What is the minimum amount to start an SMSF?


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For those looking to open a self-managed superannuation fund (SMSF), a minimum balance of $200,000 is required to make it a viable option.

Generally the recommendation is $300,000, but with the costs of establishing and managing a fund decreasing, due to technology and an increase in outsourcing, even $200,000 can be worthwhile.

This should not be too hard to achieve when you combine your own super with your partner's.

A little or a lot?

However, in addition to set-up costs, there are annual costs that must be taken into account. These include compliance, audit and management costs.

There may also be transaction and investment fees, depending on the investments undertaken, such as share brokerage, wholesale managed fund fees, bank charges and, if required, adviser fees.

As long as these annual costs don't add up to more than 2% of the assets in the fund, an SMSF can be a viable option.

Those considering setting up a SMSF should also ensure they are engaged and motivated, as they are ultimately responsible for the performance and compliance requirements of the fund.

Even for those with significantly more than $200,000 to invest, an SMSF might not be the best option if they don't have the level of engagement required to run it properly.

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