Hi @Cabbie and @Mike B (and anyone else approaching the end of their working days, lol) Although, that ain't necessarily true: some pro-active youngsters in their 20s and 30s have SMSFs too ...
So, first the disclaimer: this is based on my circumstances etc.
Although I have a very strong bias against the financial advice industry, my wife and decided to go to a truly independent one. They do exist, just hard to find. Apparently about 80 or so in the entire country. The guy we are using has no ties to any banks or insurance companies. No kickbacks or trails. He is qualified, experienced and impartial and it cost us about $3,000. For that we had a number of long chats and a Statement of Advice (written by a human being and not an algorithm) which covered 3 very different scenarios in the short/medium term. This advice is ongoing and we are both very happy so far. I reckon seeing someone who is impartial and qualified to give advice is important, doesn't have to be a financial adviser though.
We thought long and hard about a SMSF. Sounds sexy, but do we want all the responsibility? Our adviser's advice was no, don't do it. His advice was primarily concerned about the health of my wife and reducing the stress in her life etc. This is where your own personal circumstances make all the difference and why our experience probably has no bearing on anyone elses.
Most of our "wealth" is tied up in our Sydney house, which we are still living in. If/when we sell and buy a smaller/cheaper place, then our financial future looks good.
In the meantime, we both work and struggle to pay the bills some months. Has been this way for about 10 years, which is kinda crazy but there you go.
There are many options, which is why we were not comfortable making this decision on our own - it's too important to make assumptions and then find out that the ATO disagrees. Salary sacrificing, Transition to Retirement Pensions etc - important to know about this stuff and not get it wrong! This is what our adviser suggested in one scenario based on our circumstances. We both continue working; my wife salary sacrifices when her taxable income gets to $37,000, we both start Transition to Retirement pensions. This would allow us to maintain a similar household income but would allow my wife to work fewer hours by us essentially slowly spending our accumulated Super now to make up the shortfall. The govt is changing the rules again so the world changes a bit at the start of 2017.
Going to the financial adviser was part financial advice/part marriage counselling He asked a LOT of questions about what we wanted to do; our interests; what we would like to change about our present circumstances; our adult sons. I never felt I was being sold something - impressive.
So, my wife and I had some chats and she came out with an idea which I thought wasn't going to happen at all: how about we start an SMSF with our combined Super now; split the total into various investments and leave a reasonable parcel for share trading; give it a go for about 2 years and see what happens? If it all ends in tears and we lose some money, then we have the house to fall back on. If it goes well, then we might do better than putting a majority in a managed fund and getting close to the index averages. I wan't expecting that.
Ran that idea past our adviser. He recommended setting up an account with Macquarie. He sent me all the links and I started reading. Pretty much incomprehensible to me. The account is set up by an adviser, but the language isn't friendly at all to a layman.
I looked at eSuper (online) and liked it. Read through the site, sent links to my adviser. He had a look and liked it as well, so we're going with them. They also organize the annual audit. We trade with Commsec, which eSuper can access the data from, so shouldn't be much work on our part to do the annual return.
We have set up a company ($650 to ASIC) with us as the 2 directors. Didn't have to, but will be easier when one of us croaks - the remaining person can still fully transact on the account as the remaining director.
From the time we pressed the Submit button to create our online account to the time we got our company ACN via email took 30 minutes - no kidding. When I created a company in 1990 that process took 3 weeks.
So, we'll fill out the forms (which arrived within 48 hours) this weekend. This will create a CBA transaction account, COMMSEC account (although we already have one each, so just let them know our account numbers), Audit authorization, ABN registration and some Trustee stuff - will take about 2 hours.
You do have regulatory requirements, but I've run a company in a past life for years, and this is much much simpler. Anyone who is organized shouldn't have hassles, I'd say.
So, that's where we're up to right now. I know we don't do "advice" on HC, but I would make a general suggestion: if you're approaching the end of your working life and if you're thinking about setting up an SMSF and if you have a significant other in your life, then I reckon the very very best thing you can do is to make absolutely certain that both of your know *exactly* what is going to happen and how this is going to work. Don't be the one who shoulders all the responsibility and leaves the other person in the dark. I am very lucky in this regard, and grateful too.
Yep, another long rambling reply from DD ... I'll keep you posted about future developments
Although, that ain't necessarily true: some pro-active youngsters in their 20s and 30s have SMSFs too ...
