A lot of people ask, “How much do I need in super to consider setting up an SMSF?”
If you Google that question, the suggestions for the normal range is about $200,000 to $250,000 in super. But the idea is breaking even, comparing the costs of your current super to the cost of running an SMSF.
A lot of industry or corporate super funds charge a percentage of your balance. So the bigger your balance is, the bigger your dollar figure in fees will be in the financial year.
If you put $500,000 into your super fund as a contribution, rarely would your accounting fee go up in that proportion. It’s more of a fixed fee for the SMSF.
Regardless: Do you have a good chance of outperforming your current super?
If you are not just looking at the fees and trying to save on the fees, if you go and invest in shares or property that you can’t get in your current super fund, then you will outperform if you do it yourself. Then the fees become still relevant but that’s not the only thing to compare when considering setting one up.
The “SM” in SMSF stands for Self Managed and it requires diligence to set up and run. So, it doesn’t happen by itself. As advisers for clients with SMSF, we are there for a sounding board and they assist with certain functions but we can’t transfer money, and we can’t make investment decisions, you need to self-manage it.
For compliance requirements, there are rules of the game with super and there are big penalties if you stuff it up or you do illegal things. You have to work with someone who can guide you through what’s allowable, and what’s not. And they do require an annual audit by a third-party auditor. So, when we prepare the financials and tax returns for our client, we send that off to a third-party auditor, and they give that a second check that everything is compliant.
Watch the full webinar, ‘Become an SMSF millionaire’ at
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