SWSCU still open

Written by Brady Kenny

Further to the recent NSW Government announcements regarding the lockdown of non-essential services, SWSCU will remain open for our members. Please remember to follow Government advice on social distancing and hygiene when visiting our branches for your own protection and that of our staff. Thank you for your understanding as we negotiate these unique circumstances. Please feel free to contact our branch via phone on 02 6384 1111 during business hours if you have any questions as we endeavour to continue providing personal service to our members.

Notice of Rate Change

Written by Brady Kenny

Please be advised we have updated the interest rates on the following savings and transaction accounts. These changes will be effective from 1 April 2020.

The new rates are listed below:

All other terms and conditions remain the same. For full details please refer to our Conditions of Use available online at swscu.com.au or at any of our branches.

Sponsorship February 2020

Written by Hannah Oliver

South West Slopes Credit Union is proud to be able to provide sponsorship during the month of February to the following local community groups and clubs:

Cootamundra Country Club Women’s Bowling Section

West Wyalong Harness Racing

The Rainbow Ball Committee

Young Amateur Swimming Club INC

Young Lady Golfers

Temora United Soccer Club

Cootamundra Sports Foundation

Young Junior Rugby Union Club

West Wyalong Horse Sports & Rodeo Association INC

Temora West Public School P & C Association

Young Croquet Club INC

Riding for the Disabled NSW Young Centre

All Breeds Poultry Club of Young

Temora & District Sports Council

Lions Club of Young INC

Is a Self-Managed Super Fund right for you?

Written by Hannah Oliver

The growth in self-managed super funds suggests that they are an appealing option, but you need to consider the whole picture to make the best choice. Our financial planning partner, Bridges, explains the pros and cons.

There is no doubt that self-managed super funds (SMSFs) are a popular choice for Australians when it comes to saving for retirement.

The latest statistics from the Australian Prudential Regulation Authority (APRA) and the Australian Taxation Office (ATO) indicate that in June 2017, there were almost 600,000 SMSFs in operation1, and they controlled almost $700 billion in assets2. This represents nearly one-third of the country’s total super assets of 2.3 trillion.

Almost 30,000 new SMSF funds were established in the 2016-17 tax year1, which continues a consistent pattern of growth in this sector.

So what is the attraction?

Being able to set your own investment strategy, and the increased scope in investment options — such as direct property investment and collectibles — has attracted many to this form of superannuation saving.

Many also believe that costs can be minimised if they run their own show, giving them more flexibility on when they can move to retirement and start drawing a pension from their accumulated funds. Some may also be attracted to the idea of cycling some of their super investment back into their own business, such as through using their fund to purchase business premises.

There are also some advantages that SMSFs provide in relation to estate-planning. For example, a death benefit can continue to be paid to a dependant in the form of a pension, which means the super fund doesn't have to be closed upon death.

What’s the downside?

Having an SMSF involves a commitment to running the administration, compliance, and investment strategy for your fund and there are stringent rules to be followed. If you slip up, there are significant financial penalties that may be applied. In short, the buck stops with you.

Certainly, you can obtain advice and assistance to manage the administrative and investment burden, but this comes at a cost.

A major factor in deciding whether an SMSF is right for you is the size of your super assets. Generally, you need a substantial starting sum in the hundreds of thousands to make it worthwhile, and to create the cost efficiencies that can compare favourably with using a retail managed fund.

Are you better off in a managed fund?

For some of us, a retail managed fund may be a better option, particularly if you are not prepared to take on the responsibilities that come with running an SMSF.

Managed funds have the advantage of taking care of all the trustee responsibilities and fund administration on your behalf. For some, this can be the deciding factor.

While managed funds cannot provide all of the investment options and flexibility that are possible in an SMSF, they can still provide highly sophisticated and diverse asset allocations that can match well with your desired investment preferences and risk profile. They also have the potential to generate significant returns.

Cost-wise, you know upfront what a managed fund will charge in terms of entry, exit, and management fees. The question of whether this will be more or less than the costs of running your own SMSF does not have a simple answer. Generally speaking, it will depend greatly on the size of your super assets: The higher the balance, the more scope there is for SMSFs to have a cost advantage.

Weighing up the pros and cons

The telling factor in whether an SMSF is right for you will often come down to getting the right advice that takes your specific circumstances into account. There will never be a cut and dried answer on whether an SMSF is your best option because of all the variables relating to cost, investment strategy, administrative obligations, insurance, and personal desire to control your own fund.

A financial adviser can help you weigh the benefits against the risks to make an informed choice that suits your personality and financial situation. They can also give you expert advice on how to best manage the responsibilities of running an SMSF using specialised service providers. Seeking such advice could well be the best first step to take.

Sources:

1 Australian Tax Office SMSF Statistical Report.

2 Australian Prudential Regulation Authority.

Take the next step To discuss your financial situation, make an appointment with a Bridges financial planner. We have an established alliance with Bridges, to provide our customers with financial advice. Bridges has been helping Australians with financial advice for 30 years. A Bridges financial planner will develop a plan specifically for you; one that’s tailored to your needs and circumstances to help you achieve your goals. To make an appointment with a Bridges financial planner, call 02 6384 1111. The initial consultation is complimentary and obligation free.

Bridges Financial Services Pty Ltd (Bridges). ABN 60 003 474 977. ASX Participant. AFSL 240837.

This is general advice only and has been prepared without taking into account your particular objectives, financial situation and needs. Before making an investment decision based on this information, you should assess your own circumstances or consult a financial planner or a registered tax agent.

Examples are illustrative only and are subject to the assumptions and qualifications disclosed.

Part of the IOOF group

In referring customers to Bridges, South West Slopes Credit Union does not accept responsibility for any acts, omissions or advice of Bridges and its authorised representatives.