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For many Australians, running a self-managed super fund has been a satisfying way to keep control of retirement savings. With time, the effort and complexity can grow. The question becomes whether to continue, to simplify the way the fund runs, or to wind it up and move to a mainstream fund. This article explains the common triggers for review, the main choices available, the steps to wind up, and mistakes to avoid. It finishes with a short self-check and where to get help.
The common triggers to review
Ageing trustees and changing health can make compliance and investment decisions harder. If one spouse has always handled the fund and the other is unsure, the risk increases when illness or loss of capacity strikes. Increasing paperwork can sap confidence. Quarterly and annual obligations such as accounts, minutes, audits, and pension paperwork do not pause. Costs can rise as balances fall or as portfolios hold more illiquid assets. Long periods overseas can affect central management and control. Liquidity for pension payments, tax, and fees needs reliable cash flow. Property or private investments can make this difficult.
Your three main choices
Continue with the SMSF and tune the way it runs. Refresh the investment strategy, simplify the asset mix, and set calendar prompts for contributions, pensions, and the audit. Add help from an SMSF administrator, a bookkeeper, or an adviser. Ensure both spouses have online access and understand where records live.
Continue with changes to structure. Moving from individual trustees to a corporate trustee can reduce signature risk and make succession easier. Rebalance towards assets that are easier to manage and that can produce steady income and liquidity.
Wind up and roll member benefits to an appropriate super platform or fund that suits your needs and offers the flexibility you require. Member benefits can be rolled to one or more funds while keeping pension income and insurance needs in mind. This path suits many older trustees who want a simpler life and fewer moving parts.
The wind-up path in plain English
Read the trust deed and record the decision to wind up in minutes. Follow the deed’s process at each step. Obtain current valuations for all assets including listed securities, cash, property, and any unlisted units or loans. Decide asset by asset whether to sell or transfer in specie to the receiving fund if that fund accepts the transfer. Pay outstanding liabilities such as tax, administration fees, and adviser invoices. Close transaction accounts and term deposits. Cancel any debit cards linked to the fund’s accounts. Work with your licensed financial adviser to time
rollovers and contributions, and to manage any pension stops or starts so the fund does not accidentally breach its obligations. Arrange the final audit and lodge the final annual return that shows the fund is being wound up. Keep all records in secure digital form.
Mistakes that cost money
Leaving small residual amounts in a bank account can delay closure. The SMSF is not finished until every dollar is accounted for and all facilities are closed. Letting insurance lapse without replacement can leave families exposed. If you rely on cover inside super, line up any replacement cover before the rollover. Losing documents creates problems later. Keep copies of deeds, minutes, valuations, member statements, and tax returns. Rushing asset sales can lock in tax or poor prices. Plan ahead so you can choose the timing.
A five-minute self-check
Do both spouses know the logins and where documents are stored. Could the fund run smoothly for six months if one person were unwell. Do the assets produce the income needed without stress. Are annual costs still reasonable for the current balance. Do you have a plan for extended travel or a change in residency.
Where to get help
An SMSF specialist or licensed financial adviser can help you test options, map the steps, and set an appropriate pension and drawdown plan.
An administrator or accountant can prepare final accounts, returns, and rollovers.
An estate lawyer can align nominations, attorney powers, the deed, and company documents so the legal framework supports your super and estate intentions.
A licensed financial adviser can also help design a low effort retirement cashflow strategy using an appropriate super platform or fund with the right flexibility, not limited to retail super options.
Bottom line
An SMSF is a means to a bigger end that includes lifestyle, security, and peace of mind. If the structure now creates more stress than value, a clean wind up can be the most valuable decision you make. If you wish to keep running the fund, a small investment in structure and support can reduce risk and restore confidence.
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The Money & Life website is operated by the Financial Advice Association (FAAA). The views expressed in this article are those of the author and not those of the FAAA. The FAAA does not endorse or otherwise assume responsibility for any financial product advice which may be contained in the article. Nor does it endorse or assume responsibility for the information.
