You’ve worked hard to accumulate your current wealth and the lifestyle it affords you. In an ideal world, that wealth would be preserved in order for you to continue enjoying life’s luxuries long after your last paycheque. In this scenario, you would relish retirement and ready access to finances that gave you the freedom to spoil the grandchildren and splurge on travel and entertainment. Idealism paints a pretty picture, but, in reality, your retirement is a blank canvas until you take steps to create your masterpiece. When planning for your retirement, your Consilium adviser (in collaboration with your accountant) is well placed to help you understand the options available to you and how they may relate to your overall financial plan.
A Self-Managed Super Fund (SMSF) is a superannuation structure that puts you in the driver’s seat, giving you control over your retirement savings. Unlike a public offer fund, when you establish an SMSF, you will inherit the dual responsibilities of both member and trustee. As a trustee, you will be obliged to comply with the Trust Deed and the Superannuation Industry (Supervision) Act which governs the way super funds are run. An SMSF may provide a significant degree of flexibility in your investment choices. However, those investments, as well as savings accruing interest and other revenue returning properties held within an SMSF, must be used for the sole purpose of funding your retirement. Borrowing to acquire assets is a ‘hot topic’ with SMSF investors. If you intend to borrow to purchase property to hold within your SMSF, you may require additional financial advice to put in place a suitable risk strategy.
Further, your Consilium adviser can offer scenarios that may help you assess other potential benefits and pitfalls of investing in an indivisible asset. If you have complicated Estate Planning arrangements, you may wish to consider tailoring your Will and other documents to accommodate a newly created SMSF. Your Consilium adviser, together with your solicitor and accountant, can assist you in developing and implementing strategies for intergenerational transfers of wealth.