Best Low Cost SMSF for $50K

Hi All,

Anyone else try SMSF with a small amount like $50K, at current rate my super will never be enough for retirement due to low return rate even at best estimates per all the calculators. had long periods of bad luck etc hence my super account is low at an advanced age.

Only way is for me to invest that money is something like crypto or high growth stocks, industry superfund returns of 6%-10% annualized will never make it.

before u go attack me, this is something i'm willing to take a risk on otherwise i basically have no future after retirement. I have a registered stock trader who is a friend of mine who has been helping me pick stocks very successfully and i want to replicate that with my super.

but want to know if anyone tried to do SMSF with small amounts and what is the best SMSF? are the fees really that bad ? what did you use and recommend? thanks

Comments

  • SMSF is typically only cheaper than a regular fund once you hit $500k FUM.

    Anything less and you will bleed money due to the fees - between $1k to $2.5k depending on how it's managed. That could be up to 5% of your FUM wiped on fees each year. If you don't beat 5% performance significantly you will be losing significant money.

    Industry superfunds do have high growth options which will be much cheaper and less volatile than trying to trade crypto and high growth stocks on your own.

    There are also significant compliance burdens for SMSFs which you would need to meet, and having 100% allocation to crypto may be knocked back.

    I say all the above as someone in crypto for a long time, it is a bad idea to gamble what you have.

    I don't know how old you are or how long you have until preservation age, but making high risk moves as you have described have a significant chance of leaving you with very little or less for retirement.

    To be clear, none of the above constitutes financial advice and doesn't take into account your personal situation etc.

    • between $1k to $2.5k depending on how it's managed

      Does it include the annual lawyer/accountant fees? How about setup fees?

  • I've been with esuperfund for several years, which is $999 a year.

    With $50k you are going to be worse off with 2% fees than in a decent industry fund. But if you believe you are going to make massive returns on crpyto then I guess that won't matter.

  • i use esuperfund.com.au and i manage my own smsf. i started with about 40k. i think they are still offering first year for free, then about 1k/year fees.

    • Thank you this is the answer i was looking for, seems like you had same issue as myself. other than the 1K fees did you have any other fees to worry about or is that just the standard brokerage for buy/sell ? thanks

  • The consensus is that an SMSF needs $100k+ to make it worthwhile.

    Look at QSuper. % based fees that are very low if you choose the equities only options. $50k would cost about $140 all up on a 50:50 Au:Int'l split

  • Im not a expert but i have always been under the impression it isnt worth SMSF if you have less then 250k if not 500k in your super.

  • using esuperfund - free for the first financial year, and $999 per year then after. I found it pretty easy to setup.

    I setup my smsf four months ago with only $32k and have more than doubled it through investing in asx.

    With a balance of $70k, the fees work out to be approximately 1.4% annually and am very comfortable paying that whilst having full control of my investments.

    • +1

      It's better to make your own wealth than paying some crook salesperson.

    • Interesting, if you'd set it up in Jan/early Feb, you could have been telling us how your account halved in late March/early April.

      • agree. But the covid crash was the reason I setup an SMSF. I wanted to get a piece of the eventual recovery of the market. I absolutely understand these level of returns can't be sustained over a longer term.

    • You could have just bought shares in funds like AusSuper, and your fees would be about ~$500 with zero effort for compliance.

      What you're doing isn't the point of SMSF.

    • Thank you this is the answer i was looking for, seems like you had same issue as myself, low super balance that will never catch up using normal superfund returns. other than the 1K fees did you have any other fees to worry about or is that just the standard brokerage for buy/sell ? thanks

      I have been investing outside of super successfully and want to put the same strategy with my super in order to grow my balance

  • Just to be clear, there are different flavours of SMSFs with different costs, just like there are different flavours of super funds, industry or otherwise. There are really low cost SMSFs where you can do everything yourself and you just pay the ATO SMSF levy of $259 + whatever it costs for a cheap audit(few hundred bucks). Then there are low cost SMSF providers who do the accounting, audit, etc for you for around $1k (Eg, esuperfund) and you pay the ato smsf levy on top of that. Then mid cost SMSFs which are around the 1.5k mark. Then you’ll get the high costs SMSFs, typically administered by your accountant who normally does your tax return, who charge $2-3k+. I know my accountant quoted me $3k to do the admin stuff for my smsf when asking me why I went with esuperfund(I started with them for $699 a year) instead of just going with him as a one-stop shop. Well, that’s a silly question.

    Essentially smsf fees are flat fees while industry and retail super funds charge based on balance(some are capped after a certain $$$). If comparing viability of costs of SMSFs vs industry super funds vs retail funds, you need to compare like for like and know what the different price points are. No point comparing an expensive smsf provider against a cheap industry superfund, of course the expensive smsf provider’s fees won’t make sense until the super balance is significantly large enough where a flat fee makes sense. If going with a low cost smsf provider, that point comes much sooner.

    • I wouldn't think fees would be a problem if OP expect to massively high returns because they know better than all the professionals. Maybe OP should find a job in funds management and make millions in no time to retire on.

    • great point thank you

  • I’m interested in what a registered stock trader is?

  • Of course you are happy to take the risk, you aren't the one who will have to pay for your retirement when your crypto is worth $1 at retirement age.

    • Correcto. Our system encourages this, sadly.

    • Yeah another potential bail out case.

      If OP does turn the $60k into $6m there is nothing to stop them blowing all the money and end up being on the government pension by the time they 1 day past 70 years of age.

    • The underlying tech that powers digital assets are just in the genesis stage. Think in the terms of the early days of the internet when people asked "what is an email and how do I use it?"

      The tech will grow in development and adoption to change the way we use internet. Things like Dapps and WEB 3.0 is just the beginning.

  • +2 votes

    Note with the high costs given the small scale, most (that is, more than half) will underperform a benchmark of some sort.

    I know, I know, you think you are better than average - apparently 80% of drivers think they are better than average drivers. Food for thought.

  • Dude for such a small amount of money its not worth setting up a SMSF.

  • industry funds eg hostplus have choice plus which allows you to trade. if you know what you are doing. good luck. try and learn investing and trading or you will lose when your friend might survive.

  • Check which funds support crypto.

  • ESuperfund is reasonably straight forward. Can be setup online & free for 1st 12 months.

  • As an alternative suggestion, some super funds offer a direct investment option where you can choose in what to invest in yourself.