Most Aussies don't know if they'll be able to afford retirement.
With great power comes great responsibility.
ATO's watching everything.
Get it right from the start.
A self-managed super fund is a trust type format
that has a specific rule set that goes with it.
Effectively what it's called, you know,
self-manage their superannuations.
Access different asset classes that they would generally not be able to
access in a traditional superannuation account
such as direct property, gold, private, companies, crypto and bitcoin.
You've got to maintain separation of your superannuation funds from your own personal
funds.
There are some pretty hefty penalties that can be applied by the ATO.
We've had funds that are being set up within less than four weeks.
I've been working within the Self-Managed Super Fund for 25 years now, working with
accounting firms, financial planning firms, software companies.
The joy and what I find so amazing within the Self-Managed Super Fund is you can actually
take Bitcoin into self-custody.
you can take the power, you can take control and...
Simon, most Aussies don't know if they'll be able to afford retirement.
Some estimates say we need about $3 million in today's dollars to be self-funded.
Most workers are relying on the traditional superannuation fund
that may or may not be just keeping up with inflation.
Simon, you help people take control of their retirement
by setting up what's called a self-managed super fund.
I guess the first question, what exactly is a self-managed super fund and how does it differ from a superannuation account?
Yeah, so you're right. Many people are relying on their traditional super and generally don't think of SMSF as an option.
To answer your question, a self-managed super fund is essentially a trust type format that has a specific rule set that goes with it to enable people, as you say, to effectively what it's called self-manage their superannuation.
So as opposed to having a corporate trustee or one of the larger industry funds managing their superannuation, they can set up a self-rentice super fund and act as their own trustee for that self-rentice for their retirement.
It allows them to access different asset classes that they would generally not be able to access in a traditional superannuation account.
Many of the larger industry and corporate funds are restricted to different asset types,
things such as direct property, gold, bullion, other sort of asset classes, private companies,
and things such as crypto and Bitcoin.
So by setting up a self-managed super fund, you get those additional options to invest
it, the investor or super, however you choose within those parameters and effectively, as
as we say, take control of it yourself and manage it.
The thing that comes with that, though, is a large rule set of legislation that you need to,
as trustees, adhere to within your operation of that fund.
It is still classed as superannuation.
So all of the standard rules that apply to your standard superannuation apply to it.
But also because it's self-managed, you have what they call,
You've got to maintain separation of your superannuation funds from your own personal
funds.
So you can't utilize those superannuation monies for assisting family members or yourself.
You can't invest in assets that are related to you, such as purchasing a residential property
from a member or a related party.
You can purchase property, but not from a related party, things like that.
So a firm such as what we do and other accounting firms generally are out there to help trustees manage that sort of the operations of the self-wintering superfarm within those rules.
Because you break those rules and step outside the lines of what you're allowed to do.
There are some pretty hefty penalties that can be applied by the ATO towards the trustees as well as fines and whatnot as well.
So it opens some good options, but also you've got to stick to the rules as well.
Interesting.
As a good rule of thumb, Simon, I'd like you to let me know if this is fair.
Like when you set up a self-managed super fund, you basically, or it's similar to becoming like a director of a company or a trust, you're managing that structure there.
Its sole purpose is really for your retirement.
Like you're saying, you can't use it to be able to buy things off family members or people related to the family and stuff.
But I guess more importantly, you can't use the self-managed super fund in any way while you're still working to benefit your life.
It's simply you're just taking control of it.
You're managing it.
You're setting it up so that when you get to the retirement, you've obviously chosen what you've invested in with the hopes that it's going to outperform a traditional superannuation fund.
but even if say in the next five years and you're not going to retire for another 20 years you get
you know a thousand percent gain and bitcoin for example you can't take any of that and use it in
your day-to-day life it has to stay separated for retirement specifically yeah so so all the
monies within the superannuation whether it's super in the standard sense or a self-managed super
Yeah, it must be kept there for your retirement needs.
You can't access it outside of the standard, what they call conditions of release.
So a condition of release is the standard set of rules that allow you to access your superannuation,
whether it's inside of a self-wanted super fund or a regular super fund.
Most of those conditions relate to retirement.
There are circumstances where you can access it earlier, but they come with very strict rule sets around that.
But in general, yes, you can't access it for any personal circumstances before those time or conditions have been met.
