DIY Super For Dummies E-Book

Trish Power

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 647

Veröffentlichungsjahr: 2015

Beschreibung

Taking control of your super is easier than you think

Now in its third edition, DIY Super For Dummies contains all the expert information and advice you need to confidently set up and manage your fund, navigate the ever-changing super rules, and invest your fund wisely.

Written in the straightforward but fun language that has defined the For Dummies brand for more than twenty years, this friendly and easy-to-follow guide helps you figure out if DIY super is the right way to go for your unique circumstances, shows you how to establish a self-managed super fund, highlights the many ways to contribute to your fund, considers how to make the most of the super tax incentives, and so much more.

With comprehensive new content explaining recent super changes announced by the government, and guidance on SMSF changes that have occurred since publication of the previous edition, DIY Super For Dummies gives you unprecedented and independent information to help you make informed decisions about your DIY super fund, empowering you to develop a successful long-term plan for retirement.

• Explores how much super is enough for a comfortable retirement
• Explains the super rules and opportunities in plain English, and outlines how to create a SMSF in ten steps
• Delves into the costs of running a SMSF, and steers you through your fund's super CART (Compliance, Administration, Reporting and Tax obligations)
• Explains how to pay a tax-free pension from your DIY super fund
• Offers sensitive and authoritative information on how to take care of your family after you're gone

Take control of your retirement plans! —let DIY Super For Dummies arm you with the tools you need to set up and run a SMSF, and help you create a comfortable retirement.

Leseprobe

DIY Super For Dummies®

3rd Australian Edition Published by Wiley Publishing Australia Pty Ltd 42 McDougall Street Milton, Qld 4064www.dummies.com

Copyright © 2015 Wiley Publishing Australia Pty Ltd

The moral rights of the author have been asserted.

National Library of AustraliaCataloguing-in-Publication data:

Author:Power, Trish, author.Title:DIY Super For Dummies / Trish Power.Edition:3rd Australian edition.ISBN:9780730315346 (pbk.)9780730315353 (ebook)Series:For Dummies.Notes:Includes index.Subjects:Pensions — Australia.Retirement income — Australia.Retirement — Planning.Finance, Personal — Australia.Investments — Australia.Dewey Number:331.2520994

All rights reserved. No part of this book, including interior design, cover design and icons, may be reproduced or transmitted in any form, by any means (electronic, photocopying, recording or otherwise) without the prior written permission of the Publisher. Requests to the Publisher for permission should be addressed to the Legal Services section of John Wiley & Sons Australia, Ltd, Level 2, 155 Cremorne Street, Richmond, Vic 3151, or email [e-mail].

Cover image: © iStock.com/pamspix

Typeset by diacriTech, Chennai, India

Printed in Singapore byC.O.S. Printers Pte Ltd

10 9 8 7 6 5 4 3 2 1

Limit of Liability/Disclaimer of Warranty: THE PUBLISHER AND THE AUTHOR MAKE NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE ACCURACY OR COMPLETENESS OF THE CONTENTS OF THIS WORK AND SPECIFICALLY DISCLAIM ALL WARRANTIES, INCLUDING WITHOUT LIMITATION, WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE. NO WARRANTY MAY BE CREATED OR EXTENDED BY SALES OR PROMOTIONAL MATERIALS. THE ADVICE AND STRATEGIES CONTAINED HEREIN MAY NOT BE SUITABLE FOR EVERY SITUATION. THIS WORK IS SOLD WITH THE UNDERSTANDING THAT THE PUBLISHER IS NOT ENGAGED IN RENDERING LEGAL, ACCOUNTING, OR OTHER PROFESSIONAL SERVICES. IF PROFESSIONAL ASSISTANCE IS REQUIRED, THE SERVICES OF A COMPETENT PROFESSIONAL PERSON SHOULD BE SOUGHT. NEITHER THE PUBLISHER NOR THE AUTHOR SHALL BE LIABLE FOR DAMAGES ARISING HEREFROM. THE FACT THAT AN ORGANISATION OR WEBSITE IS REFERRED TO IN THIS WORK AS A CITATION AND/OR A POTENTIAL SOURCE OF FURTHER INFORMATION DOES NOT MEAN THAT THE AUTHOR OR THE PUBLISHER ENDORSES THE INFORMATION THE ORGANISATION OR WEBSITE MAY PROVIDE OR RECOMMENDATIONS IT MAY MAKE. FURTHER, READERS SHOULD BE AWARE THAT INTERNET WEBSITES LISTED IN THIS WORK MAY HAVE CHANGED OR DISAPPEARED BETWEEN WHEN THIS WORK WAS WRITTEN AND WHEN IT IS READ.

