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What Is a Self-Managed Superannuation?

Malcolm Tatum
Malcolm Tatum
Malcolm Tatum
Malcolm Tatum

Self-managed superannuation is a process that involves the direct efforts of an individual to oversee the management and maintenance of a personal pension arrangement. Rather than leave the management of the plan to others, the individual will take on all the tasks associated with the effort, including the receipt of contributions, filing the appropriate reports and forms with governmental tax agencies, and even handling the investment of the pension balance in order to generate additional funds for the retirement years. Owing to the nature of a self-managed superannuation, this approach is not usually considered cost-effective unless there is a substantial amount of money in the fund.

Sometimes called a personal superannuation fund or simply a personal super, the self-managed superannuation fund is often a viable choice for owners of small business operations as well as professionals who earn a living as independent contractors. Like most types of superannuation plans, the approach calls for making contributions to the plan that are up to but do not exceed any limitations on contributions set by tax agencies. Unlike other plans, the individual is charged with the responsibility of managing the balance of those plans and complying with all governmental regulations that are relevant to this type of retirement account.

Woman holding a book
Woman holding a book

Overseeing the function of a self-managed superannuation requires more than simply making contributions and filing a few forms with the appropriate government agencies. The activity also calls for actively monitoring what is happening with the balance, based on the performance of the investments purchased using the funds themselves. All gains and losses must be tracked so they can be reported to the appropriate revenue agency, and the balance of the account can be adjusted accordingly. In addition, the individual must also be prepared to absorb the administrative and clerical expenses associated with the maintenance of the fund.

Owing to the range of responsibilities and the expenses involved in working with a self-managed superannuation fund, financial experts typically recommend that the total balance in this type of fund be over a certain amount. This means that unless the balance is consistently kept at a high level, the individual may find it more cost-effective to go with a superannuation or pension plan that is administered by a third party. Before deciding whether or not a self-managed superannuation plan is the best fit for a given situation, taking the time to consult with financial professionals who are well-versed in different types of retirement plans will often save the individual a great deal of time, money, and effort.

Malcolm Tatum
Malcolm Tatum

After many years in the teleconferencing industry, Michael decided to embrace his passion for trivia, research, and writing by becoming a full-time freelance writer. Since then, he has contributed articles to a variety of print and online publications, including WiseGEEK, and his work has also appeared in poetry collections, devotional anthologies, and several newspapers. Malcolm’s other interests include collecting vinyl records, minor league baseball, and cycling.

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Malcolm Tatum
Malcolm Tatum

After many years in the teleconferencing industry, Michael decided to embrace his passion for trivia, research, and writing by becoming a full-time freelance writer. Since then, he has contributed articles to a variety of print and online publications, including WiseGEEK, and his work has also appeared in poetry collections, devotional anthologies, and several newspapers. Malcolm’s other interests include collecting vinyl records, minor league baseball, and cycling.

Learn more...

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