Latest News

Hot Issues
spacer
SMSFs attract younger members
spacer
Heed restrictions on downsizer contributions
spacer
Access to more resources and tools than most websites.
spacer
Valuations key to avoiding NALI restrictions
spacer
SMSF advice appetite strong, says ASIC
spacer
For a smoother path to investment success, diversify
spacer
How's Australia doing statistically?
spacer
LRBA changes mostly affect Melbourne, Sydney retirees
spacer
Lessons from the 2019 Index Chart
spacer
The global economy at midyear: How our views have changed
spacer
The biggest global corporations since 1998
spacer
‘Retrospective’ LRBA measures tipped to cause headaches
spacer
Downsizer Super Contribution
spacer
Keep track of how Australia is really ticking over.
spacer
Insights from the 2019 Vanguard / Investment Trends SMSF survey
spacer
What falling interest rates mean for investors
spacer
ATO releases ‘welcome guidance’ on death benefit income streams
spacer
Super growth reducing age pension drawdown
spacer
Big four firm outlines new financial year checklist for SMSFs
spacer
Asset allocation as you age
spacer
Australia - the story goes on.
spacer
Consolidate your super and save
spacer
Critical documentation steps flagged with switching SMSF loans
spacer
Good investment habits versus damaging biases
spacer
Control considerations flagged with death benefit pensions for children
spacer
Interest rate for SMSF loans set to rise under safe harbour terms
spacer
Recession on our mind
spacer
What it will take to close the super gap between men and women
spacer
Australia - How are we going as 2018-19 ends?
spacer
LRBAs, guarantees in need of review after property market falls
Article archive
spacer
Quarter 2 April - June 2019
spacer
Quarter 1 January - March 2019
spacer
Quarter 4 October - December 2018
spacer
Quarter 3 July - September 2018
spacer
Quarter 2 April - June 2018
spacer
Quarter 1 January - March 2018
spacer
Quarter 4 October - December 2017
spacer
Quarter 3 July - September 2017
spacer
Quarter 2 April - June 2017
spacer
Quarter 1 January - March 2017
spacer
Quarter 4 October - December 2016
spacer
Quarter 3 July - September 2016
spacer
Quarter 2 April - June 2016
spacer
Quarter 1 January - March 2016
spacer
Quarter 4 October - December 2015
spacer
Quarter 3 July - September 2015
spacer
Quarter 2 April - June 2015
spacer
Quarter 1 January - March 2015
spacer
Quarter 4 October - December 2014
Quarter 1 of, 2019 archive
spacer
When super isn't compulsory
spacer
Investors brace for Brexit - deal or no deal
spacer
ATO identifies SMSF contravention red flags
spacer
Extra website resources and tools is one way we offer you and your family more.
spacer
Tax and estate planning traps flagged with pension restructures
spacer
A checklist for a healthy financial year
spacer
High-risk LRBAs, TBAR on the ATO’s radar this year
spacer
All you need to know about how Australia is going.
spacer
Royal Commission report makes super fee recommendations
spacer
Four tips for boosting your super balance
spacer
New Year resolutions, New Year strategies
spacer
Part 4 - The major benefit of ‘behavioural coaching'
spacer
3 tips for weathering the market's bumpy ride
spacer
Common BDBN ‘pitfalls’ flagged in wake of ASIC action
spacer
Case law points to ‘growing importance’ of SMSF document chain
spacer
How Australia is performing.
spacer
Global outlook summary: Down but not out
spacer
Australia - a comprehensive run-down of our vital statistics.
spacer
Your guide to smarter holiday reading
spacer
Verifying asset values in a SMSF.
spacer
Admin, BDBN errors flagged for SMSFs this year
spacer
ATO targets non-arm's length income - NALI
spacer
Retiring in their 30s or 40s?
SMSFs attract younger members

Given that self-managed super funds (SMSFs) hold more than half of the retirement dollars in super, it is easy to assume that self-managed super is dominated by older members. Not so.

         

 

In reality, a high proportion of investors establishing SMSFs are middle-aged or younger. And it seems that the average age of new SMSF members is getting younger.

The tax office's latest quarterly SMSF report shows that more than 15 per cent of investors who established SMSFs in the March quarter of 2019 were aged under 34, while a third were aged 35-44.

Indeed, 35-44 is the peak age group, by far, for establishing a self-managed fund.

Further, 80 per cent of investors who established SMSFs in the latest March quarter were under 54. And the 2019 Vanguard/Investment Trends SMSF Report notes that SMSFs are being established at lower average ages in recent years.

Other tax office statistics indicate that the age range of SMSF members – no matter whether the funds have existed for many years or setup in recent months – is widely distributed. At June 2018, 65 per cent of SMSF members were under 65.

A key financial decision for many fund members is whether to switch from a large APRA-regulated fund to an SMSF. Even the strongest advocates of self-managed super would agree that SMSFs are not for everyone – regardless of age.

Before setting up an SMSF

Some of the things to consider when deciding whether to setup an SMSF include:

  • Super balances: Unavoidable costs of running an SMSF can handicap the returns of low-balance funds. Are your super savings large enough for an SMSF to be financially viable or should you wait for a few more years until your savings are higher?
  • Knowledge: Do you have enough knowledge about sound investment practices and the legal obligations of SMSF trustees? And are you willing to take specialist professional advice when needed? (Considerations here include trustee duties, investment risks, likely returns, liquidity, investment diversity, risks of inadequate diversity and investment selection.)
  • Time: Are you willing to set aside the time necessary for running an SMSF? Most SMSF trustees receive at least some professional assistance, ranging from fund administration to full financial planning.

Creating a new SMSF portfolio

A fundamental task for new SMSFs is, of course, to create an investment portfolio in accordance with their chosen asset allocation. (A diversified portfolio's asset allocation – the proportions of its total assets that are invested in different asset classes of mainly local and overseas shares, property, fixed interest and cash – spreads risks and opportunities.)

More SMSFs are taking a "core-satellite" approach to the creation of their portfolios. With this approach, the core of a portfolio is held in low-cost traditional index funds or ETFs tracking selected indices with smaller "satellites" of favoured directly-held investments (such as shares) and/or actively-managed funds.

The 2019 Vanguard/Investment Trends SMSF Report shows that of the estimated 393,000 investors holding ETFs in April this year, almost a third were SMSFs.


Written by Robin Bowerman
Head of Corporate Affairs at Vanguard.
06 August 2019
Vanguardinvestments.com.au

 

 

 

 

 

Image resource only:

Site by Plannerweb