You generally just have to look at it as, you know, you look at your, say you've got your fund in an Australian super or one of the other standard industry funds.
you know everyone sort of has that it's building up your contributions are going to it you know
it's there it's it's doing its thing you can't really touch it and till you can it's with self
renter super it's the exact same conditions that apply to it it's just that you can um
in you know manage it more directly so you can within a self-renter super fund your you are the
as the trustee of the fund the controlling mechanism so to say in terms of whether you're
buying listed shares or property or crypto or Bitcoin or any other asset class that's allowed
within the investment strategy of the fund. So by doing that, the buck stops with you,
as you say, that you are effectively the director and corporate and trustee of the fund. So while
you're the one responsible for making the investments and operating the fund, you're also
the one that's ultimately responsible if you go outside those rule sets and do break the rules and
do be penalized by the ATO. So yeah, the SMSF comes with a trust deed and that trust deed sets
out the rules of what the trustees can and can't do within that SMSF. Generally, they are in line
with what the legislation says you're allowed to do within CIS. In fact, they have to because you
can't contradict each other but you know that's effectively your guiding document for how you're
going to run that fund and you know if you go outside of it you know you can be i guess you
know penalized you know for for breaking those rules but ultimately it's it's if you're doing
the right thing with it you don't necessarily have to worry about breaking those rules because
you're doing it for your retirement savings um and death benefits and things like that so you can just
you know follow the rules invested how you want to invest it and like i say you know hopefully
you're getting the investment returns you want.
And then once you meet that retirement conditions,
you can then use it for your retirement savings,
whether or not you're keeping it within the super environment,
whether pensions or income streams out of it,
or you're taking out your benefits as lump sum payments.
You've got those options once you meet those conditions.
I don't mean to scare anyone off.
Like you guys make it super simple to be able to stay compliant
and to be able to set it up and go through that process.
And people like I've got you up on the website
and we'll introduce Udo in a moment
and your company and a little bit of your backstory.
But it's not hard.
But I guess the reason I was asking that line of questioning
is with like great power comes great responsibility.
You can take the power, you can take control.
And for me, I'll tell you about my story
about why I went into a self-managed super fund.
But just know that there are things out there
Like the ATO is watching everything.
And just to get it right from the start is probably an easier way.
And to be able to talk to a professional, somebody like yourself, Simon,
that can guide people that understands Bitcoin, the assets class, the compliance.
You've got everyone there a whole lot easier than just going out, trying to do it yourself.
And then maybe getting to the end of the financial year and you're like, oh, I stuffed up.
But that stuff up and hindsight could have been mitigated and it wouldn't have been an issue.
But if you do have these things, the ATO is coming for everyone.
But first, before we get too far, would you be able to take a moment just to be able to tell the audience about UDU Superfund or UDU Superfund and yourself, Simon, your history with self-managed super funds and within the space and helping people take control of their retirement, which ultimately I think is another step towards freedom and self-sovereignty?
Yeah. Yeah. So my personal experience within self-rentice super is I've been working in some form within the self-rentice super fund for, you know, 25 years now.
Sounds weird to say that, but I have been.
So working with accounting firms and financial planning firms, software companies.
Over that time, I've generally done just about everything you can do in the SMSF space from the day-to-day accounting and administration,
involved in audit processing, auditing of the self-managed super funds.
As I said, working at software companies, worked at Class Super for a while,
which is a specific accounting firm, accounting software that accountants use to manage their self-managed super funds.
And then, you know, 2016, 17, we decided to, you know, set our own SMSF accounting firm up called Udo SMSF.
And, yeah, pretty much been running it since then.
Yeah, myself, I have a sort of personal exposure to the Bitcoin and crypto markets, you know, investing.
and sort of took the whole round trip in terms of, you know, jumping in,
getting on the Bitcoin wave as it went up and back down and then back up again.
And then started getting more and more questions and queries from clients
and potential clients that wanted to get exposure to the crypto market.
In general, it's mostly Bitcoin that we're seeing clients wanting to get exposure to.
so we we decided to you know apply our expertise in terms of self-rentice super fund self-rentice
super funds and how you can add that sort of asset class to your funds and and sort of yeah
assisting clients that wanted to you know go ahead with getting that exposure because as i said
earlier the the compliance regime is is quite strict with all asset classes when it comes to
self-branded super fund but with crypto and especially bitcoin it's not just the standard
i'm just going to go out and buy something it's like you know how do i do it under the right
structure how do i own it and store it in the right way that a safe and secure but also compliant with the smsf rule sets how do i go about setting up an SMSF in the first place that you know is personally going to be compliant
Because as you say, it seems easy to go about the process,
but then to actually do it and get it from, you know,
oh, I want to set up a self-managed super fund to actually getting it done
and rolling your funds over from your existing fund is a bit of a trick.
