SMSFs

Old Codger

Old Codger

Active Member
Silver Stacker
On behalf of daughter, can she start a SMSF that is IN ADDITION to her normal work (COLES) superannuation account.

Two, maybe three Kgs of PAMPs or Perth bars.

.....and how much does it cost to set one up?

OC
 
She definitely can but having multiple super accounts means you are paying duplicate admin and fees on those multiple accounts.

A few Kgs of silver will not be enough to justify IMO (a few kegs of gold would be a different). She would also need to contribute cash to cover admin and supervisory levies every year.
 
Start up costs maybe $1000
Ongoing costs $1000 - $3000 pa

Definitely not worthwhile for a few silver bars.

Ballpark figure wait until $150k total assets with ongoing contributions of $20k plus per year.
 
As far as I can see it...

Benefits of having Precious Metals in a SMSF: You can buy them cheaper by salary sacrificing your wages and buying silver from the fund, you get more silver because instead of paying tax at your normal rate you pay tax at 15% I think.

Drawbacks: Can't access that money until you retire, it isn't really yours.
You have to pay fees, I use esuperfund and it is only $700 per annum and $150 audit fees.
At some stage they might demand that you keep the metals in a secure storage facility with insurance, more expense.
If you don't already you may soon have to keep personal and SMSF metals separate, two safes?
You might not be able to buy the type of silver you like due to the interpretation of the laws. Restricting what you can buy, even if you can get some cheaper silver.
Some low paid government drone or contractor now knows that you have a financial interest in precious metals.
You might never get to see your SMSF if they decide they aren't going to let you take it all out in one go when you retire.
You have to keep receipts for everything.

All in all, not really worth it.

I have a SMSF with eSuperfund and I have some unalloacted precious metals held with Goldstackers. I also have my industry superfund which I can't get out of. I salary sacrifice into my industry super, the employer increases their contribution and then once a year I roll it all over into my SMSF.

It is a bit more paperwork but in my situation it suits me.
 
Jislizard said:
At some stage they might demand that you keep the metals in a secure storage facility with insurance, more expense.
Click to expand...

"They" can't demand anything. It is legal to keep the metal yourself and not have it insured, you (as the SMSF director) just have to note the reason why you did it.
Can they change the SMSF laws in the future?, yes.
 
No, I was talking Gold!

A start figure of about $125,000.

I presume she would store the Gold in our safe custody vault box.

OC
 
Table 2: SMSFs 2014 average operating expense ratio for different account balances

Fund size Average operating expense ratio (%)* Average operating expense ($)

$1-$50,000 12.05% Up to $6,025
$50,001- $100,000 5.99% $2,995 to $5,990
$100,001 $200,000 4.86% $4,860 to $9,720
$200,001 -$500,000 2.54% $5,080 to $12,700
$500,001 $1 million 1.35% $6,750 to $13,500
$1,000,001 $2 million 0.91% $9,100 to $18,200
$2,000,001 and higher 0.63% $12,600 and higher

http://www.superguide.com.au/smsfs/...cost#So_how_much_should_a_DIY_super_fund_cost
 
Old Codger said:
No, I was talking Gold!
A start figure of about $125,000.
I presume she would store the Gold in our safe custody vault box.
Click to expand...

Now you're talking!
As someone else mentioned though, income needs to continue to come in to pay for the fees. Gold doesn't produce any income or dividends.
 
Agnostic said:
Table 2: SMSFs 2014 average operating expense ratio for different account balances
Fund size Average operating expense ratio (%)* Average operating expense ($)
$1-$50,000 12.05% Up to $6,025
$50,001- $100,000 5.99% $2,995 to $5,990
$100,001 $200,000 4.86% $4,860 to $9,720
$200,001 -$500,000 2.54% $5,080 to $12,700
$500,001 $1 million 1.35% $6,750 to $13,500
$1,000,001 $2 million 0.91% $9,100 to $18,200
$2,000,001 and higher 0.63% $12,600 and higher
http://www.superguide.com.au/smsfs/...cost#So_how_much_should_a_DIY_super_fund_cost
Click to expand...

Those figures are ridiculous.
Esuperfund only costs $799 a year to manage the thing. 0.8% on $100k
 
I am shocked at the fees!

Daughter buys about $125,000 of gold bars, stores them for years and never touches them, and it costs a bucket!

???

OC
 
Old Codger said:
I am shocked at the fees!
Click to expand...

Why?
A SMSF is a registered company that must have it's tax returns filled, bookwork done etc. An accountant to do that costs money. Accountants don't work for $30 an hour.
You could do it yourself if you know how to do it.
My Pty Ltd business costs me about $4k in accounting fees a year to manage. So $800 for a SMSF is pretty cheap by comparison.
 
Agree, but the 'company' has no trading transactions from year to year.

It just sits there with its only asset in a bloody great vault!

OC
 
Hi OC,

Costs are "high" in the sense that you know where the money actually goes! There are "high" fees in communal funds too, but they are absorbed and you don't seem to feel it. They do tend to be lower though.

For me, it is the freedom that you are in control of the money, which is something you need to decide is worth it for you. I don't like the idea that one day, by the stroke of a pen, your money locked up in an industry fund is syphoned away to a government funded infrastructure project. I also believe that one day they will stop new SMSF from starting. I am not sure of the day, but I want to know that I am not "too late" and I have done my best to make money for my retirement. Anyway, I am happy to never "retire" as I want to work part-time till I die. It is the best way to stay healthy and active and to keep "young and hip" as you are constantly keeping up with the younger generations.

Shiny
 
Old Codger said:
Agree, but the 'company' has no trading transactions from year to year.
It just sits there with its only asset in a bloody great vault!
Click to expand...

Ok, if it's that simple then it should be easy to do your own return and SMSF paperwork compliance yourself, right?
 
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