Do you have one? What's the best way to do it for someone that's fairly hands on?
Financial podcast that I follow now recommends a figure of 500K to make them beneficial or for professional purposes such as holding your workplace buildings within a SMSF. I guess it depends on who your talking to and what they are selling you. I'm more than happy with my 8% return from my industry super fund in the last 12 months, invested in infrastructure.
It's not so much the return, but more the annual fee they charge. At my point in my career, the 1% annual fee that the super funds charge on the super balance is considerable. Toss in my wife's super and it's even more. I make a similar annual return (slightly better) with my shares outside of super than the fund does, so I might as well save that 1% fee. Compounded over several years, an additional 1% makes a significant difference.Select to expand quoteairsail said..
I guess it depends on who your talking to and what they are selling you.
I'm not sure what you mean by that? I'm not buying anything from anyone?
Select to expand quoteHarrow said..
Do you have one? What's the best way to do it for someone that's fairly hands on?
Setting it up is easy enough. Definately use an accountant who knows what they are doing to ensure it is fully compliant and stays that way.
You can manage your own investments or use a financial planner to help select industry funds that match your investment strategy. The former is more hands on and carries associated risk / reward. The latter is what airsail is referring to. Many FP's are tied to certain funds and so tend to be "selling" them. I would find an FP that is independent or at least up front with thier associations if going down that path.
Select to expand quoteHarrow said..
It's not so much the return, but more the annual fee they charge. At my point in my career, the 1% annual fee that the super funds charge on the super balance is considerable. Toss in my wife's super and it's even more. I make a similar annual return (slightly better) with my shares outside of super than the fund does, so I might as well save that 1% fee. Compounded over several years, an additional 1% makes a significant difference.airsail said..
I guess it depends on who your talking to and what they are selling you.
I'm not sure what you mean by that? I'm not buying anything from anyone?
Accountants love SMSF, 2-3k a year in audit fees so you need to factor in that cost when comparing fees.
There are some good industry funds charging small fees and still having great returns. Hostplus Indexed Balanced has annual fee of .05%, but has still averaged 8.4% pa the last 10 years. Worth a look if it's the fees your trying to reduce.
Wow. All bad advice.
I do my own super. When the law changed to allow using super for home deposits suddenly I could afford a house on the water. If I'd followed any of the above advice I'd still be renting.
Select to expand quoteHarrow said..
What's the best way to do it for someone that's fairly hands on?
Just put it all in Bitcoin ?
Select to expand quotepsychojoe said..
Wow. All bad advice.
I do my own super. When the law changed to allow using super for home deposits suddenly I could afford a house on the water. If I'd followed any of the above advice I'd still be renting.
Only available to first home buyers, and then limited to 50k. Most of us are no longer first home buyers.
I have had one for more than 30 years. It has been expensive to pay my accountant and more so the auditor to do relatively little, the figure of $2-3k is about right. There are specialists firms that do the lot for about a $1k.
To be honest I have hated having it, but I doubt I would feel any different with conventional super. I don't need super annuation, and would have prefered the freedom to do what I wanted the cash and the asset. It is also a major complication in a divorce.
Only now this year am I starting to see some benefit from it, I have started a pension that helps me save a few tax dollars and get some of the cash out of the super fund.
When I'm not on the water I'm a family lawyer during the day and SMSF's are a problem sometimes because:
1 people raid them illegally when things are tough,
2 when an SMSF holds 1 big asset its hard to split it on a separation.
However if done properly they are easy for us to deal with.
Everyone goes on about the cost. And im a tightarse. But when i look at the statement i cant see a huge amount of fees. And its being managed by professionals. I dunno. Can someone explain how the fees are so bad? Its less than 1%?
Everyone goes on about the cost. And im a tightarse. But when i look at the statement i cant see a huge amount of fees. And its being managed by professionals. I dunno. Can someone explain how the fees are so bad? Its less than 1%?
I keep putting money into an industry fund to get that $27 500 annual tax deduction. The fees are about 0.15%.
So on (say) $500K super balance the difference between that anda for profit manager charging 1% is a bit over $4 000/year
The actual return is about or a bit less than the 9% pa after tax I have been getting on an ETF based on the ASX200
Fees get real important as you super balance grows. Many workers will hit the 1 mil mark in the coming years so 1% fees costs you 10k/year, and the fund is doing nothing more for you than a worker with a 100k balance.
This is where SMSF shine as the fees are fixed, 3-4K/yr no matter the balance. I have looked for a fixed rate industry fund but it seems there is none available, too much money to be made from us. I'm sticking to a low cost index fund for now though the SMSF is tempting.
Select to expand quoteairsail said..
Fees get real important as you super balance grows. Many workers will hit the 1 mil mark in the coming years so 1% fees costs you 10k/year, and the fund is doing nothing more for you than a worker with a 100k balance.
This is where SMSF shine as the fees are fixed, 3-4K/yr no matter the balance. I have looked for a fixed rate industry fund but it seems there is none available, too much money to be made from us. I'm sticking to a low cost index fund for now though the SMSF is tempting.
Yeah, I was paying a hefty 5-figure annual fee for what, a fund that got forced to close last year because it was doing so badly! The upside was that I moved the balance out of high-growth at the beginning of the COVID and back in at the end, which made a gain equivalent to a year's salary. (And it was after reading the suggestion from a fellow Seabreezer! 
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