16 Aug 2021

How Much Superannuation do I Need to Self Manage?

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While technically, there is no minimum amount you need in your super to self-manage your account, data shows that Self-Managed Super Funds with less than $200,000 in them have a negative return on their assets and are not cost-effective. 

What is a Self-Managed Super Fund?

A self-managed super fund (SMSF) is a type of superannuation fund (or a trust) created and managed by yourself. With this type of fund, any contributions you or your employer make go into this fund, and then you decide how you use and manage the money. These decisions may include how you invest the money, the insurances you need, and all the administration fees and requirements. 


Other Items to Note About an SMSF

It takes a lot of financial expertise to run a self-managed super fund successfully. Experts recommend consulting with a financial expert who specialises in tax, finance, and SMSFs. In addition, there are costs associated with running an SMSF, including:


  • Audit fees
  • Debts, such as mortgages, credit cards, and personal loans.
  • Reporting fees to prepare your annual tax return
  • Valuation fees
  • Insurance and legal fees
  • Broker and financial expert fees


These recurring costs are why experts recommend having at least $200,000 in your super fund before switching to a self-managed fund. Before setting up an SMSF, make sure you understand the investment risks, consider your financial expertise, how your super fund will impact your retirement saving, the costs associated with setting up and managing your SMSF, and whether you have the time to manage your fund correctly.


If you are interested in learning more about a Self-managed super fund, contact the experts at Mortgage House.


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