Trademarks: Wiley, the Wiley logo, For Dummies, the Dummies Man logo, A Reference for the Rest of Us!, The Dummies Way, Making Everything Easier, dummies.com and related trade dress are trademarks or registered trademarks of John Wiley & Sons, Inc. and/or its affiliates in the United States and other countries, and may not be used without written permission. All other trademarks are the property of their respective owners. Wiley Publishing Australia Pty Ltd is not associated with any product or vendor mentioned in this book.

Contents at a Glance

Introduction

Part I: Taking Control of Your Super

Chapter 1: Is DIY Super Right for You?

Chapter 2: Understanding How Super Works

Chapter 3: How Much Super Is Enough?

Chapter 4: Counting On Super Contributions of All Sorts

Chapter 5: Getting the Right DIY Super Advice

Part II: Setting Up a DIY Super Fund

Chapter 6: How Much Does a SMSF Cost?

Chapter 7: Simple Steps to SMSF Start-Up

Chapter 8: Individual Trustees versus Corporate Trustee

Chapter 9: Trustee Declarations and Other Promises

Part III: Running Your Self-Managed Super Fund

Chapter 10: Finding a Fund Administrator, or Not

Chapter 11: Do the Right Thing — Compliance

Chapter 12: Act Like You’re the Boss — Reporting

Chapter 13: It’s Always Tax Time

Part IV: Investing Your DIY Super Money

Chapter 14: Exploring the World of Super Investing

Chapter 15: Super’s Special Investment Rules

Chapter 16: Borrowing and DIY Super

Chapter 17: Investing in Property

Chapter 18: Investing and Super Tax

Part V: Paying Super Benefits from Your Fund

Chapter 19: Retiring is Just the Beginning

Chapter 20: Your Super and the Age Pension

Chapter 21: Running a DIY Super Pension

Chapter 22: Making Contributions while Taking a Pension

Chapter 23: Divorce and Your SMSF

Chapter 24: Looking After Your Family

Part VI: The Part of Tens

Chapter 25: Ten Special Features of DIY Super

Chapter 26: Ten Commandments of DIY Super

Part VII: Appendixes

Appendix A: SMSF Compliance and Administration Checklist

Appendix B: Handy Super Resources and ATO Publications

Index

DIY Super For Dummies 3rd Australian Edition

Introduction

About This Book

Foolish Assumptions

Icons Used in This Book

Beyond the Book

Where to Go from Here

Part I: Taking Control of Your Super

Chapter 1: Is DIY Super Right for You?

Taking Control is a RIPper Plan

Joining the DIY Super Club

Taking the ‘6C Challenge’ — Your DIY Super Roadworthy

Can you?

Control, control, control

Cost-effective, or not?

Competence counts

Compliance calls

Commitment issues

What Does a DIY Super Fund Look Like?

Take your pick — the ATO or APRA

Leading the charge with SMSFs

Satisfying the SMSF definition

Banking On Yourself, and Your CART

It’s Your Super Money — Invest Wisely

Your Retirement Super Star

Chapter 2: Understanding How Super Works

Facing Four Facts about Your Super Future

Living longer — ageing in comfort

Straining the government Age Pension

Staying healthy costs more

Expecting a reasonable lifestyle

Appreciating a Super Fund’s DNA

Recognising Your Super Type from a Distance

Discovering seven fund types on your super safari

Taking the wrap

What makes a SMSF different from other funds?

Getting Super-Fit —Your Start-Up Kit

Considering ‘big three’ super decisions

Understanding your member statement

Accepting super taxes

Starting a superannuation pension

Finding Out the Facts about Fees

Choosing Another Super Fund

Do you have super fund choice?

Deciding on your super options

Chapter 3: How Much Super Is Enough?

Deciding on the Lifestyle You Want

Comparing basic, modest and comfortable lifestyles

Living in comfort on $42,000 (or $58,000 for a couple) a year

Living in comfort and claiming the Age Pension

Wanting More Than $58,000 a Year

How Long Do You Expect to Live?

