Are you ready for a self-managed super fund?
Written by Glen James
Host of the Retire Right & money money money (formerly my millennial money) podcasts & author of The Quick-Start Guide to Investing.
A community member recently asked: How do you know if you’re ready for a self-managed super fund (SMSF)? It’s a great question and one we hear more often from Australians nearing retirement. You might know someone who’s started their own fund and wonder why they made that move. But before you take the leap, it’s worth understanding what an SMSF really involves, and whether it’s right for you.
What is a self-managed super fund (SMSF)?
A self-managed super fund is a trust structure (like your existing fund!). Instead of a large super fund investing for you, you (and up to five other members) act as the trustees. You choose what to invest in and you’re responsible for meeting all the legal, tax, and reporting obligations. That control can be appealing, but it comes with serious responsibility. Running an SMSF is like running a small financial business: there are annual audits, strict ATO rules, and plenty of admin. It’s not a shortcut to wealth, it’s a long-term commitment that only suits people who want, and understand, that extra control.
More control doesn’t always mean more money
It’s easy to think managing your own fund means you’ll earn more. Who do you trust more than yourself?! But the truth is, most Australians are better off staying with their existing retail super fund. Retail and industry funds pool large sums, giving access to low fees, professional management, and strong diversification. They’re also heavily regulated, so your money is well protected. And no super fund has paid me to write this.
An SMSF might make sense if you have a clear purpose your current fund can’t meet, for example, buying your business’s commercial property inside super, managing complex estate planning, or wanting more niche investments. But if you just want more control or heard it’s ‘what successful people do,’ it’s probably not the right move.
How to know when you’re ready
You’ll know you’re ready for an SMSF when your goals outgrow what your current fund can offer. If you’re curious, start by talking with your accountant and financial adviser. If those conversations naturally lead to more control, more complexity, and more responsibility, and you’re comfortable with that, then you might be ready. Otherwise, rest easy knowing your existing fund is likely doing exactly what it’s meant to: growing your retirement savings safely and efficiently.
For me, setting up a self-managed super fund was purely about purpose: I wanted to buy a commercial property that my business could operate from. I already had a decent super balance, and for my stage of life, it made sense to use those funds to buy a commercial unit instead of leaving them in a regular fund. Now, my company pays rent to my super fund.
But I wouldn’t have done it if I wasn’t a business owner. It’s not about chasing returns, it’s about structure and control for a specific goal. Running an SMSF isn’t for everyone; there’s paperwork, rules, and costs that come with it. For me, the numbers and purpose lined up. For most people, a good industry or retail fund still does the job perfectly well.
Community question
Community member says: I was very concerned by the $3 million superannuation tax the government proposed, and I saw recently in the news they’ve made some adjustments to the proposal. What does it mean now?
Glen says: Yes, you are correct that the Labor government have taken in feedback and have come back to us all with adjustments to their proposed superannuation tax. Vince and I discussed this on the show recently but in a nutshell here are the significant changes they want to make to their proposal. Remember this has not yet been legislated.
The changes made in October mean that if legislated from 1 July 2026:
The total concessional tax rate applied to earnings on super balances between $3 million and $10 million will be 30 per cent.
The total concessional tax rate applied to earnings on super balances over $10 million will be 40 per cent.
Both the $3 million and $10 million super balance thresholds will be indexed to maintain relativity with the Transfer Balance Cap that was introduced by the Coalition.
They’ve also said they will adjust the earnings calculation so the concessional tax rates on large balances only apply to future realised earnings. If you enjoy reading press releases and tax you can dig deeper into the details here.
Here’s the discussion Vince and I recorded on these adjustments: it’s definitely a space to watch and wait.
