SMSF To Surge Over Next Decade

Posted on November 18th, 2013 · Posted in News

The gigantic pool of money Australians use from self-managed super funds to fund their retirement is set to double in the next decade.  The enormous pile of SMSF money currently being used in the retirement phase is resting at $296 billion and is tipped to almost double by 2023 to $562 billion.

New analysis by research house DEXX & R has found that of the nation’s $914 billion in retirement income assets expected by 2023, about 62% will be held in retirement phase assets.

DEXX & R’s Managing Director Mark Kachor said the strong enticement to lure Australians towards SMSFs would most likely spiral upwards in the coming decade as more and more people shift away from retail, corporate and industry funds.  “There are many people directly or indirectly pushing the SMSF concept,” he said.  “The real reason these have been actively promoted by financial advisers and also by other trusted advisers such as accountants and real estate companies … is that you can take control of what is inside your fund.”

Latest Australian Taxation Office statistics show in June this year there were more than 509,000 SMSFs with more than 963,000 members. These figures have continued to trend upwards, rising from June 2012 when there were 475,000 SMSFs and more than 899,000 members.  The report tipped that the strong growth in SMSF assets to fund a retirement income, together with a retiree’s diminishing appetite for risk and a preference for certainty of an income at retirement age, would boost fixed income investments.  It also forecasts growth in medium and long-term inflation-linked bonds by both Commonwealth and State Governments in Australia to provide stable income streams.

SMSF Professionals’ Association of Australia chief executive Andrea Slattery said self-managed super would continue to trend upwards in the next decade.  “Self-managed super funds have been consistently growing over a long period of time at 2500 to 3000 per month because people are engaged and they are interested in controlling their savings and retirement investments,” she said.  “The majority of them are professionals or self-employed who make their own decisions anyway and we will expect to see that continue.”

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