Moving to a Managed Fund

Hi,

We would really appreciate some expert advice, we’re in a financial mess at the moment but it may be salvageable with the right plan.

My husband and I have approx $86,000 in a SMSF. We are using E-Superfund to do yearly accounting as they charge a low flat rate, around $700.00 We are self-employed, husband is 73 and I’m 66, we anticipate working another 5 years+. We owe around $145,000 on our home and have around $10,000 in credit card debt through paying off our children’s debts. We were using one of the share buying/selling advisory newsletters to invest in shares and it worked well for awhile but the past 2 years it has been losing money.

My question is should we consider moving to a managed fund or would the yearly fees be too great for the small amount we have in super? Finally if you think it’s a good idea is there a fund you would recommend please?

Kind regards,

A: Thanks for the question.

I am sorry to hear about your situation – hopefully, I can help a little.

Firstly, it is commendable that you are using E-Superfund to keep the fees down, but arguably, $86,000 is too small a balance to run a SMSF. You may be better off using one of the industry funds such as Australian Super, REST or Catholic Super. They are relatively low fee, and allow you to choose the investment option that suits best.

That said, my first recommendation would be to pay off your credit card loan, and then pay off as much of your home loan as you can. You should be able to withdraw your super monies tax free. If that results in closing your SMSF, then any future super contributions that you choose to make could go into one of the industry funds I mentioned above.

It is a tough business trading shares to boost investment returns – so  I understand  why you may be questioning the merits of keeping this going.

Best regards


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