Published date (29/04/24)
Take the 1st Step and understand SMSFs: Your SMSF checklist
Starting an SMSF involves several steps and considerations. Here's a simplified checklist to help you get started:
Understand SMSFs: Research and understand what SMSFs are, including their features, benefits, risks, and responsibilities. Consider whether managing your own superannuation fund aligns with your financial goals and circumstances.
Seek Professional Advice: Consult with financial advisors, accountants, or SMSF specialists to assess if an SMSF is suitable for you and to understand the legal and financial implications. Discuss your retirement goals, investment strategy, and risk tolerance to develop a tailored plan.
Consider Membership: Decide on the number of members for your SMSF. You can have up to four members, who will also be trustees (or directors of a corporate trustee). Discuss with potential members their roles, responsibilities, and commitments.
Establish Trust Deed: Engage a legal professional to draft a trust deed outlining the rules and operation of your SMSF. Ensure the trust deed complies with superannuation laws and reflects your specific requirements.
Appoint Trustees: Appoint individual trustees or establish a corporate trustee for your SMSF. Ensure all trustees understand their duties, obligations, and legal responsibilities.
Register with the ATO: Register your SMSF with the Australian Taxation Office (ATO) and obtain an Australian Business Number (ABN) and Tax File Number (TFN) for the fund. Comply with ATO reporting and lodgment requirements.
Set Up Bank Account: Open a separate bank account for your SMSF to manage contributions, investments, and expenses. Ensure the bank account is in the name of the SMSF.
Investment Strategy: Create an investment strategy that aligns with your retirement goals, risk profile, and diversification principles. Consider asset allocation, investment timeframe, liquidity needs, and risk management strategies.
Roll Over Superannuation Funds: Consolidate existing superannuation balances into your SMSF by rolling over funds from other superannuation accounts. Review and assess any implications, including insurance coverage and exit fees.
Organise Insurance: Consider the insurance needs of SMSF members and arrange appropriate coverages such as life insurance, total and permanent disability (TPD) insurance, or income protection insurance.
Invest Funds: Start investing funds according to your SMSF's investment strategy. Ensure investments comply with superannuation laws and regulations, including restrictions on related-party transactions.
Implement Compliance Measures: Establish processes to maintain compliance with superannuation laws, including record-keeping, reporting, and annual auditing requirements. Stay informed about regulatory changes and updates.
Review Regularly: Regularly review the performance of your SMSF's investments and the fund's compliance with regulatory requirements. Adjust the investment strategy and operations as needed to achieve your retirement objectives.
Remember, starting an SMSF requires careful planning, ongoing management, and compliance with legal and regulatory obligations. Seek professional advice throughout the process to ensure your SMSF is set up and managed effectively.
