It requires a lot of conviction to set up a self-managed super fund. Once you’ve taken on the task, however, it’s encouraging to know you’re in good company.
The Roy Morgan Research Superannuation and Wealth Management Report released in May showed self-managed superannuation continues to grow at the expense of retail and industry fund alternatives.
In the 12 months to December 2014, self-managed super attracted 7.8% of the funds switched between super products, a net gain of 6.9% when losses of 0.9% are accounted for.
The survey found the average super savings balance for DIY fund members was $683,200, and 42.6% or members contribute above the compulsory level.
For comparison, industry super fund members have an average balance of just over $120,000 and 16.6% contribute more than the required 9.5%.
The best way to achieve retirement savings goals is make contributions above the compulsory level. The tax benefits within superannuation then accelerate the process as higher compounded growth rates are applied to higher levels of capital.
The survey also found total household wealth grew 3.3% to $7.12 trillion in 2014, with owner-occupied homes making up 52.7% of the total.
Australian households spent the year paying down debt, with net wealth worth 85.5% of total assets at year’s end versus 84.4% a year previously.
Of those that remained in managed super funds, far fewer members felt motivated to switch manager last year, with 3.3% opting out of one fund and into another. In research from June 2012 nearly 5% of members had switched between super fund managers.