And so we've developed our service around making that process for clients, whether they want to go into Bitcoin or crypto or any other asset class, you know, a smooth process for them so that they can achieve their goals and take the ownership and control of their financial future that they want to do.
So, Jen, that's sort of where we've ended up sort of partnering with firms such as, and people such as yourself that are out there educating Australians in both the, I guess, the Bitcoin narrative in general, but also the safe and secure ownership aspect of it.
because I think in general, that's obviously quite key.
But when you're adding an extra layer of your superannuation savings to it,
you need to make sure that you know what you're doing,
you're knowing how you're going to store it,
and you're knowing how you're going to secure it and keep it safe and secure.
Some people, they're 30 years off retirement.
So having that asset class, assets stored safe and securely
is quite an important step,
which is quite different from your standard investments
that you would have in a self-rentice super fund.
Generally, you would have them in, say, listed shares
or managed funds or held by direct property,
which all have their own sort of fairly standard,
safe ways of owning those
that Bitcoin doesn't necessarily come with.
But then, as you would know,
well, there are risks associated with Bitcoin.
There are ways to mitigate them
and keep that risk level as low as it can be.
So that's why we like to partner with people
that are in that space of educating
on the security and risk level
and then also providing a secure solution
in terms of how they can implement that process.
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Bitcoin way today? 100%. And just to speak on that a little bit more, to riff on that more,
like you're saying, some people could be 30, 35 years away from retirement. And to be able to buy
Bitcoin now, in the last five years, it's been going up 55% per year. If that drops down to,
say, 20%, 15%, whatever, and it's just a couple of percentage points more of inflation or whatever,
I think we've still got a while. But anyway, over 30 years, Bitcoin is going to be worth a whole lot
more in my opinion but that's a long time where you're opening yourself up to the possibility of
just losing your keys that's super easy to be able to place it stuffing up the multi-sig if
people go down that path maybe not having the correct inheritance plan wrench attacks and then
there's just so there's those things and like training and mentorship um can help with that
people like the bitcoin way can mitigate that but then you can also some people like oh like that's
too hard to be able to take it into self-custody no it's just a couple of steps and again like the
Bitcoin way and people can teach people. So they'll learn that side of things. But as some people
like, I want to buy Bitcoin and I'm just going to leave it on the exchange. CoinSpot, for example,
is only insured up to $250,000 Australian. So say you have a million dollars in Bitcoin there
and the exchange goes bust, you'll get $250,000 in cash back, but that's probably not going to
be enough to be able to replace your stack and things like that. So I guess the joy and what I
find so amazing within the self-managed super fund and this is my story is you can actually take
bitcoin into self-custody and then you can learn the tools and the skills to be able to protect it
so it will be there in like 30 years time because my story simon is i was employed and i called up
um like the industry super fund that i was with and i'm like can you guys allocate just a little
bit of my money towards bitcoin they're like no we can't do that i'm like got on google i'm like
how do I buy Bitcoin with my superannuation? And it's like, you can't buy Bitcoin with your
superannuation. I'm like, is there any way to be able to buy Bitcoin with my money for retirement?
It's like, well, you can roll over into a self-managed super fund and do that. So that's
what I ended up doing. I didn't have much money in my superannuation account at that stage. And
then obviously just with time and Bitcoin's performance, it's done that, which has been
amazing and the way that I went about it originally was with a another company and that's why I reached
out to you guys I had to do pretty much everything myself I had to fill in all the information they
did a little bit but then come the end of the year when it's the compliance time I had to do like
pretty much absolutely everything and it's so hard not coming from like a financial background
or the understanding to make sure that I'm staying compliance and I'm giving the ATO the information
that they actually need and want.
And then they'd like keep coming back and stuff.
And you're like, you're missing this or doing that.
So I'm like, fuck, there's got to be able to be a better way.
And they're so slow.
Like my mom went through that same company
and it took them 14 months from start to finish
to actually roll over the superannuation account.
Like it was just crazy.
There's holdups with the self-managed super fund company itself.
The superannuation company that she's rolling out of
with the ATO was the biggest roadblock as well.