Earning Returns for the Long Term

Chapter 4: Counting On Super Contributions of All Sorts

Superannuation Guarantee — Compulsory Super

Are you entitled to SG?

How is your SG calculated?

Getting Serious about Super Contributions

Understanding the two types of contributions

Business as usual for under-65s

Different rules for over-64s

No voluntary contributions for over-74s

Making Before-Tax Contributions — Concessional

If the concessional cap fits …

Taking advantage of salary sacrifice

Other tax-deductible contributions

Splitting contributions with your spouse

Making After-Tax Contributions — Non-Concessional

Using the bring-forward rule

Cashing in on co-contributions

Contributing for your spouse may earn a rebate

Special Contribution Rules

Running a business

Suffering permanent disability

Investigating Asset Contributions to Your SMSF

Chapter 5: Getting the Right DIY Super Advice

Keeping It Clear and Simple

Getting On the Super Soapbox — Independent Advice

Who Can Give Advice about DIY Super Funds?

Asking an accountant

Finding a (licensed) financial adviser

Looking up a lawyer

Appointing an auditor

Relying on the regulator

Opting for Administration Assistance

Unhappy with Your DIY Super Advice?

Part II: Setting Up a DIY Super Fund

Chapter 6: How Much Does a SMSF Cost?

Appointing an Administrator or Accountant … or Not

SMSF Start-Up Costs

Costing trust deeds and trustees

Opting for the DIY package deal

Budgeting for Annual SMSF Costs

Choosing from the administration menu

Calculating investment costs and related expenses

Accounting for One-Off Costs

Chapter 7: Simple Steps to SMSF Start-Up

Knowing When to Go Solo or Seek Help

Setting Up Your SMSF in Simple Steps

Step 1: Draft a trust deed (and choose a name)

Step 2: Appoint the trustee (individuals or corporate)

Step 3: Admit members (and supply Product Disclosure Statement)

Step 4: Sign the ATO SMSF trustee declaration

Step 5: Open a bank account

Step 6: Establish accounting and administrative procedures

Step 7: Accept contributions

Step 8: Apply to be regulated (and other preliminary matters)

Step 9: Draft your fund’s investment strategy

Step 10: Prepare your fund for investing

Before You Pop the Champagne

Changing Super Funds

Redirecting SG contributions to your fund

Receiving employer contributions in SuperStream form

Redirecting salary sacrifice contributions

Transferring current benefits

Chapter 8: Individual Trustees versus Corporate Trustee

Drawing a Line between Trustee and Member

Meeting the Standards of a SMSF Trustee

Protecting your residency status

No employer/employee relationships

No dishonesty offences

No undischarged bankrupts

Previously naughty trustees

Deciding between Individual Trustees or a Corporate Trustee

Choosing a Corporate Trustee

Single Member SMSFs: A Special Case

Chapter 9: Trustee Declarations and Other Promises

Signing the Trustee Declaration

Keeping Mindful of Your Trustee Duties

Meeting the Sole Purpose Test, Always

Taking Note of Three Important Challenges

Breaking Your Trustee Promises

Reacting to your auditor’s concerns

Asking for administrative penalties

Allowing for rectification and education directions

Dealing a death blow to SMSF trustees

Losing your fund’s complying status

Part III: Running Your Self-Managed Super Fund

Chapter 10: Finding a Fund Administrator, or Not

Taking Aim at SMSF Administration

Debunking the DIY Super Myth

Going It Alone

Delegating Your CART Obligations

Seeking service quotes

Appointing your administrator

Don’t Be a Clever Clogs on Tax

Revving Up Arrangements for Retirement

Chapter 11: Do the Right Thing — Compliance

… Because It’s the Law

Monitoring the Must-Do’s

Penalising Pesky Trustees

Copping an administrative penalty

Forcing you to lift your super game

Thou Shalt Comply with the Sole Purpose Test

Doing your SPT homework

Citing some examples of SPT

Chapter 12: Act Like You’re the Boss — Reporting

Raising the Bar on Record-Keeping

SMSF Reporting (and Record-Keeping) in a Nutshell

Delivering Accurate Accounting and Financial Reporting

Keeping the ‘Taxman’ Happy — Tax Records

Lodging SMSF Annual Returns

Ticking off by lodgement date

Combining tax and regulatory information

Member contributions information

Auditing Your SMSF Auditor

Ticking four items on your auditor checklist

Receiving a reprimand from the auditor

Chapter 13: It’s Always Tax Time

Unlocking the Door to a Tax-Free Future

Reducing Income Tax the Super Way

Copping Contributions Tax

Earnings Tax in Accumulation Phase

Including contributions as earnings

Discounting capital gains

Tax-Exempt Earnings in Pension Phase

Paying Tax-Free Benefits to Over-60s

Part IV: Investing Your DIY Super Money

Chapter 14: Exploring the World of Super Investing

Getting Ready for the Investment Roller-Coaster

How Steep Is Your Investment Learning Curve?

