A Self-managed Superannuation Fund is created by one or more people in an investment or retirement fund. It is regulated by ATO (The Australian Taxation Office) and is managed by the individuals running the fund. Members of an SMSF can be trustees or directors. They are all responsible for making decisions about the fund and making sure that the fund adheres to the relevant tax laws.
SMSFs are a great way to save and preserve wealth so that you can support yourself when you go into retirement. Balance is important when it comes to investing for your retirement. In times of financial or economic downturns, we’ve seen how the global financial crisis gutted many people’s nest eggs. Many retirees found that they lost more in investments on stocks and bonds and almost had to start over with nothing.
Since 2008, we haven’t seen governments dealing with those issues that landed us in that crisis. Instead, lots of countries are dealing with a growing debt situation. They are still printing more money even though we know its potential for creating hyperinflation.
You can buy gold bullion SMSF. Real physical gold can help you balance your financial risks. Having small sized bullion bars or coins means that you have assets you can liquidate quickly. You won’t have to sell the whole stash of gold you have, only a portion to cover whatever amount you need at that specific moment. Gold bullion is divisible, other assets like property aren’t. You can sell bullion in phases and when you are in a better financial situation, buy more to replace what has been sold.
Setting up an SMSF is not some easy DIY process. It takes lots of time and effort and comes with responsibility. You will need to have an extensive knowledge of financial matters and all the laws and regulations governing SMSFs. Most people don’t have that knowledge but there are specialists who can employ to help you setup your SMSF. However, even if you have a finance guy, you are still responsible.
You need to understand what your legal responsibilities. Whether your employ a professional to help you with your investments or not, the responsibility always lies with you.
The Australian Tax Office has set out guide lines regarding SMSF and highlight that trustees of an SMFS should have a strategy with the following key considerations:
- Diversification: it is important not to put all your eggs in one basket when investing. Mix things up and invest in other asset classes like precious metals.
- What the risk and possible returns will be from investments.
- How to maximise the returns from investment.
- Liquidity: determine how easily assets can be liquidated into cash to meet the fund’s expenses.You can buy gold bullion SMSF because it meets ATO’s key considerations. Gold bullion is a great asset to include in an investment fund, it gives it that diversification needed. Gold is also less risky than other asset classes like stocks and bonds because it is a safe haven investment that is not negatively affected by global financial crises. As to how much gold should make up your fund is up to you. Contrary to what has been said in the past, ATO does not make any demands on the percentage of different assets you should have in any fund. It all depends on you.