So that's when I reached out to you guys.
and what there's got to be a better way found out that you understand bitcoin predominantly crypto
as well but you help people but then come the end of the year instead of me having to do all the work
you'll actually take like a lot of that pressure off and help people around the compliance can you
talk to that a little bit because i find that is the thing that's like the hardest barrier people
like if i leave it in my superannuation i don't need to do anything like it's probably not going
outpaced inflation maybe maybe just but it's easy i don't need to think about it it's just there
whereas when they take control they need allocates to the investments throughout the year they need
to be having the meetings and stuff but then come the end of the year when you need to send
everything to the ato be like this seems like a big job and if you do it yourself it actually is
a big job and it's pretty hard but then you take a bit of that pressure off and you help people
Yeah, so that's the experience of a lot of clients that get into self-managed super funds.
And I mean, it applies to all types of self-managed super funds, not just people that want to invest in crypto as well.
As I've said, my history in the self-managed super industry has been working for firms that effectively doing exactly what you said is making that process and that job as simple as it is streamlined as possible for the trustees so that the whole process doesn't become a headache.
And why did I do this?
I just want to get it up.
I don't want to have to think about it.
And, you know, our service is designed around that aspect of, you know, we call it a concierge,
especially with the setting up of your self-management, you find the concierge service in terms of, you know,
where they're, we've got the whole process mapped out.
We guide the client and the trustee every step of the way to move it to the next stage in the process
and making sure they've ticked all the right boxes,
sent all the right forms off,
sent the right things to the right places.
And then once you've got the funds set up
throughout the year,
firstly, you know, okay, I've set it up.
I've got the money now.
How do I do the investment that I want to do?
Whether you're working with a financial advisor
or you're doing it yourself,
we integrate with whichever way you want to do it.
We work with a lot of financial advisors as well.
And then, you know, the record keeping process is the same as running a company.
You know, you're a director of a company.
You've got your operations going.
You're just doing yourself throughout the year.
But then you've got the whole bookkeeping aspect of it, of keeping track of your bank accounts, keeping track of your invoicing and things like that.
Self-prime is super compliance.
It's effectively the same.
But it's actually, you know, it has a whole extra layer to it as well.
We're there to collate all of that throughout the year for the trustees and then, again, make that end of year process, generally compiling all the data into the financial statements and tax return, managing, making sure we have all the right documents in place.
you know and generally we'll get where we can do it we'll you know manage it for the client on behalf
of them but also you know if they if it's something the client you know does have to do you know where
they'd be like yeah okay this is the next step this is what you need to do we also are there to
guide the clients when they want to do something different throughout the year so you know you
you might decide okay well i want to flip half of my investment into into a property so how do i do
that you know which properties can i buy what structures do i need if i want to do if i want
to borrow or am i going to buy it outright you know how do we do that uh yeah so we can either
guide them in you know the right steps or you know we work with a lot of partners as well in terms of
referring out to um the different partners that you would need to to get those you know plans
implemented we're also there to make sure that the clients don't uh accidentally step out of line
because that happens a lot you know a client something that seems obvious oh i can do this
uh you know it's you know you don't know that what you don't know but you know we're there to sort of
guide that process of okay we want to do this this is how we do it we do it xyz and it's generally
We generally encourage our clients to speak to us first before they go and do anything new or drastic because, as you were saying as well, a lot of times it's harder to fix it after you've made that mistake.
So it's best to sort of just take five minutes to give us a call or shoot us an email and we can guide you with that.
But yeah, that's our ultimate goal as a firm is to make the process as streamlined as possible and also affordable.
like you know our fee structures are you know very competitive with with um most of the farms
here in australia that are in this space but yeah and but yeah making sure we sort of scaling that with keeping the the processes smooth and streamlined for for both them and both them and us because we don want to make our job any harder than it needs to be either
And with our experience that we've had over the 20 years of operating in the SMSF space,
we've got processes and procedures that we implement up front with the clients,
but also behind the scenes that the client doesn't even see in terms of,
you know,
managing that,
that whole process that we can get everything done that needs to be done.
Basically.
Earlier you were saying like,
you've got all those process and procedures mapped out.
I think maybe a better phrase would be like dialed in or locked in.
Like you're just so focused and you just travel down that path.
But one thing,
if you wouldn't mind speaking about Simon as you know,
with my mom,
it's going to take about 14 months with the ATO and with the,
another self-managed super fund, which was crazy. There's just some small little things and no help
or assistance to be able to push through those things. But you, on average, move people through
like down those rails in such a quicker pace. Can you talk to that a little bit? Like what the
usual timeframes are from somebody initially by going to the website, g'daybitcoin.com forward
slash SMSF, booking a call, having a free chat. Then from there, from that initial phone call,
What are the steps?
