Aussies Reject Pension Titans, Turn to Crypto and Self-Managed Super Funds

Traditional Aussie super funds aren’t always known for delivering the most exhilarating returns.

Over the past 32 years, the median Growth fund has delivered 8% annualised gains – which at face value, is pretty solid.

But when you factor fees into the equation, people with low super balances can easily have their growth outpaced by administration costs. 

This is what Melbournian Timothy Yang discovered when, after a decade of a low(ish) paying job, he’d accumulated $20k AUD in his super.

At this rate – get the calculators out – Yang would have approximately AU $350k to play with upon retirement. It’s nothing to sneeze at, but almost half of the recommended balance for a 67-year-old to retire comfortably with (AU $600k).

And that’s why Yang, and thousands of other Australians, are shunning traditional super funds to explore higher-growth alternatives.

Enter the Self-Managed Super Fund.

Related: Australia Cracks Down on Crypto Scams, Winds Up 95 Companies

SMSFs Outperform Traditional Super Funds, Study Reveals 

At 29, Yang turned to managing his own retirement portfolio – and quickly reaped the benefits.

We have to admit, he did get a little lucky here, but thanks to some solid timing of the market, his investments in BTC, Nvidia and CrowdStrike ballooned 75% in just 12 months.

This has taken his retirement savings to double the median for Aussies under 30.

Not everyone will be as lucky as Yang and time the market perfectly. But the idea is, for someone at his age with an SMSF, you can weather the ups and downs of high-risk assets and expose yourself to growth in a way that traditional funds simply will not.

And it appears that the popularity of SMSFs hasn’t diminished their returns, with a study from the University of Adelaide revealing self-managed portfolios outperformed traditional funds by 1.2% per year over five years. 

SMSF Adoption Climbing Among Australians

Financial flexibility is a growing priority for young Aussies, and this is reflected in the rising appetite for self-managed super funds.

Having total control over your retirement portfolio is appealing to many – especially when assets like crypto are typically blacklisted from traditional, risk-averse super funds.

According to the ATO, the number of new SMSFs in the 23-24 Financial Year doubled compared to the 12 months prior. There are now 620k SMSFs in Australia, and counting.

Of course, it isn’t all rainbows and flowers when creating an SMSF. There are strict regulatory requirements, potentially expensive upfront costs and a lot of maintenance work required to ensure everything remains compliant.

But, is all of that worth it for complete sovereignty over your money? 

If you’re on the fence, then may I ask a follow up question:

Is all the effort worth it to name your retirement fund after a Simpsons meme?

Yes. The answer is yes.