Superannuation for the Self-Employed

For self-employed people to enjoy the benefits of superannuation or a self managed superannuation, they must make the payments themselves. Normally, the employer is the one who must make payments and this is compulsory. If you are self-employed, you are your own boss, so you have to make the payments. You may wonder if there is any use bothering, but self-employed contributions do attract significant tax savings. However, you will still need the services of an accountant as percentages and age limits seem to change every year.

There is a wide field of choice when it comes to super funds. When choosing a public fund from a bank or other financial institution or an insurance company, you need to carefully consider what fees they charge and what benefits they give. The reputation of the institution should also be taken into account. Choosing a rock solid reputation will give you peace of mind and ensure the success of your investments, there asset diversification can be similar to those you might see available in managed funds.

Public-offer funds such as those offered by banks give limited participation. You should be able to choose what level of risk you are comfortable with, though. That is, a high return but riskier investment strategy or a lower return but more dependable one. This is about all you can choose, as the trustee is the one who must make all other decisions.

Is Self-Managed Super for You?

If you were thinking of self managed super funds, experts advise to double check certain salient points. For a start, they tell us that you need to have at least $200,000 to make it financially worthwhile. The cost of running your own fund can be around the $1700 per annum mark. This includes the regular audit and reporting that are mandatory.

Time and expertise are other factors. Creating your own super fund is not as simple as opening a saving account. Unless you have plenty of time to spare and know what you are doing, you could find that managing your own super fund is more trouble than it's worth. You have to choose which investments are right for you and know which should be insured. If you change funds you will be changing benefits and fees too. You need to be sure that the fees are kept down while giving you the most benefits possible. You have to be the trustee of your fund and if something goes wrong, then you are legally responsible, even if it was not your fault.

Help is available for those interested in running their own super fund, but be sure you choose the right help. Unless an accountant is licensed they are not allowed to give advice. They can get into a lot of trouble - and so can you - for giving advice they are not qualified to give.