First things first, there is no such thing as a typical SMSF trustee. Gone are the days where Self Managed Super Funds (SMSFs) were only used by the small business owner or wealthy individual approaching retirement. It is becoming more common for younger generations, such as Gen X & Y, to want to take control over their superannuation and establish their own super fund.

The two key reasons why younger people are establishing their own super fund is for control and flexibility. Through an SMSF you have the ability to buy direct shares, investment property and also to go out and borrow to invest in either direct shares or property.Young SMSF Investors

Earlier this year the ATO released statistics highlighting that 4 new SMSFs were open every working hour and of these new SMSFs 40% were people under the age of 40. Most of these people want greater control but are also time poor. Therefore what we are seeing is that younger investors, while still taking greater interest in the strategies and investment of their savings, are outsourcing the compliance and investments work to qualified SMSF Advisers.

So how are younger people investing their super?

Investors understand that superannuation is locked up until age 60 which means that a long term approach is adopted.  This has seen an increase in the amount of SMSF trustees / investors gearing into property and shares with their super. And why not? How are people expected to obtain a million dollar superannuation portfolio for retirement in 20 or 30 years’ time when they are restricted to only putting $25,000 pre-tax into super each year?

What does the future bring?

Most people can answer the question of how much is in their bank account but can’t answer how much they have in super. I believe a huge shift is on the way where young people will take over the SMSF market.

From 1 July 2013 Employer Superannuation Guarantee Contributions are moving from 9% to 12% and will be implemented via a gradual increase over the next six years. This means by 1 July 2019, 12% of an employee’s salary will be going to super. You work hard for your money. Will your money be working for you?

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Thomas Jacks BCom (Acc), SMSF SpecialistTM, Adv. Dip F.S. (FP)
“I want to be able to assist clients with their investment and retirement planning by providing real strategy advice. It’s my aim to not only help my clients but to educate them by addressing the entire picture” Google Plus


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