Want more control over your future? The lowdown on SMSFs

Self-managed super funds (SMSFs) have become an increasingly popular choice in recent years due to the control and flexibility they can offer. Today we’ll take a look at why that is, as well as some interesting stats the ATO has gathered on them.

While SMSFs are commonly called DIY super funds, that’s, well, a little misleading.

That’s because they can be tricky for people to wrap their head around, let alone stay up-to-date with all the rules and regulations that are attached to them.

Fortunately, that’s where we can help out.

SMSFs in a nutshell

They say that with great power comes great responsibility. And that saying rings true when it comes to SMSFs.

An SMSF is a private superannuation fund, regulated by the Australian Taxation Office (ATO), that you manage yourself (always a good idea to speak to a financial planner or accountant, too).

One of the key differences between an SMSF and other types of super funds is that the fund members (up to four) are also the fund’s trustees, and each trustee is directly responsible for all of the fund’s compliance and investment decisions.

SMSFs are usually best for people who have established super balances who want more control over their investments. They typically have a broad range of investment opportunities that each of the fund’s trustees have responsibility for.

Some of the major benefits of an SMSF include that it can:

– give you more control over how your superannuation funds are invested.

– give you a wider range of investment choices.

– reduce your superannuation annual fees.

– allow you to borrow money to invest in property.

– provide a range of effective tax benefits.

Latest ATO stats on SMSFs

Ok, let’s get to the good bit.

Below we’ve listed some interesting statistics the ATO has recently released on SMSF performance over the last five years:

– SMSFs had assets of almost $1.5 million on average in 2020–21, up 15% from the previous year and 25% over five years.

– 64% of SMSFs have existed for more than 10 years.

– 45% of SMSFs had assets between $200,001 and $1 million.

– The median age of SMSF members of newly established funds in 2020–21 was 46. The median age of all SMSF members was 62 as at 30 June 2022.

– The average member balance for females increased by 30% over the five years to 2020–21, while the average balance for males increased by 26% over the same period.

Final word

If you’d like to find out more about SMSFs, then get in touch.

Reading about them online can be a little difficult when it comes to fully understanding all of the risks, obligations and opportunities. What we can do, however, is help you make a well-educated decision to determine if it’s the best flight path for your financial future.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.