How much do I need in super to start an SMSF?
The rough guideline for how much you need in superannuation to justify a SMSF or Self Managed Super Fund is about a quarter of a million dollars or $250,000 – or more.
Remember a SMSF can have up to 4 members and so you might find the $250,000 is easier to find than you think!
In my experience, people tend to have a number of retail superannuation funds.
If you’ve had 2 or 3 jobs over the last couple of years, you may have a super fund for each of those jobs.
So it’s a great tip to first find your 4 potential SMSF members, and then find all the super accounts.
Retail Story: When Harvee’s family set up their SMSF their 4 members (Harvee, Raymond, Raewyn & Phoebe) discovered they had 10 retails super funds amongst them. It’s now consolidated into one Self Managed Super Fund – “The Pene Family SMSF”.
Once you tally up the total balances you might be really surprised with how much you actually do have in Super.
Now, $250,000 is a rough guide, but there are people who do set up self-managed Superfunds with less than that.
3 reasons why families set up a SMSF with less than $250,000
- They plan to use their SMSF to borrow to buy a property, which you can’t do in a retail super fund.
- They plan to Invest in alternative investments like gold, which you can’t do in a retail super fund.
- They plan to make significant contributions to their super fund in a short amount of time.
For example, a SMSF with 4 members might only have $150,000 to start with. But if the 4 family members each contribute $25,000 in the next financial year, that will equal an additional $100,000 in contributions – or $250,000.
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Any information is general in nature only. It does not take into account the objectives, financial situation or needs of any particular person. So before acting on anything to do with your finances, you need to consider your financial situation and needs before making any decisions based on this information.
Benjamin Walker of Inspire SMSFS Pty Ltd (ASIC Authority 1243433) ABN 38 879 130 483 is an Authorised Representative of Finance Wise Global Securities Pty Ltd ABN 60 146 708 045. Finance Wise Global Securities Pty Ltd holds Australian Financial Services License No. 397877.