Considering an SMSF? Questions you should be asking yourself

Many Australians have embraced self-managed super funds (SMSFs) as a way of taking control over their retirement planning and savings. Recent ATO statistics show that as at 30 June 2024, over 625,000 SMSFs (with more than 1.1 million members) held $990 billion in assets, representing a quarter of all Australian superannuation assets.

But is an SMSF right for you? There are things you’ll need to consider.

Potential benefits of an SMSF

An SMSF can be an attractive option as it puts you in control of your retirement planning. It allows you to tailor your investment strategy to your own personal goals and risk tolerance. Also, as part of an SMSF, you could have access to a broader range of investment options than you may have with a retail or industry super fund, including direct property, shares, term deposits or certain collectables. The flexibility of an SMSF can also offer advantages in tax planning, particularly around the timing of investment decisions and your retirement planning. You may also be able to implement more sophisticated estate planning strategies.

Key considerations

Running an SMSF isn’t suitable for everyone – you need to be able to wear many hats, including investor, administrator and trustee. Before making the decision, you should ask yourself:

Costs and expertise: Have you considered the setup and ongoing costs of running an SMSF, including auditing, tax and financial advice? Do you understand your legal obligations as a trustee? Do you have sufficient financial or investment knowledge, or access to professional guidance?
Time and commitment: Can you dedicate sufficient time to managing your fund? Are you prepared to keep informed about super regulations and market conditions?
Practical considerations: Are you prepared to actively participate in investment decisions and fund administration? Have you considered how your insurance needs will be met (eg life, total and permanent disability [TPD], income protection)? Will the change to an SMSF be financially beneficial for you?

ATO support and resources

The ATO offers support for people considering or running an SMSF, covering the lifecycle of an SMSF from start-up to winding down, in the form of publications and online education modules. Resources include:

Starting a self-managed super fund: This education module is designed to help you understand how an SMSF is set up and decide if an SMSF is right for you.
Running a self-managed super fund: This new self-paced module includes coverage of a trustee’s obligations when running an SMSF, how to manage contributions and rollovers, managing investments, paying super benefits and keeping up with reporting and administration.
Winding up a self-managed super fund: This module helps you understand the situations where you may consider winding up your SMSF and prepare for when you decide to do so.

SMSF publications and online education modules can be found on the ATO website under Self-managed super fund education products or by accessing the Small business education portal.

Before making any decisions about starting an SMSF, consider seeking qualified professional advice to determine if it's the right choice for your retirement planning strategy.