One million Aussies choose self-managed super
More Australians are taking retirement into their own hands, with the popularity in self-managed superannuation funds reaching one million members. Here’s why more Aussies are choosing to self-manage their super.
Managing your own superannuation fund may be a big responsibility, but more people are choosing to take the reins on their retirement by setting up a self-managed super fund (SMSF).
This was backed by the Australian Taxation Office’s (ATO) March 2014 SMSF statistical report which reported the number of SMSF members have now topped one million or 1,006,975 to be precise. That’s a jump of 11,384 members compared with the December 31 figure of 995,591.
The appeal of SMSFs
Setting up and managing a SMSF is no easy task but the attraction of choice when it comes to how your funds are invested and when you can access it has meant the continued appeal of SMSFs.
Andrea Slattery, chief executive of industry body SMSF Professionals’ Association of Australia (SPAA), says the number of trustees and members exceeding one million is an important milestone for the SMSF industry, demonstrating the growing number of people wanting to take direct responsibility for their retirement savings.
“It now compels everyone involved in the industry to ensure that these trustees and members have access to the best professional advice, and certainly SPAA is committed to this outcome,” she explains.
Despite the figures showing the continued growth of SMSF establishments, the pace has softened.
“SPAA is encouraged by this trend. It suggests that people are only opting for a SMSF after doing their due diligence and deciding whether a SMSF is the appropriate retirement savings vehicle for them,” she reveals.
Things to consider
Want to be one of the growing number of Australians taking control of their super savings? Before you go ahead and establish a SMSF, there’s a few things to consider.
It’s a big responsibility. There are strict rules set out by the ATO which you need to follow when managing your own super fund. While many people who set up their own SMSF have experience in financial or legal affairs, this isn’t a requirement. If you’re not confident you have the necessary knowledge and investment skills, speak with a SMSF specialist adviser first to discuss your options.
You’ll also need to ensure you have enough assets, super savings and time to invest in a SMSF. It can be time consuming and costly, especially when you add up the fees for the professionals and advisers you may need to consult.
This will include seeing a SMSF auditor, since one of the rules of managing your own super is to have the accounts, statements and compliance audited each year. There’s also the risk involved in making financial decisions, and you will be held legally responsible for your SMSF.
The great thing about the popularity of SMSFs is that a growing number of people are looking to take control of their financial future. However, before you jump into anything, weigh up all of your options and seek professional financial advice if you’re unsure about what is best for you.
Related link: Is a self-managed super fund right for you?