What are the processes?
What are people looking at?
Time frame, et cetera.
Yeah.
So in general, after you have a call with our team and then you've made the decision to
push forward, there'll be a process to fill in that sort of our application form, which
our team will help you through.
But from that point, our general, our time frame at the moment is running sort of between
four to six weeks.
Let's go.
Again, as you say, we've got the process mapped out and, like I say, dialed in as much as we can.
Unfortunately, there's aspects to the process that are outside our control.
We know most of the ins and outs of that process.
So we've got most of our applications go through quite smoothly because we know what the ATO is going to want.
We know what the bank accounts are going to ask for.
We know the processes that the other super funds where we're going to be rolling the funds over for are going to ask for.
So we have, you know, we map out and guide the clients in terms of, okay, we're at this stage now.
You're going to need to provide this, this, and this.
We need this, this, and this.
And as I said, at the moment, you know, we've had funds that are being set up within less than four weeks.
But, you know, the rough average is, you know, four to six weeks.
You know, like I said, there are things that unfortunately are outside our control, ATO being one.
They're joyful to deal with, aren't they?
Aren't they just an amazing organization?
Yeah.
I mean, you know, they are painful.
You know, they do serve a purpose, obviously.
They're there to, you know, keep us all in line.
And, you know, in some of their processes, while they seem painful, you know, they are ultimately, you know, they're trying to protect clients and trustees.
And that's we don't work with them from an adversarial aspect.
We're there to, you know, answer their questions and help grease the wheels with whatever information they want and basically get the outcome from the client.
Because in the end, they want that outcome as well.
You know, while it can be painful, we, you know, we're there.
That's part of what our service is, is to be there, to be that sort of contact to the, you know, conduit to the ATO to get the process moving and keep it going.
Then you've got things like, you know, setting up the banks.
One of the things we're finding, especially in recent years, you know, it's a bit of an ordeal to open a bank account just in general these days, but especially when you're adding the self-runner super component to it.
So again, making sure that, you know, all the right documents are in place, you know, providing the ID that the client, that the banks want through to the next stage of the rollover.
So again, the rollover, the other super funds, they've got a process that they have to adhere to.
And again, you know, while sometimes it can seem painful to deal with them, you know, they're ultimately just protecting the client's needs as well.
So we're there to answer and provide the information that they need so that they can process the transactions that the clients are requesting.
That, you know, whatever they're in within the inside the rule sets, there's no reason to deny that.
Yeah.
I'm glad it's you dealing with them, not me.
You definitely have a lot more patience dealing with super funds and the ATO.
Yeah.
You're saying like you don't approach it from an adversarial point of view.
And when I get on the phone with the ATO, once you get through to them, they're actually pretty helpful and pretty nice.
But it's the wait times and just needing to call up five times to be able to get something done.
So I'm so grateful it's you, not me, helping people get through.
A lot of the times it's just knowing the terminology and the things that they're asking for.
It's not a language, mate.
Yeah, it is.
It is.
And then, you know, a client will speak to the ATO and the ATO is asking them about one thing and the client may have no clue what it is, but they say to us, it's like, yep, yep, bang, bang, yeah, we know what that is.
We'll sort that out.
And that's, you know, it's the same across the board in the financial services and accounting industry.
That's, you know, that's what we're there for, for the clients.
So, yeah.
Well, it's not fun sitting on hold for 45 minutes.
Yeah, that's part of what we're here for.
It's not fun and their music's the worst.
A couple of things that you're saying is like, you'll help people push through those hangups and you know what the hangups are and you can just continue to make it happen to sort of hit that four to six weeks.
What are the most common hangups when someone's like, I'm going to set up a self-managed super fund and for example, I'm going to buy Bitcoin and then they're like, need to go through that process.
And then sometimes there are roadblocks or hangups.
I guess, what are the most common ones? And also, what are maybe not as common, but they are major roadblocks, hangups, that can really slow down that process?
Yeah. So one of the key ones that we find where clients have gone out and done it themselves is just the wrong documentation or incorrectly executed documentation.
So one of the key things for a software industry firm, which I did discuss that I would say earlier, is the trust deed.
Firstly, having a good and compliant trustee is essential, but then also making sure it's correctly executed.
So many people just assume, oh, it's just a piece of paper.
It'll be right.
I don't have to sign that page.
I don't have to do this.
I don't need to fill that bit out.
It's a hefty document.
It's a good chunk of paper.
But without that, you effectively don't have an SMSF if it's not correctly signed and executed.
