The first deadly sin of self managed super

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Welcome to the new financial year, and to the first in a series of seven (how surprising!) articles regarding the main issues to watch out for regarding self managed super funds.

Self managed super is a complex area, and while the basics are reasonably straight forward – get a trust deed, open a bank account and you’re on your way – there are many opportunities to both do a great job of organizing your retirement income and estate planning and on the other hand, to really stuff things up.

Our first deadly sin of self-managed super is ‘it’s all about the investments you choose’. On the face of it, many people get an SMSF because they want to control their own future, which generally translates as ‘I want to pick my own investments’. And there’s so much media around investment choice that it’s easy to think that your investments are the most important choices you make with regards to your super. But that’s simply not the case.

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Retirement is dead

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Why is it that we all keep talking about retirement? Very few people 'retire' these days - the idea is archaeic. What's more common is that you pull back a bit, maybe work a few less days each week, travel some more, play more golf. Maybe you retire and then un-retire - I've seen that a few times! I once worked for a guy who had retired and then had to un-retire when his various business ventures all came to life at once. Or perhaps your partner passes away and being at home alone doesn't hold much appeal.

Instead of retirement, I'd rather talk about stage 3. Stage 1 (0 - 30, give or take) is all about growing up, becoming an adult and getting your act together. Stage 2 (30ish to 60ish) are your 'work hard' years, forging a career, or at least a decent job, raising kids, keeping your relationship together (or not...), making your way in the world. Stage 3 (60ish to 90/100/110??) is your chance to do things differently, try new experiences, and generally enjoy life, with hopefully a decent retirement income.

Now stage 1, 2 and 3 don't sound very exciting, so I'm on the hunt for better ways to describe them. Suggestions anyone?

 

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