One of the most persistent myths in superannuation is that you need half a million dollars to set up a self-managed super fund (SMSF). In truth, control, strategy, and smart structuring matter far more than your starting balance.
Let’s look at two real-world case studies that break the $500,000 myth.
Case Study 1: Young couple with $150,000 super and a property dream
Alex and Jamie, both aged 35, had $150,000 combined in their industry funds. Their goal? Use super to purchase a $500,000 residential investment property.
With the right advice, they:
- Set up an SMSF with a corporate trustee
- Used a limited recourse borrowing arrangement (LRBA) to borrow $400,000
- Contributed their super as a deposit
Benefits included:
- Entry into the property market with concessional tax (15 per cent on rental income)
- Future capital gains tax discounts (possibly nil in pension phase)
- Fixed compliance costs (~$3,200 p.a.) that become more efficient as the fund grows
Case Study 2: Couple in their 50s with over $1 million in super
Sarah and Mark, both in their early 50s, had accumulated over $1 million in industry super. After years of paying percentage-based fees and limited control, they made the switch.
Here’s what changed:
- They rolled their super into an SMSF
- Purchased a commercial property leased to Mark’s business
- Diversified into ETFs and direct shares
- Created a bloodline estate plan using an SMSF will
Outcome:
- Flat costs (~$3,700 p.a.) compared to rising percentage fees
- Greater investment freedom
- Family wealth protected through SMSF-based estate planning
The bottom line
An SMSF can make sense at $150,000 or $1 million+ – what matters is alignment with your financial goals.
Fixed costs mean SMSFs become more cost-effective over time.
Most importantly, an SMSF gives you control over how your money is invested and who inherits it.
