Quick Look
Focus: What it really takes to run your own super fund — from rules and costs to responsibilities.
Key Takeaways:
A Self-Managed Super Fund (SMSF) gives you full control over how your super is invested — but that control comes with legal, financial and administrative responsibilities.
They’re not for everyone. But for some Australians, an SMSF can offer strategic tax planning, direct property investment, or more flexibility in retirement.
Let’s break down what’s involved so you can decide if it’s worth exploring further — or better left to the professionals.
Many Australians like the idea of “taking charge” of their super. But managing your own fund means playing by strict rules.
If you don’t understand these rules or break them—even accidentally—you could face serious penalties, including losing your fund’s tax concessions. Although the Australian Tax Office provides more than ample opportunity to rectify deficiencies, if the tax concessional treatment is lost eventually lost, the implications are huge. Serious non-compliance can lead to significant penalties, including trustee fines and, in extreme cases, loss of the fund’s complying status. A non-complying SMSF may lose concessional tax treatment and face much higher tax, so professional advice is essential.
An SMSF only makes sense when:
It’s not a “set and forget” structure. The ATO treats SMSFs like small businesses—with annual audits, trustee duties, and legal obligations.
An SMSF is a trust set up to manage retirement savings. It must:
Trustees are legally responsible for:
Each year, your SMSF must be audited by an ASIC-registered SMSF auditor. Audits typically cost between $400 and $800, depending on complexity. Further more, SMSF assets (including direct property) must be reported at market value each year, with objective evidence to support the valuation. In some cases, an independent valuation may be needed.
You can choose where to invest, but there are rules. SMSFs can invest in:
But:
Ongoing SMSF costs may include:
So even a basic SMSF may cost $1,500 – $4,000+ per year — and more for complex funds.
Many advisers use ~$250,000 as a rough guide for cost-effectiveness, but there’s no fixed minimum — suitability depends on your goals, complexity, and how much admin you are prepared to do yourself.
Many proponents of SMSF promote them to access the benefits of the leverage of borrowing to invest in property to accelerate growth of the fund value. (refer to our library of articles about this).
Case: Jill and Marcus, both age 52, combined super balance $580,000 Jill wants to invest in listed ETFs (a bundle of direct shares) and a commercial property for her business to occupy. They set up an SMSF with a corporate trustee for flexibility.
First-year costs: Setup and legal: $2,200
Audit: $600 Accounting and tax: $1,800
Total: $4,600
Outcome Their fund now holds an ETF portfolio and a commercial unit leased to Jill’s business (at market rates). They review compliance with their accountant annually. Their SMSF gives them full control, but they spend about 10 hours a quarter on paperwork and administration.
Can I buy a house in my SMSF and live in it later?
No. Residential properties in an SMSF can’t be used by members or related parties, even after retirement.
Is an SMSF always cheaper than a retail fund?
Not necessarily. SMSFs become cost-effective only when your balance is high enough to spread the fixed costs.
Can I run my SMSF like a trading account?
You can actively manage investments, but excessive trading may breach your fund’s investment strategy or attract ATO scrutiny.
What happens if I make a mistake?
The ATO can issue fines, disqualify trustees, or remove your fund’s tax concessions. Getting professional help is critical.
Running your own SMSF can offer unmatched control — but it’s not a shortcut to better super performance.
It requires discipline, time, and a solid understanding of legal duties. If you’re just after lower fees or better returns, a low-cost super fund might still be a better fit.
But if you’re clear on your strategy, willing to do the work, and have a balance that justifies the costs—an SMSF could be a powerful way to take ownership of your financial future.
Is your super invested in the right option?
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Disclosure: General information only. Consider your objectives, financial situation and needs, and seek professional advice before acting.
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