Understanding the Basic Ingredients of Super Investing

Don’t forget about risk and return

Investing for the long tomorrow

Appreciating Asset Classes Leads to Investment Success

Cool as cash

Fuzzy fixed interest

Betting on bricks and mortar — property

Sailing in on shares

Alert to alternative investments

Take Your Pick: Investing Directly, Using Managed Funds or Wraps

Chapter 15: Super’s Special Investment Rules

SMSF Investing for Two Stages

Remembering the Three Musts …

Wait! Set Your Fund’s Investment Strategy

Identifying your goals — your DIY super fund’s investment objectives

Assessing the insurance needs of your SMSF members

Getting into position — your DIY super fund’s asset allocation

Ready, set, go! Selecting, and monitoring, specific investments

Reviewing your fund’s investment strategy and asset allocation

Benchmarking Your DIY Super Returns

Walking the Investment Tightrope

Meeting the sole purpose test

Keeping fund assets separate

Ensuring assets are in the fund’s name

Lending money to members — don’t!

Purchasing assets from members or relatives

No direct borrowing of money

Investing too close to home

Keeping your investments at arm’s length

Chapter 16: Borrowing and DIY Super

No Borrowing is the General Rule

Understanding the Three Special Borrowing Exceptions

Borrowing to cover benefit payments

Borrowing to cover settlement of a share transaction

Purchasing an asset using a limited recourse borrowing arrangement

ATO’s Call: Nine Borrowing Scenarios

Chapter 17: Investing in Property

The Short Story on SMSF Property Investing

Investing directly in property

Indirect property investing

What’s All the Fuss about Residential Property?

Special Opportunities for Business-Related Property

Pumped-Up Property Plans — LRBAs

Ignoring hype about LRBA magic pills

Passing six LRBA tests

Understanding the LRBA difference between repairing and improving

Chapter 18: Investing and Super Tax

Educating Yourself about Earnings Tax

Accounting for 15 per cent earnings tax

Accepting a higher tax bill for related-party income

Eliminating Earnings Tax in Pension Phase

Making Tax Magic with Franked Dividends

Reducing tax during accumulation phase

Receiving tax refunds during pension phase

Coping with Capital Gains Tax

Part V: Paying Super Benefits from Your Fund

Chapter 19: Retiring is Just the Beginning

Navigating Your Retirement Road

Taking terminology to task

Preparing for R day

Retiring too early

Working, and contributing, after retiring

Preserving Your Super Fortune

Gaining access to your super benefits

Retiring is a must, in most cases

Leaving your money in super indefinitely

Taking a Lump Sum and/or Pension

Retiring Early (Before 60) Means Tax — Usually

Retiring On or After 60 Means No Tax

Chapter 20: Your Super and the Age Pension

How Does Your Super Affect Age Pension Entitlements?

Claiming the Age Pension

Reaching Age Pension age

Receiving an indexed pension for life

Passing Your Age Pension Exams

Taking the assets test

Taking the income test

Deeming Income from Super Pensions and Other Financial Investments

Chapter 21: Running a DIY Super Pension

Facing the DIY Fork in the Road

Retiring using your SMSF

Cashing out and buying a commercial pension

Changing from Accumulation to Pension Phase

Considering the many SMSF combinations

Preparing your SMSF pension paperwork

Contemplating Your DIY Super Pension Options

Activating your account-based pension

Taking a TRIP

Reminiscing about complying income streams

Starting Your SMSF Pension — One Step at a Time

Calculating Your Pension Components

Calculating the tax-free component

Calculating the taxable component

Sliding along the proportioning rule

Chapter 22: Making Contributions while Taking a Pension

Retiree-Friendly Contribution Rules

Running Two Phases Involves Extra Expertise

Mixing it up equals actuarial certificate

Contributing and starting a pension in same year

Restarting Pensions Means New Components

Recalculating your benefit components

Running, or stopping, more than one SMSF pension

Taking a TRIP Saves Tax

Chapter 23: Divorce and Your SMSF

Dissecting Your Super in Three Ways

Doing the Super Splits

Understanding the splitting process

Splitting more than straws

What Happens to Your SMSF After Divorce?

