Replenishing SMSF memberships
Younger people are showing an enthusiasm for establishing an SMSF.
One of key characteristics of self-managed super is the way that the sector's membership is being continually replenished with younger members.
Certainly, it is well documented including by Smart Investing that SMSFs hold more than half of the total super money invested in retirement products (which include transition-to-retirement pensions held by members still in the workforce).
And many members understandably wait until large balances are built up in big APRA-regulated super funds before establishing an SMSF for their remaining years in the workforce and for a lengthy, well-planned retirement. This, of course, increases the age demographics of SMSF members as a significant proportion would have reached middle-age by that point.
Yet the tax office's self-managed super statistical report for the December quarter highlights the enthusiasm that younger members are showing in establishing SMSFs.
More than 43 per cent of the members who established SMSFs in the December quarter 2016 were under 44 with 76 per cent being under 55.
Interestingly, the peak age group for setting-up an SMSF was 45-54, accounting for almost a third of new members.
These age groups would tend to reflect extremely long-term planning by SMSF members. Keep in mind that members aged in their mid-forties may be planning to spend at least another 20 years in the workforce, depending on circumstances, and up to another 30 years or so in retirement.
Yet while the SMSF sector is being continually replenished with new younger members and new funds, it is also clear that SMSF members are entering retirement in rapidly-growing numbers. And proper planning for an SMSF in pre and post-retirement is a critical part of sound financial practice.
A close read of the specialist superannuation commentary on this month's federal Budget truly underlines the value of good advice from an SMSF specialist - for all stages of an SMSF's life, from its establishment to its final years.
By Robin Bowerman
Smart Investing
Principal & Head of Retail, Vanguard Investments Australia
10 May 2016 | Retirement and superannuation
Latest Newsletters
Hot Issues
- Aged care report goes to the heart of Australia’s tax debate
- Removed super no longer protected from creditors: court
- ATO investigating 16.5k SMSFs over valuation compliance
- The 2025 Financial Year Tax & Super Changes You Need to Know!
- Investment and economic outlook, March 2024
- The compounding benefits from reinvesting dividends
- Three things to consider when switching your super
- Oldest Buildings in the World.
- Illegal access nets $637 million
- Trustee decisions are at their own discretion: expert
- Regular reviews and safekeeping of documents vital: expert
- Latest stats back up research into SMSF longevity and returns: educator
- Investment and economic outlook, February 2024
- Planning financially for a career break
- Could your SMSF do with more diversification?
- Countries producing the most solar power by gigawatt hours
- Labor tweaks stage 3 tax cuts to make room for ‘middle Australia’
- Quarterly reporting regime means communication now paramount: expert
- Plan now to take advantage of 5-year carry forward rule: expert
- Why investors are firmly focused on interest rates
- Super literacy low for cash-strapped
- Four timeless principles for investing success
- Investment and economic outlook, January 2024
- Wheat Production by Country
- Time to start planning for stage 3 tax cuts: technical manager
- Millions of Australians lose by leaving savings in default MySuper funds
- Vanguard economic and market outlook for 2024: A return to sound money
- An investment year of ups and downs
Article archive
- January - March 2024
- October - December 2023
- July - September 2023
- April - June 2023
- January - March 2023
- October - December 2022
- July - September 2022
- April - June 2022
- January - March 2022
- October - December 2021
- July - September 2021
- April - June 2021
- January - March 2021
- October - December 2020
- July - September 2020
- April - June 2020
- January - March 2020
- October - December 2019
- July - September 2019
- April - June 2019
- January - March 2019
- October - December 2018
- July - September 2018
- April - June 2018
- January - March 2018
- October - December 2017
- July - September 2017
- April - June 2017
- January - March 2017
- October - December 2016
- July - September 2016
- April - June 2016
- January - March 2016
- October - December 2015
- July - September 2015
- April - June 2015
April - June 2016 archive
- Making investing a family affair
- Super and divorce: a personal finance issue
- Market Update - May 2016
- ASIC flags SMSF investors in scam risk
- Older, greyer and still working
- Working and contributing to super past 65
- The pitfalls of part-year pensions
- Replenishing SMSF memberships
- Budget will hit 15% of SMSFs
- The insidious side of low interest rates
- Market Update - April 2016
- Budget 2016-17
- Do investment principles stand test of time?
- Estate Planning - early inheritance
- US economy will bend, not break
- A detailed look at the ATO’s new LRBA guidance
- Defying life's blueprint
- ATO continuing lodgement crackdown
- Another twist on the gender savings gap
- Market Update – March 2016
- Going solo
- Use our online budgeting tools to help plan your future.
- Age Pension means-test prevents rational decision-making
- Changing times for super collectables
- Preservation Age Rule
- Why investing for retirement isn't just about super