What sort of people do SMSFs attract?
20 January 2016: Younger people are becoming more attracted to self-managed superannuation funds (SMSFs) as the average age of a member fell under 50 in 2015. More and more Australians are choosing an SMSF over an industry super fund.
The latest research from the Australian Taxation Office (ATO) found SMSF owners now control 30% of the $2 trillion superannuation industry. Over the five years that led to June 2014, SMSFs' assets grew 23% and is now valued at over $1 million.
SMSF Association chief executive Andrea Slattery welcomed the trend, suggesting more women are starting their own do-it-yourself fund while in their younger years.
“People are becoming more enthusiastic about opening an SMSF in their younger years while they still earn money, Slattery said.
SMSF trustees are seeing a trend of more working-age women. Of the SMSF owners aged from 35 to 64, 66% of them are women. This trend is expected to continue in the future.
Despite the rise of women in the SMSF sector, caution is advised by many financial professionals. Managing a SMSF is not a game. It will determine how you spend your retirement. Eleanor Dartnall, the principal of Dartnall Advisers said people shouldn’t start a SMSF if they don’t understand how the fund works.
Education and knowledge about SMSFs are both important factors that one should have if they're thinking about starting an SMSF via the funds from their regular super.
There's a lot of money involved in running a SMSF, so advisers recommend having a balance over $200,000 as a more effective starting point.