SMSFs may suit Gen-Xers
Whilst self-managed super funds (SMSFs) are traditionally a retirement vehicle sought by ‘Baby Boomers’, Andrew Hewison, director of Hewison Private Wealth, believes they also may be a suitable option for ‘Gen X’ers’ who are earning a high income or who own their own business.
According to the Australian Taxation Office (ATO), approximately 15 per cent of SMSF holders were aged below 45 years as of June of this year.
And while Hewison said that this was indicative of the younger demographic looking to take a more personalised approach to their retirement savings, he is conscious that SMSFs are not without their perceived obstacles.
“One of the main turn-offs to starting an SMSF is the perception of high running costs,” he said. “But if run well, this should not be the issue.
“An SMSF might cost 2 per cent to run, but if the assets outperform the industry alternatives by 3 per cent per annum, the SMSF wins out,” Hewison added.
On the topic of the added responsibility involved in the day-to-day running of an SMSF, Hewison said that professional advice was essential.
“Of course, there will be an added level of responsibility with a SMSF,” he said. “And they still need professional investment and tax advice.
“But it’s certainly an option for some younger investors.”
Recommended for you
AMP is to launch a digital advice service to provide retirement advice to members of its AMP Super Fund, in partnership with Bravura Solutions.
Unveiling its performance for the calendar year 2024, AMP has noted a “careful” investment in bitcoin futures proved beneficial for its superannuation members.
SuperRatings has shared the median estimated return for balanced superannuation funds for the calendar year 2024, finding the year achieved “strong and consistent positive” returns.
The second tranche of DBFO reforms has received strong support from superannuation funds and insurers, with a new class of advisers aimed to support Australians with their retirement planning.
