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Learn About DIY Super Funds
Trying economic times have many people more worried than ever about their retirement investments. Stocks experience breathtaking highs and lows every day, leading to high stress for investors. Some have chosen to take control of the situation on their own and have turned to DIY super funds. Each individual investor will have to determine if these funds are a worthwhile exercise.
Possibly the best part of DIY super funds is the ability to control the investments and personally oversee where funds are going. It should be noted, especially by those who have never traded stocks on their own, that trading takes practice. It is by no means impossible to do, (if it was, no one would invest in self-managing superannuation) it just may take some time to get good at it. Prior experience is valuable in that it allows for wise decisions. Because self-managers are often careful with their money, they often make conservative investments. Accepting the lower yield provided by low risk stocks is a small price for these investors to make for total control of their assets.
Managing DIY super funds is also a time consuming proposition. Because it is self-managed and everyone involved is a trustee, it is up to the self investor to manage the books and stocks. It takes time to research the shares and whether or not they are stable, low/high risk, low/high yield, and their historical value. Sifting through the figures and keeping close, accurate records is not something one would want to do in a few minutes if they wish to keep their money safe. Self-managers also want to take their time in making sure everything is squared up to avoid any hassles from the tax office.
DIY super funds are not free. As the saying goes, you have to spend money to make money, and it is estimated that super funds require anywhere from $1500-$4000 annually to maintain; however, wise investing and fewer transactions leads to fewer ongoing fees. Additionally, tax concessions exist for super funds. Investment income earnings can be taxed at no higher than a 15% rate, which is different than the marginal tax rate. These are small prices to pay for investors who are fed up with the performance of others in handling their retirements.
Again, it is up to the individual investor to decide if DIY super funds are worthwhile. The flexibility in choosing investments and the control of every penny is attractive to some. If the investment of time and a little money don’t sound like much work, self-managed super funds may be the way to go.
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