Setup SMSF, invested some money into PM's, looking for financial advice

Discussion in 'Superannuation, SMSF & Personal Insurance' started by Sunstoke, 9th Aug, 2017.

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  1. Sunstoke

    Sunstoke New Member

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    Hey Guys,

    Looking for some general advice here, I understand we have a bit of a mish-mash of a situation. If anyone has been in a similar scenario, or has experience in Super / SMSF / Financial Planning I would like to hear your thoughts. Mods - If you think this would be better posted in another section - feel free to move.

    My wife & I who are in our early/mid 40's have setup a SMSF in which we have both done a partial transfer from our existing super funds. We were advised to keep our existing super funds active for their life insurance / TPD components.

    I believe my wife's account is an accumulation style fund, whilst mine is a defined benefit. My wife was able to move most of her money from her existing super fund into the SMSF, however, I was only able to move about one third of my super into the SMSF.

    I have been told by friends to never leave a Defined Benefit fund (as a side note my company may have the opportunity in the future to move from DB to Accumulation style fund), this would allow me to move more into my SMSF & put it into investments of my choice

    On the other hand, we can keep putting money into our existing Super accounts, so they continue to rebuild and have these as an alternate / backup plan. Or do a partial transfer each year into the SMSF.

    We are looking to invest the funds in the SMSF into gold, silver, maybe some mining shares & crypto currencies for the medium term (approx 5 years), but are open to reviewing options depending upon returns.

    As I said - a bit of a mish-mash, but all advice is appreciated :)

    Cheers
    Tim
     
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  2. retirealready

    retirealready Member

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    @Sunstoke - Defined benefit schemes are all but slowly dying. If you are on a good scheme backed by a stable organization/company then by all means don't mess with it. Most defined benefit schemes pay out a lot more than what goes in but again there a lot of variables. By withdrawing from your defined scheme, you may have already damaged long term payouts. You should definitely seek professional advice on that part.

    Leaving some funds in an industry fund to maintain insurance is a common trend. The other option is to get proper insurance in your SMSF, either through specialist insurers or regular insurance companies that do insurance with "partial rollover" essentially a super-fund setup just for insurance. Many big players offer this but you need to go through a broker/planner. Don't cancel your industry-fund insurance just yet.

    Your Super(SMSF or not) is for your retirement. Gambling with retirement funds is a no-no. So your statement about putting it in metals, some mining shares and even worse crypto currencies is a huge gamble and is generally not recommended. You need to have a diversified portfolio and an investment strategy to match. You can always enlist professional help but watch for vested interests from planners. A no commission planner is more likely to have your interests in mind than their own financial targets.

    Some reading:
    SMSF investment: Three most popular asset classes, and the rest
    SMSF confidential: the inside story on DIY super funds
     
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  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    You should get some professional advice as you don't know what you don't know.
     
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  4. Corey Batt

    Corey Batt Well-Known Member

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    Talk about a prime example for needing specific advice.

    Both Terry and retirealready have hit on a few key points with your situation. Depending on who the defined benefit is with and specific fund rules will determine what's the best way forward.

    Not enough info to really go into much more details - it's best you specific with an adviser who can look at your situation and needs and give you advice tailored to you.
     
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  5. SMSFCoach

    SMSFCoach Member

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    You really need to seek advice on what you are trying to achieve with the SMSF. I would rarely if ever recommend leaving a defined benefit fund so seek advice before you do any more transfers. I understand your wish to invest in alternative assets but maybe consider hedging your bets by retaining your DB account and only allocating small allocations to risky assets via the SMSF but sit down and work out an investment strategy for the fund and set targets to hold yourself accountable. 'Retirealready' is on the mark about insurance. My one caution is that some insurers refuse to pay if you are not making contributions and others cancel the cover automatically after a certain time span.
     
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  6. pwnitat0r

    pwnitat0r Well-Known Member

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    If you have a defined benefit scheme, you could potentially be sitting on a big pay out in the future. These are like the holly grail of super.
     
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  7. AnthonyK

    AnthonyK Active Member

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  8. AnthonyK

    AnthonyK Active Member

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    Hello Tim and All
    I cut my super teeth in the early 70's advising on Corporate DB's and Group Life pools.
    The most important word in the DB document is the "Vesting" rights.
    You can end up with a very small bit of a large benefit based on the Vesting.
    Do your homework Tim and also check what they have already paid out to leaving/retiring DB members.
    Control your own destiny as much as possible with your SMSF.
    Good Luck.
    Regards
    AK
     
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