One of the many misconceptions surrounding Self-Managed Super Funds is that you need a large super balance before they are worthwhile. While this may have been the case a few years ago, the cost of setting up and maintaining your very own SMSF is probably cheaper than you think.

The ATO recommends that you should have at least $200,000 in superannuation before an SMSF is competitive with larger retail and industry funds. However, we think that it’s possible to manage an efficient fund with less than this.

Consider a husband and wife with $200,000 each in a retail or industry fund. Depending on their fund and investment mix, they could be paying fees of almost $4,800 between them. If they were to set up an SMSF, and invest in simple investments such as Australian Shares, Term Deposits etc., their total annual cost may be as low as $2,500. This includes administration, audit, ATO levies, and investment expenses (brokerage etc.).

Notwithstanding the cost advantage, there are other benefits to having an SMSF. Along with having greater control over investments and risk, CNS can provide SMSF’s with tailored tax advice and retirement strategies. Having superannuation experts review your fund annually (or more often) enables more effective tax, pension, and contribution planning.

This isn’t to say that the SMSF route is right for everyone. Typically, SMSF’s are suited to those who already (or desire to) take a great interest in their superannuation. While some investment experience can be advantageous, it is not absolutely necessary. It can be empowering and dare we say “fun” to take control of your retirement savings.