For the right people, it can. Many Australians never consider an SMSF because they don't know what one can do. Here are five points to help you make up your mind about whether an SMSF could support your retirement.
1. Start early
Many people leave retirement planning late, and their savings have less time to grow. The earlier contributions go in, the longer they have to build. A well-run, well-funded SMSF can make a real difference to retired life.
2. Plan with the numbers
A licensed financial adviser can help you plan, set up and run your SMSF around the retirement you have in mind. A retirement calculator, such as the one on ASIC's Moneysmart, helps you see how much you may need.
3. Turn your savings into a pension
Once a member retires, the fund can turn their savings into a regular pension, while the trustees keep control of how the money is invested. Spreading investments across different assets helps manage risk over the long period the money is invested.
4. Keep the fund well structured
An SMSF runs to a set structure all year. It starts with a trust deed and an investment strategy, and these guide each property or other investment the fund adds. That structure becomes the backbone of members' retirement income.
5. Keep building
A comfortable retirement needs enough in the fund. Keep contributing, within the caps the law sets each year (see the ATO's current contribution caps). If you're not confident investing yourself, get professional advice.
If you're a trustee, or thinking of becoming one, talk to your accountant or a licensed financial adviser.