The Rise of Self-Managed Super Funds in Australia: Exploring Trends and Insights

Retirement planning in Australia is undergoing a transformation as individuals strive for increased autonomy and flexibility in managing their hard-earned superannuation. One approach that has gained considerable popularity in recent years is the Self-Managed Super Fund (SMSF). With a growing number of Australians embracing this avenue, it becomes crucial to examine the relevant trends and data surrounding SMSFs. In this article, we delve into the statistics and insights that shed light on the rise of SMSFs in Australia.

The Growing Popularity of SMSFs

As of 31 March 2023, Australia boasted an impressive 606,217 SMSFs, catering to 1,136,234 members. This staggering figure reflects the rising interest in independently managing one's superannuation. The numbers signify an increasing number of individuals seeking greater control over their retirement planning.

Establishments and Wind-Ups

During the 2022 financial year, 28,187 SMSFs were established, indicating steady growth in the adoption of this retirement strategy. However, it is worth noting that 12,791 SMSFs were wound up during the same period. The wind-ups highlight the importance of adequate planning and understanding of the responsibilities associated with managing an SMSF.

Composition of SMSF Members

Data from the year ending 30 June 2021, reveals that the majority of SMSFs (68.7%) had two members. This suggests that SMSFs are commonly utilised by couples seeking joint control over their retirement savings. Additionally, a significant proportion (77.7%) of SMSF members as of 30 June 2022, were aged over 50, indicating a growing interest among individuals approaching retirement age.

Emerging Trends in Age Groups

An interesting trend is observed within the 35-44 age bracket, with 10.4% of SMSF members falling into this category. Furthermore, during the quarter leading up to March 2023, 33.8% of the newly established SMSFs were formed by members in the 35-44 age bracket. This data signifies a rising interest among individuals in their mid-career stage to proactively manage their retirement funds.

Taxable Incomes and Asset Values

Approximately 13.0% of SMSF members, as of 30 June 2022, reported a taxable income ranging from $100,000 to $150,000. This indicates that individuals with relatively higher incomes are turning to SMSFs as a means to optimise their retirement savings. Furthermore, in terms of asset values, 33.5% of SMSFs had assets valued between $500,000 and $2 million, while 31.8% had asset values ranging from $2 million to $5 million as of 30 June 2022. These figures reflect the growing presence of substantial asset portfolios within SMSFs.

Median Assets per Member

As of 30 June 2021, the median assets per member of an SMSF stood at an impressive $472,824. This statistic highlights the potential for SMSFs to accumulate substantial wealth and underscores the importance of sound investment strategies within these funds.

The data surrounding SMSFs in Australia offers valuable insights into the changing landscape of retirement planning. With a significant number of individuals opting for self-management of their superannuation funds, it is evident that SMSFs are gaining traction and becoming an appealing option for those seeking greater control over their financial futures. Understanding the trends and statistics discussed in this article can assist individuals in making informed decisions about whether an SMSF is the right option for them.

Want to learn more?

Register for our live web-event: "Self-Managed Super Fund: Is it the right option for you?"

https://us06web.zoom.us/webinar/register/1016860349728/WN_YRbuUHcrRsysjhSq_nRbDg

During this web-event, David Shaw and Matt Pack will guide you through the fundamentals of Self-Managed Super Funds (SMSFs) and help you evaluate if it's the right fit for your retirement strategy.

We'll cover crucial topics such as the differences between SMSFs and other super funds, the benefits and potential drawbacks, how SMSFs operate, expected costs, investment selection, and the rules and responsibilities governing SMSFs.

Presenters: David Shaw, CEO & Founder of WSC Group and Matt Pack, Director of FinancialPlanning

Date: Tuesday, 13 June 2023

Time: 1:00pm AEST

Duration: Approximately 30 mins

Register Now: https://us06web.zoom.us/webinar/register/1016860349728/WN_YRbuUHcrRsysjhSq_nRbDg