Super Myths: 3 Misconceptions That Can Hurt Your SMSF Strategy
You’ve probably heard a lot of myths about SMS F’s, especially if you’re thinking of setting up one yourself. When it comes to securing your financial future, you definitely need to discern what is true from what is not.
However, the risk of misunderstanding what SMSF is can undermine your wealth management strategy. Many fail to maximise the benefits of managing their own super fund just because they believe popular misconceptions.
Now, it’s time to set the record straight. Do away with these common misconceptions about SMSF:
SMSF is entirely DIY
A self-managed super fund isn’t entirely DIY. You may need to build a team around you to manage your super fund more efficiently. From ensuring that your fund meets the legislative requirements to establishing your fund’s investment strategy, a good team of advisors can help you get the most out of your SMSF.
You can start with a balance less than $200k
If your fund does not have at least $200k, you might need to look for other options. ASIC have stated that an SMSF with less than this amount is not cost effective. Unless they have an extremely good reason to do so, advisers don’t often recommend an SMSF to anyone with less than $200k.
You can easily renovate your investment home
Every investor wants their property grow in capital value. But if you’ve used the limited recourse borrowing arrangement (LBRA) to make an investment, you’re not allowed to renovate your investment home. According to the rules set by ATO, owners can only repair or maintain their properties.
A self-managed super fund is an effective way to build long-term wealth and fund your retirement. This is why you need to consider all factors carefully before you open a DIY super fund. Consult with our team of professionals who know the ins and outs of investments through SMSF.
Do you know other misconceptions about SMSF? Do let us know in the comment sections below!