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Self Managed Super Fund SMSF Minimum Balance

Self Managed Super Fund SMSF Minimum Balance

While there can be benefits of setting up a self managed super fund (SMSF), there are also costs involved with setting it up, running it, and winding it up.

Set-up costs include professional advice and fees (e.g. legal expenses).

Ongoing costs include investment, accounting and annual audit fees to comply with self-managed super fund legislation.

Wind-up costs include further professional advice and fees, paying out or rolling over any SMSF member benefits as well as any outstanding tax obligations of the fund.

This begs the question: what is the minimum amount you need to make setting up a self-managed super fund worthwhile?

The Australian Securities and Investments Commission (ASIC) is Australia’s corporate regulator. It is responsible for consumer protection in financial areas including superannuation.

According to ASIC, it may not be in your best interests to start a self-managed super fund if your superannuation balance is currently less than $200,000.

This is because the setup and ongoing costs of the fund generally won’t make it the most cost-effective way to build your retirement nest egg until you reach that $200,000 threshold.

However, if you do have less than $200,000 in your super, there can be circumstances where setting up and running an SMSF can still be viable. This includes situations where:

  • You are willing to undertake much of the administration and management of your self-managed super fund as its trustee.
  • Where you will soon (i.e. within the next few months) receive a large asset (such as an inheritance or business property) that can be transferred into a newly created SMSF.

When you have a balance of more than $200,000 in your SMSF, it can be more cost-effective than a retail superannuation fund. Whether it is depends on the activities of the self-managed super fund versus the retail alternatives available.

The larger your SMSF balance, the more cost-effective it is likely to be for you.

If you’re considering whether setting up a self-managed super fund is the most cost-effective option for you, it’s best to seek professional advice.

How we can help

There are multiple factors to consider when deciding whether an SMSF is a good option for you and how to structure it and manage it in the most tax effective way.

Our expert SMSF Accountants would be happy to speak or meet with you to discuss your situation. We’ll take the time to understand your circumstances and provide advice that maximises your financial position.

You can contact us on 1300 883 597. We have offices in Brisbane, Sydney and Melbourne and provide full SMSF services Australia wide via internet, email and phone.