So they'll do that and they'll get to, you know, opening the bank account.
We'll want a copy of the trust deed and they send it off.
Well, it's not executed properly.
It's not this.
You've got the wrong information here.
So that causes a big roadblock, you know, and not to mention, you know, even if you get it to the point of opening a bank account and rolling funds over, when you get to the first order and you've got, you know, an incorrectly executed deed or you've got, you don't have an investment strategy.
in place or you don't have.
One of the most common documents,
one of the most essential documents is like there's
an ATO trustee declaration that all trustees have to sign
and be aware of, you know, they'll get to the audit point
and the auditor requests a copy of this and they don't have it.
Yeah, that can be, you know, a pretty big, you know, concern.
One of the other sort of big roadblocks that we come across
in the establishment process is trustees or members that are involved in the fund that have
outstanding tax issues with the ATO, whether that's personal or through a company,
things like outstanding BASAs or outstanding tax debts or their personal tax returns overdue.
These can hold it up, especially with the ATO process when we do the ABN applications.
So we always discuss this with the clients before we go ahead with doing an SMSF establishment to make sure that their personal and business tax affairs are in order.
Not because we're snoopy or anything like that.
It's just that we know that, okay, well, if you've got four or five buses that are overdue, as soon as we do the ABN application, your TFN is going to be flagged and it'll go in.
the ATL will put it through for review.
And then, you know, nine times out of 10,
they're going to hold it up to either you get those tax affairs in order
or they'll just reject the ABN.
So that's one of the things we like to, you know,
definitely cover with potential clients and get those in order.
But yeah, there's sort of the two main ones.
Yeah, I'm sure there's more.
I'm sure there is more.
And for the audience, Simon was saying to me just before we were live, I'm like, good morning.
How are you doing?
He's like, good.
It's 2 a.m.
Here I'm like, mate, where are you?
He's like, I'm in Dubai at the moment.
I'm like, oh, my God.
Do you want to reschedule?
He's like, no, it's all good.
So I guess that just speaks to how deep you are in the space.
It's, well, it's 2.40 now and you're just riffing and it's just coming straight to you.
And that's why it pays to talk to someone that understands what the hell they're doing
when it comes to something that can be so complex.
To flip gears totally, it's gone a little bit quiet recently,
but something that I've been following quite closely
is this proposal for an unrealised capital gains tax
on superannuation balances over $3 million.
Do you have any insights into that?
Have you heard anything about it recently?
And do you think it's likely to come in?
Do I think it's likely to come in?
From what I've been seeing and hearing,
You know, I feel like the government is quite, you know, fixated on it happening.
In what format it comes through, I really don't know.
I've been on the, you know, I'm sort of keeping my finger roughly on the pulse around it,
but I've not really been delving too much into what it's actually doing
because until they actually release the legislation of what it is and how it's going to work,
you know, it's anyone's guess really.
You know, I've seen lots of, you know, content about it
and different people within the industry sort of giving their opinions
and thoughts on how it's going to work.
And if it's this, it'll be this.
If it's this, it'll be that.
So, you know, I'm sort of just in the wait and see sort of field at the moment.
Generally, what I've seen in the superannuation legislation field over the last, you know,
since I've been involved in it is that, you know, when they want something to happen,
it'll come through in some form.
Usually when they push something through that's so drastic like this,
They usually have some sort of transitional period where members of self-rated super funds or super in general can implement different strategies to not be completely burnt.
So if we go back to the 2017, they had the option to recast your cost basis when they brought in the transfer balance caps and all of that related to pensions.
Whether they'll do something similar here, I haven't really heard anything in that space,
so I don't really know.
From what I've seen with it, I think it will come through, but in what form, I don't know.
How clients can deal with that, I think a lot of the voices I've been listening to
within the super-generation industries is just don't freak out too early and do something drastic
because it may not be necessary.
Wait and see.
And then once you've got clarity around what the rules will be,
then you can sort of figure out how you're going to deal with it.
I've heard lots of concerns around,
especially clients that are in the crypto and Bitcoin space
that are some years away from retirement that are already sitting on very high unrealized capital gains and people know people concerned about how they going to deal with that you know which you know is a concern because you know um if you in a position where you a long way off meeting a condition of release and
you're already sitting on those gains unrealized gains that are going to trigger these these taxes
then you know how are you going to deal with that you can't you don't have the option of
drawing that money down to bring your balance down um and obviously you don't want to just
burn yourself by selling off an asset that's performing really well if you're already sitting
on a high unrealized gain so um so yeah i think we just have to wait to see and then you know deal
with it unfortunately well fortunately more likely is that you know in australia we all have to deal
with superannuation that's you know it's it's a compulsory part of you know our financial life so
So you just have to look at how we can make it work, basically.