Chapter 24: Looking After Your Family

Protecting Your Health, Wealth and Family

Introducing life insurance and protecting income

Using your will

Nominating beneficiaries

Where Does Your Super Go When You Go?

Depending On You — Your Dependants

Paying lump sum death benefits

Paying income stream death benefits

Tracking the Taxman from Beyond

No tax for dependants

Non-dependants pay tax

SMSF Succession Planning

Part VI: The Part of Tens

Chapter 25: Ten Special Features of DIY Super

Becoming a Member of a Fast-Growing Club

Having No More than Four Members

Appreciating that You’re the Boss

Finding Flexibility

Understanding It’s a Super Structure

Managing Tax for You, Not for Thousands

Running Two Phases, on Your Terms

‘Frankly, My Dear, I Love Franked Dividends’

Creating Family Wealth

Considering a Refund of Contributions Tax

Chapter 26: Ten Commandments of DIY Super

You Shall … Always Remember You’re in Control

… Comply with the Sole Purpose Test

… Follow Your Fund’s Trust Deed

… Comply with the SIS Act

… Formulate an Investment Strategy

… Not Break Any Investment Rules

… Arrange for Your SMSF to Be Audited

… Lodge Tax and Compliance Returns

… Keep Your Fund Separate from Your Personal Finances

… Seek Professional Advice When Necessary

Part VII: Appendixes

Appendix A: SMSF Compliance and Administration Checklist

Appendix B: Handy Super Resources and ATO PublicationsIndex

Index

About the Author

Business & Investing

Connect with Dummies

Guide

Table of Contents

Begin Reading

Pages

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47

48

49

50

51

52

53

54

55

56

57

58

59

60

61

62

63

64

65

66

67

68

69

70

71

72

73

74

75

76

77

78

79

80

81

82

83

84

85

86

87

88

89

90

91

92

93

94

95

96

97

98

99

100

101

102

103

104

105

106

107

108

109

110

111

112

113

114

115

116

117

118

119

120

121

122

123

124

125

126

127

128

129

130

131

132

133

134

135

136

137

138

139

140

141

142

143

144

145

146

147

148

149

150

151

152

153

154

155

156

157

158

159

160

161

162

163

164

165

166

167

168

169

170

171

172

173

174

175

176

177

178

179

180

181

182

183

184

185

186

187

188

189

190

191

192

193

194

195

196

197

198

199

200

201

202

203

204

205

206

207

208

209

210

211

212

213

214

215

216

217

218

219

220

221

222

223

224

225

226

227

228

229

230

231

232

233

234

235

236

237

238

239

240

241

242

243

244

245

246

247

248

249

250

251

252

253

254

255

256

257

258

259

260

261

262

263

264

265

266

267

268

269

270

271

272

273

274

275

276

277

278

279

280

281

282

283

284

285

286

287

288

289

290

291

292

293

294

295

296

297

298

299

300

301

302

303

304

305

306

307

308

309

310

311

312

313

314

315

316

317

318

319

320

321

322

323

324

325

326

327

328

329

330

331

332

333

334

335

336

337

338

339

340

341

342

343

344

345

346

347

348

349

350

351

352

353

354

355

356

357

358

359

360

361

362

363

Introduction

T he past few years have been extraordinary in terms of economic downturns, volatile investment markets, and the ensuing bumpy ride endured by investors, including DIY super fund trustees.

Throughout this time, hundreds of thousands of DIY super fund trustees have been investing super money in these volatile markets, and continuing to look after the needs of fund members.

In June 2014, when I began work on DIY Super For Dummies, 3rd Australian Edition, the investment markets were rebounding from a torrid few years, although by the time I finished writing this book several months later, the investment markets were again a little bumpy.

More seriously, in mid-2007, when I first met my publisher to discuss writing the first edition of , the world’s investment markets were booming and Australia was enjoying an extended wave of economic growth. The super laws had just been changed to deliver tax-free super for over-60s and, as a result, the future was looking very bright indeed for Australia’s retirees.