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According to the latest Australian Taxation Office (ATO) statistics, more than 1.1 million Australians are members of self-managed super funds (SMSFs). The number has been steadily increasing for several years.
SMSFs are privately run super funds that can currently have between one and four members. The government has proposed to allow SMSFs to have up to six members from 1 July 2019, but this is not yet legislated.
Age and gender distribution
The age ranges and genders of SMSF members are fairly evenly spread between the ages of 35 and 84, as indicated in the table below. The average age of an SMSF member in Australia is 58.
Age and gender profile of SMSF members – all members
| Age bracket | Total members | Male members | Female members |
|---|---|---|---|
| Under 25 | 0.5% | 0.5% | 0.5% |
| 25-34 | 3.4% | 3.3% | 3.4% |
| 35-44 | 11.8% | 11.3% | 12.4% |
| 45-49 | 10.4% | 10% | 10.9% |
| 50-54 | 11.5% | 11.1% | 12% |
| 55-59 | 13.5% | 13.2% | 13.8% |
| 60-64 | 13.4% | 13.1% | 13.8% |
| 65-69 | 13.3% | 13.2% | 13.4% |
| 70-74 | 11.4% | 11.9% | 10.8% |
| 75-84 | 9.3% | 10.5% | 7.9% |
| 85+ | 1.5% | 1.9% | 1.1% |
Source: Australian Taxation Office
The ATO statistics also reveal that both men and women aged between 35 and 44 have been the most active in terms of recently establishing new SMSFs, as highlighted in the following table.
Age and gender profile of SMSF members – new members
| Age bracket | Total members | Male | Female |
|---|---|---|---|
| Under 25 | 1.3% | 1.3% | 1.3% |
| 25-34 | 12.5% | 12% | 13% |
| 35-44 | 32.4% | 32.5% | 32.1% |
| 45-49 | 18.3% | 17.5% | 19.2% |
| 50-54 | 14.7% | 14.8% | 14.6% |
| 55-59 | 10.9% | 11.3% | 10.3% |
| 60-64 | 6% | 6.4% | 5.5% |
| 65-69 | 2.4% | 2.6% | 2.2% |
| 70-74 | 1% | 1% | 1% |
| 75-84 | 0.4% | 0.4% | 0.4% |
| 85+ | 0.2% | 0.2% | 0.2% |
Source: Australian Taxation Office
Income ranges
The following table provides information on the income ranges of both male and female SMSF members.
Income and gender profile of SMSF members – all members
| Income range | Total members | Male | Female |
|---|---|---|---|
| Less than $20,000 | 22.6% | 19.7% | 25.9% |
| $20,000 – $40,000 | 18.5% | 16.2% | 21.2% |
| $40,000 – $60,000 | 12.5% | 11% | 14.2% |
| $60,000 – $80,000 | 10.5% | 10.4% | 10.7% |
| $80,000 – $100,000 | 8.9% | 9.4% | 8.3% |
| $100,000 – $150,000 | 10.7% | 12.9% | 8.2% |
| $150,000 – $200,000 | 6.3% | 7.7% | 4.8% |
| $200,000 – $500,000 | 6.1% | 8.2% | 3.8% |
| More than $500,000 | 1.7% | 2.5% | 0.8% |
| Unknown | 2.0% | 2% | 2% |
Source: Australian Taxation Office
Significantly, the above table also highlights that the proportion of female SMSF members earning a taxable income of less than $80,000 is higher than the proportion of male SMSF members. It also reveals that the proportion of male SMSF members earning taxable incomes above $80,000 is higher.
New SMSF member income ranges are fairly evenly spread, as indicated in the table below.
Income profile of SMSF members – all members
| Income range | Total members |
|---|---|
| Less than $20,000 | 10.4% |
| $20,000 – $40,000 | 13.4% |
| $40,000 – $60,000 | 14.7% |
| $60,000 – $80,000 | 13.7% |
| $80,000 – $100,000 | 12.9% |
| $100,000 – $150,000 | 16.2% |
| $150,000 – $200,000 | 8.3% |
| $200,000 – $500,000 | 6.6% |
| More than $500,000 | 1.5% |
| Unknown | 2.4% |
Source: Australian Taxation Office
Superannuation balances
The average account balance of all individual SMSF members according to the latest ATO statistics is $652,465. The table below shows that people in the 70-74 highest average account balances.
| Age bracket | Average SMSF member balance |
|---|---|
| Under 25 | $50,232 |
| 25-34 | $80,165 |
| 35-44 | $149,059 |
| 45-49 | $242,642 |
| 50-54 | $363,855 |
| 55-59 | $574,409 |
| 60-64 | $782,658 |
| 65-69 | $909,823 |
| 70-74 | $977,517 |
| 75-84 | $1,014,838 |
| 85+ | $893,180 |
Source: Australian Taxation Office
ATO figures further reveal that the average assets per member in the establishment year of an SMSF was $203,530 in 2016. This is consistent with the generally held view that the cost of setting up and running an SMSF may not be in the best interests of members with lower balances.
Locations
SMSFs are proportionally more popular in Victoria than any other Australian State or Territory. Although Victoria has 25% of Australia’s population, it has 31% of all SMSF members.
On the other hand, Queensland, Western Australia, Tasmania and the Northern Territory are under-represented in terms of SMSF members when compared to their respective shares of Australia’s total population.
The differences between SMSF members in the accumulation and retirement phases
The most recent ATO figures reveal that 47% of all SMSF members are currently in the retirement phase (previously known as the pension phase).
The majority of the SMSFs in Australia that are in the retirement phase have all of their members in this phase (i.e. no other members in the accumulation phase). It’s also important to note that the number of SMSFs moving into this phase has steadily increased over the past five years. This trend is expected to continue as a result of Australia’s ageing population.
According to a recent report by Class Super (an SMSF administration software company), the average age of an SMSF member in the retirement phase is 70, compared to 52 for accumulation phase members.
Class Super’s statistics also reveal that the average balance of older retirement phase members is higher than the average balance for accumulation members ($1,939,985 versus $772,947).
This larger balance finding is supported by ATO statistics showing that 69% of total SMSF assets are currently in the retirement phase, even though SMSFs in the retirement phase only represent just under half of the total number of all SMSFs in Australia.
Different types of SMSF members
The most common trait for those deciding to start or join an SMSF is having the motivation to choose and manage their own super investments. In 2017 CBA and the SMSF Association produced a report that broke down SMSF members into the following four investor profiles:
- The Controller: This is the most common type of SMSF member. They want to have a high degree of control over the management of their fund and investment decision-making. They may seek professional advice, but they are also confident in their own ability to manage their SMSF, especially in relation to investment decisions.
- The Self-Directed Investor: This type is less likely to seek professional advice in managing their fund or making investment decisions than a controller. They have a high level of confidence in their own abilities.
- The Coach Seeker: Coach seekers take a moderately active role in managing their SMSF and making investment decisions. They seek professional guidance to help them, but don’t outsource completely.
- The Outsourcer: This type of SMSF member prefers to almost totally outsource the day-to-day administration of their fund and investment decision-making to professionals that they hire.
The bottom line
The number of SMSFs in Australia has continued to rise in recent years, along with average individual member and overall fund balances. SMSF members are generally attracted by the freedom to choose and manage their own super investments. It’s important to understand that there can be significant costs and responsibilities involved with setting up and running an SMSF, so it’s important that the benefits outweigh the costs.
Learn more about whether an SMSF may be right for you.
You should seek independent professional advice based on your individual financial circumstances if you are considering setting up an SMSF. The information contained in this article is general in nature.
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