rules and regulations, which means that you are going to lose all tax returns and concessions associated with the amount you withdrew from the fund. Read this article to find out more details.
Exploring Investment Options Too Late
When the fund is close to transitioning from accumulation to pension, all of the trustees need to reduce their involvement with the fund when it comes to search for investment opportunities. All of this work needs to be done previously, for the main objective at this point is to reduce volatility by allocating cash to safe, fixed investment portfolios.