How much do you need to set up a SMSF?
There is no requirement for minimum balance to set up an SMSF by any legislation or SMSF rules in Australia.
ASIC has recommended a combined member balance $200,000 to be cost effective, however this has disputed by many SMSF professionals.
A SMSF gives all members 100% certainty, control, flexibility and free choices. The costs of running an SMSF can be shared by up to four members. In addition, SMSF services providers, such as iCare Super, offer fixed low costs SMSF audit and accounting services and has made the costs not very a big concern to the trustees.
How much does it cost to run an SMSF per year?
The basic costs for running an SMSF are as below:
iCare Super SMSF fees $74/month: $924/year
ATO Supervisory levy: $259/year
Total costs $1183/year
If you have a corporate trustee, you will pay annual ASIC review fee about $50/year.
Please note all the above costs are tax deductible in your SMSF when your member accounts in accumulation mode.
What is the ideal balance that an SMSF should have?
The SMSF with larger balance always can achieve economies of scale and the running costs become relatively insignificant. If an SMSF has $150,000 investment that can generate 6% return annually, eg $9000/year, the basic running costs $1183 (refer to the calculation in the above question) can be very affordable.