I was playing around with ChatGPT last night, and I've got a couple of numbers here.
So some estimates do put to self-fund retirement.
It's about $3 million today if you were to retire today.
But most people, when they get to the age of, say, 60 to 64,
or saying people have $205,000 to $381,000 in super,
$65,000 to $69,000,
about $206,000 to $29,000,
$70,000 to $74,000,
$200,000 to sort of $500,000.
That's incredibly low compared to that $3 million.
Obviously, the self-funded might be okay,
maybe top it up a little bit with the pension and stuff,
but the traditional super funds,
not really giving people those numbers
where it's going to push them towards the $3 million where they can be completely self-funded
or where they're subject to that unrealized capital gains tax.
By going into a self-managed super fund and say somebody goes down the track of Bitcoin,
like you're saying, I know a lot of people that have set up self-managed super funds over the years
and gone like all into Bitcoin, for example, not financial advice,
choose your own investments, ladies and gentlemen.
But with the performance, those balances get very big very quickly.
And if they were to bring it in, yeah, it's probably more likely are going to be subject to the unrealized capital gains over $3 million.
My thoughts, and I'd like to get your thoughts, Simon.
It's better to have big money problems where you need to deal with that.
It's like that pressure is a privilege instead of not having enough money problems.
You know, I think that's the worst problem.
They're both a problem, but I think the big money problem is still a better problem to aim towards, to be able to choose, to be able to be like, no, they're bringing in a $3 million unrealized capital gain.
I want to get there.
I want to have that problem instead of I get to retirement.
I don't have enough money.
But what are your thoughts around it?
Absolutely.
I mean, having big money problems is better than no money problems.
You know what I mean?
I've always said, you know, when clients, you know, or people I know complain about big tax bills, you're paying big tax because you've got big money, right? So, you know, if you've got, if you're worrying, having to worry about the $3 million threshold and the unrealized gains tax, yeah, I mean, no one likes to give up money that they've worked hard for and, you know, invested well to achieve.
But at the same time, you're looking at yourself as being in that portion of the population that has reached that target that has been deemed a minimum or close to a minimum to be able to have a comfortable retirement.
But that being said, you've got the people who have got the option to contribute more for the people on those lower balances to help get them more.
And then, say, investing into asset classes that can help achieve that.
But yeah, I'd say if you're at that level, it's not the end of the world to have to pay a bit more tax.
I mean, and when you really delve in, a lot of people have been asking me about this $3 million cap and the additional taxes and things.
And when you really delve into and understand the superannuation regime in Australia since it was introduced back in the 90s,
It does gel up in that the superannuation regime was put in place to help encourage individuals, the average Australian, to prepare and be prepared to self-fund their retirement.
And how do they do that? By encouraging you to save a portion of your salary every year in addition to whatever else you can contribute and get a tax concession on that income. So if you're on the standard 47% or the highest tax rate, you've been given that ability to contribute funds into the superannuation pool and have a lower tax rate applied to that money.
But as we've seen, sort of what the government has seen over the last sort of 20 years is that, you know, people that are on the higher end of the scale in terms of wealth, you know, are also able to utilize that, I guess, take advantage of it in terms of, you know, storing, you know, additional wealth within the superannuation environment at that lower tax rate, which is where they sort of come up with this $3 million level of, okay, well, if you've got more than $3 million in super, you don't generally need these additional tax concessions.
to help save to fund your retirement.
So, you know, I see it from both sides in that, you know,
no one likes to pay taxes on money that they've worked hard to get.
But at the same time, you know, if you were saving those,
if you were making those gains outside of super,
you would be paying that same tax anyway, if you don't know.
So it's a good and a bad win for people that are in that position.
But how they deal with it, you know, for people that are, you know,
sort of in our sort of age bracket where we've still got, you know,
a good chunk of years before we get to that point where we can utilize the super money and you're
already at that level how are you going to you know deal with those unrealized gains and especially
an asset class that like you know crypto or bitcoin that can you know fluctuate in price and value in
the short term quite a bit you know how you know how's that going to work in terms of triggering
these taxes you know at one point and then you know being at a low point you know soon afterwards
and things like that.
Obviously, no one's got a crystal ball
to see the future about how it's all going to happen.
