There are fees associated with self managed super funds which amount to some thousands of dollars a year even if the super fund only has 10 cents in it. You need a fund balance of about 250 thousand before it makes much sense, compared to some of those low fee super funds now available.
If you decide to go down that path you will first have to set up a trustee company, if you don't already have a company registered. The trustee company then acts as the trustee for the super fund that you set up.
Sooo,, there is an annual ASIC fee of around $276 (from recollection) for the company plus accounting costs for the mandatory audit of the accounts for the company and the super fund.

They generally say the annual cost are about $2000 per year but I set up my own self managed super fund some years back and the annual costs run to about $4000 each year, mainly for accounting costs and audit procedures.
If you were an accountant you could do it cheaper than that because you could do your own accounting and just pay for the independent audit, probably $1000 to $1500. Accountants charge around $150 to $200 an hour for that sort of stuff because they are all retired rocket scientists and brain surgeons.

It has still been well worthwhile because I don't mind spending the time to shuffle funds between investments as conditions change. And change they do.
The big advantage to a super fund is that there is a flat tax rate of 15% on all income within the fund. If you just left the money in your own name you would be paying up to 50% tax and medicare levy on any income it makes, and that hurts.
Also, if you're over 50, you can pay into the fund up to $50,000 a year out of your income at the tax rate of 15%.
After you retire, the annual income from the entire fund is tax free. That's the present rule but Julia can change that at any time if the upkeep on her pet Swann needs more money. It would be a very "courageous" decision on her part however because it would upset a lot of people and I don't think she could afford that at the moment.

I should add not to leave all this until the last few years of your working life because after you retire you can't keep putting mioney into your super fund for more than 2 years I think. So if you sell any significant asset, then the proceeds are locked out of the fund and any income from this is taxed at your marginal tax rate.
And don't think you will evade it by dropping dead because they see through that cheap trick and they just tax your estate.

Thanks pweedas, that's good info... makes me angry though, $4000 a year just to manage my retirement fund.
That's even worse than the fees that are currently whittling away at my retirement.

What other options are there?
I need to find a strategy that allows low risk growth > inflation, with low fees... my personal investments have $0 fees (some of the ETF's have % fee built in), some pay dividends, but they perform better than my super, but not to the extent that I could absorb $4000/pa with my current balance... and I've made bad mistakes in the pass like "Sons Of Gwalia", farkers, and that goes for Ferrier Hodgson too.

Is it possible to have super sent abroad, say if I had a UK pension?
What about a super company with low fees that just bought government bonds?

evlPanda said...

I'd still much rather pay off my mortgage at a guaranteed ~7.5% each year.

How does that work?

Pweedas info is good.

It's not so much the provider it is the investment option -16 if this is the investment return I'd guess about 60-80% would be in shares, mostly Australian.
The taxes are the contribution tax of 15% on all contributions and any capital gains in the fund.
Also you may have insurance in the fund which means your balance goes down because the premiums are drawn from your fund.


As for fees
Retail fund 2-3%pa ( one path, colonial first state etc)

Smsf
Usallly abou 5k to set up, then ongoing, about $1800 pa to audit the fund, annual requirement. About 3k for someone to manage the fund, investment advice, access to investments. and then depends on investment options but for instance shares, term deposits etc wouldn't have any fees as you hold them directly.

So annually is about 4k all up to run a smsf. Usually more if you hold a property in the fund.

Yes you can transfer a uk pension from the uk in most circumstances but seriously call a professional cause sometimes there taxes etc. As for going the other way uk pensions aren't that great.

SP said...
As for going the other way uk pensions aren't that great.

Yes, but last time I checked the UK lets you access your pension when your 50 with no penalty... I would like to go to a 3rd world country and live it up on a beach when I retire, not sure what my stamina will be like @ >65.

Oh well looks like I'm stuck with retail/industry funds until I have enough to make it worth while.

I over heard somebody at works say he was using his pension money to load up on gold and part of a farm... I'm going to have to start a conversation up.

You are probably better off going with an industry fund (not for profit) than self managed unless you have half a million or so the fees are too high.

And if you do do SMSF, beware of what people say about investing in art, collectors items etc... ATO have cracked down a lot on people trying to loop hole stuff that could be of direct personal benefit.....