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 (with the assistance of our licensed advice, if you wish).
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 achieved an average positive return of 7.8% per financial year from 2012 to 2017, with a 10.2% estimated return on assets in 2016/17 (please remember that past performance is not indicative of future results).
– the number of SMSFs grew by 19% and SMSF assets grew by 57% in the five years leading up to June 2018.
– the top four assets held by SMSFs (by value) as of June 2017 include: listed shares 29%, cash and term deposits 24%, unlisted trusts 11%, and non-residential real property 9%.
– there are 596,000 SMSFs holding $750 billion in assets, with more than 1.1 million SMSF members, as of June 2018.
– in 2016–17, the average assets of an SMSF were just over $1.2 million. This is an increase of 10% from 2016, and 27% over the last five years.
– the median age of SMSF members of newly established funds in 2017 was 48, compared with 59 for all SMSF members.
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.
If this article interested you and you would like to speak to Pat Casey on the phone, select a time to speak Pat – Financial Planner Sydney.
At Assure Wealth we specialise in helping busy, successful families structure their finances to achieve greater wealth and financial peace of mind.
Disclaimer: The information provided on this website has been provided as general advice only. We have not considered your financial circumstances, needs or objectives and you should seek the assistance of your Walker Lane Pty Ltd Adviser before you make any decision regarding any products mentioned in this communication. Whilst all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly neither Walker Lane nor its related entities, employees or agents shall be liable on any ground whatsoever with respect to decisions or actions taken as a result of you acting upon such information.
Assure Wealth Pty Ltd ABN 31 965 466 780 Corporate Authorised Representative no. 1244817, Patrick Casey Sub-Authorised Representative no. 1244748 of Walker Lane Pty Ltd ABN 70 626 199 826, an AFSL holder No 509305.