But if history is anything to teach us,
Bitcoin and any other asset class can be quite volatile.
So yeah, how it's going to work in reality, we'll have to see.
I think that's going to be very interesting.
We could speculate on it all we like,
but when they do whatever they do, we'll know more.
Yeah.
Dive into it.
we're coming to the top of the hour but i think one thing that would be really
important to be able to talk about is in a traditional superannuation account most of them
if not all of them come with life insurance or like a lot of insurance is sort of built into them
when you set up a self-managed super fund they don't like it's not baked into it it just it's
something that you need to go out and choose for yourself and do that what are your thoughts and
maybe like when you're talking to clients in regards to the insurance, what comes up in those
conversations? Yeah, well, generally, the first step is, like you say, to just have that realization
that it generally, it doesn't come with it, with that built in, you know, some clients may have
already had, you know, additional or specific policies put in place, you know, through working
with a financial advisor, or they've done it off their own back, you know, in their existing super,
Some clients have just had the default cover that whatever their fund had and had never really thought of it.
Life insurance or insurances in general within SMSF is actually one of the aspects of the investment strategy that the ATO has said that you do need to consider.
So you do have to think about it and decide whether you need it or don't.
Generally with us, we encourage our clients to speak with a financial advisor specifically for the insurance needs to sort of do a full dive into their personal situation, figure out what insurance cover they do need, and then helping them find the cover and a policy that suits them and help them implement it.
Because if you're going to be paying the money for it, you may as well get the most suitable one you need.
But yeah, it's one of the things that we do discuss with the clients that, you know, it's a necessity and you don't have to have the insurance, but you do have to have the consideration to it in terms of do I need it?
Do I know?
And yeah, so we always, if you haven't already, speak to an advisor about that because, you know, they're generally the best place in terms of helping you look at your situation and decide what level of cover you want.
And then, you know, they've usually got the partnerships in place with the different providers to get you the best policies and then go through the actual process.
Because, again, that's a whole new another process within the process to get those done.
So, yeah.
But, yeah.
And then obviously with our service, we're able to work with the advisor in terms of providing the information and, yeah, integrating that within the rest of the setup within the fund.
Awesome. I guess for everyone, if you're interested to be able to learn more, go to the link below and connect with Simon or somebody on Simon's team and just have a chat and ask the questions because for anything to be able to change, we need to change something. And to be able to make a rational decision, we need new information.
but Simon I just want to hand the microphone over to you and give you a couple of minutes or a moment
if you've got anything that I didn't ask or that you'd like to bring up or just a thought in general
I mainly just that I'm a big believer in the self-managed super tool in the financial planning
in the in the financial aspect of Australians lives superannuation you know we're quite lucky
in Australia that we do have the superannuation regime so it's there and you know a lot of
A lot of people tend to think of their super, a lot of people actually don't think about their super until it's almost too late to start thinking about it.
So what I like with the self-managed super is that it does engage you in your financial future.
It gives you the choice and control to take control of your own financial future.
You know, in my own personal opinion around, you know, the landscape in Australia and the world over the last few years is that, you know, with the introduction and growing popularity of things like Bitcoin and the crypto world, you know, people are wanting to take control of their own financial world and not be gatekept by the banks and industry funds and things like that, you know.
And while they do serve a purpose, I'm not poo-pooing them.
They've got their rules and they're there to protect the clients.
But at the same time, I like to see people take control of their own financial wealth.
I've dealt with thousands of clients in the time that I've been working in self-managed super.
And a lot of them hadn't really thought about their financial future and their superannuation until it was almost too late.
They're getting into their 50s and 60s and then they start to think about it.
So what I'm seeing now with our services around the crypto space and Bitcoin is that we're getting a lot younger crowd than usual that are taking an interest in it and wanting to be engaged in that aspect of their financial savings and how they're going to plan out the rest of their lives.
So, yeah, so I'm a great fan of self-managed super funds.
You know, they're not for everyone.
Definitely, I won't say that everyone should have one,
but, you know, they're a great tool that if you want to take that control
and ownership to exercise.
So, yeah, we're always happy to talk to people around their thoughts
or direct them to partners that can help them in having a think about it
and even just having a chat and just generating that thought process
to see whether there's something different
or something better that they can be doing.
Yeah.
I really appreciate it.
For everyone, if you want to connect with Simon
or somebody from UD Self-Managed Super Fun,
connect with them, links below.
But please remember, do something nice to yourself today
for somebody else out there.
Be blessed. Peace.