An SMSF is a super fund you manage yourself and is regulated by the Australian Tax Office (ATO). The purpose of the SMSF is the same as a typical super fund; to provide members money in retirement. SMSFs can have up to 6 members, who are often family members (although members don't need to be related at all).
SMSFs come with the freedom and flexibility to invest your super however you want, though there are a number of costs involved and legal obligations to meet.
If you've already got an SMSF set up, we suggest you take a look at our guide on setting an investment strategy for your SMSF instead.
| Response | Female | Male |
|---|---|---|
| No | 65.08% | 63.86% |
| Yes | 34.92% | 36.14% |
If you start an SMSF, you will be both a member of that fund as well as a trustee (unless you decide to appoint a company to act as your trustee – more on this in our SMSF trustee guide). As a trustee, you will have control over where your superannuation balance is invested and will be responsible for the day-to-day running of the fund.
As a member, you will benefit from the fund's investment performance and be able to use the money generated from the SMSF to help fund your retirement when you're no longer working.
Your employer will pay your super payments into your SMSF, then it's up to you to decide how you'd like to invest that money. When you're retired you can start to access the money generated by these investments to fund your lifestyle.
An SMSF may be right for you if:
One caveat worth noting: from 1 July 2026, Division 296 adds an extra 15% tax on earnings attributable to a member's total super balance above $3 million, and a further 10% on the portion above $10 million. Both thresholds are indexed to CPI, in $150,000 and $500,000 increments respectively, and the tax applies only to realised earnings – unrealised gains aren't taxed. FY2026-27 is the first income year affected, with the ATO issuing first assessments in the second half of FY2027-28. If a large balance is the main reason you're considering an SMSF, it's worth weighing Division 296 into that decision.
"While SMSFs are often promoted by advisers and accountants as the ultimate choice for those seeking control and flexibility over their superannuation, they are not suited for everyone. The benefits of SMSFs come with significant responsibilities, costs and risks that need careful consideration. Think of it like owning a car. While car ownership offers freedom, the ease and practicality of alternatives like public transport or rideshare may outweigh the complexities and expenses of car ownership."
There are a number of disadvantages that might mean an SMSF is not suitable for you. These include:
There are many rules applied to SMSFs and how you can invest. Here are some basic rules you need to be aware of:
You can quickly check your SMSF's compliance status using Super Fund Lookup, a public register maintained by the ATO.
Here's how to set up an SMSF in 6 steps.
An accountant, tax agent or administrator will help set up the fund, manage its various accounts and finances and ensure you're meeting your reporting and admin obligations with the ATO. A legal practitioner can help set up your trust deed correctly (more on this in Step 3), and ensure your fund meets its ongoing legal requirements. You're not obliged to use a financial adviser but you might find it valuable to get professional advice regarding your SMSF's investment strategy.
Most importantly, you'll need to appoint an approved SMSF auditor to audit your fund each year. This is a requirement of all SMSFs.
In an individual trustee structure, the SMSF assets are registered in the name of the individual trustees (the fund members themselves). However, with a corporate trustee structure, the assets are registered under a company (who acts as the trustee), and the SMSF members act as directors.
An individual trustee structure is lower in management costs but has more admin. A corporate trustee structure is easier if the fund frequently changes members, as assets are held under the company name rather than the individual trustees' names.
You can read more about SMSF trustee structures and trustees' responsibilities in our separate guide.
The trust deed is a legal document that outlines the rules of the fund, how it will be operated and lists all members. An accountant, administrator or tax agent must prepare the trust deed and ensure all SMSF members sign and date it. The trustee declaration is another document that highlights the responsibilities of all trustees as regulated by the ATO. Each SMSF trustee and director will sign their own declaration within 21 days to keep on file for a minimum of 10 years.
You must register your SMSF with the ATO within 60 days. You can register for an Australian Business Number (ABN) and Tax File Number (TFN), and elect the ATO to regulate your SMSF through the Australian Business Register. Once you register the SMSF with the ATO, you can register for an electronic service address. This is an Internet address for your SMSF that your fund administrator will provide you. Your employer will use this address to send contributions to the fund.
You need to open an SMSF bank account in your fund's name that is separate from all your members' personal bank accounts. This account is used for the fund's general cash flow, eg to pay any expenses or penalties, and receive investment returns such as rental income. You may also want to consider setting up an SMSF term deposit; if you liquidate any assets within your SMSF, such as a property or shares, you'll want to make sure your money is working hard while you consider where to invest next.
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You can now roll over any existing super you might have with another super fund into your new SMSF. You aren't required to do this by law, but it's definitely a good idea so you're not paying multiple sets of fees across numerous funds. Simply fill in a 'Rollover Initiation Request form (available on your fund's website) that transfers your balance over into your new SMSF.
You can contribute to your SMSF by rolling over your current super balance into your new fund, having your employer contribute the super guarantee into your SMSF and/or making personal contributions yourself.
It's a good idea to roll over your current super balance into your SMSF, to save from paying multiple fees. You can easily do this online in less than 10 minutes. Plus, learn more about the benefits of making contributions to your SMSF.
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ESUPERFUND can help you set up your own SMSF. This review takes you through what you need to know to decide if it's right for you.
Learn the responsibilities and obligations of SMSF individual and corporate trustees, including the trustee declaration requirements.
Compare SMSF bank accounts in Australia to manage your self-managed super fund’s expenses, place trades, accept member contributions and earn investment income.
An SMSF service can help you establish your self-managed super fund, and assist with ongoing admin and management of the fund. Here are the pros and cons.
Understand the pros and cons of self managed super funds, including tax benefits and investment risks, before you open your own SMSF.
Learn how to roll over your super into your SMSF and make contributions into the fund.
How much does it cost to set up and run an SMSF? How large does your balance need to be for an SMSF to be cost-effective? Find out here.
SMSF term deposits offer a secure and steady way to boost your retirement balance, so here’s what you need to do to open an account.
Learn how to develop a strong SMSF investment strategy and what assets you can and can't invest in. Want an SMSF investment property? There's a few things to consider first.
How much money can I put into the SMSF when it is first opened ?
Hi Bill,
How much you can put in depends on the super contribution rules set by the Australian Taxation Office (ATO). There’s no legal minimum, but the ATO suggests an SMSF is only cost-effective if you start with around $200,000 or more. You can technically start with much less, but fees (audit, accounting, admin) can eat into returns. There are specific rules around concessional and non-concessional (after-tax) contributions you will want to check before you get started. Hope this helps!
I have superannuation and I am the sole beneficiary. If in case I apply for an aged pension, does my fund payment be counted as an income and affect my eligibility?
Hi Johnny,
Thanks for getting in touch with Finder. I hope all is well with you. 😃
It is worth noting that your superannuation is not considered by Centrelink until you become eligible for the age pension. For this reason, once your age pension kicks in, the value of the superannuation can be counted in both the assets and income test.
So, yes, your super will affect your eligibility for the aged pension. To know more information and get a more personalised answer, you may directly get in touch with Centrelink.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua