New research shows younger Australians are establishing self-managed super funds with smaller balances. For many, the attraction isn’t lower fees. It’s having greater control over their retirement savings.
For years, Australians have been told they need $500,000 or more in superannuation before considering a self-managed super fund (SMSF). But is that actually a rule, or just a commonly quoted figure?
New findings from the 2026 Class Annual Benchmark Report, discussed at the Class Ignite conference in September, suggest the SMSF landscape is changing. More Australians are establishing SMSFs, younger people are taking an interest in managing their retirement savings, and the average balance of newly established funds is falling.
Perhaps the more interesting question is not how much super you need to start an SMSF, but why Australians are choosing to manage their own super in the first place.
What does the latest SMSF research show?
According to Class, a major Australian SMSF accounting and administration software provider, a record 52,020 new SMSFs were established in Australia during the 2025–26 financial year.
As at 30 June 2026, Australia had more than 680,000 SMSFs, with approximately 1.25 million members.
The research also highlights some interesting changes in who is setting up these funds:
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44% of new Class SMSF establishments were attributed to Millennials.
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45.1% were attributed to Generation X.
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The average starting balance of newly established Class SMSFs fell from approximately $496,000 in FY24 to $467,000 in FY25.
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The median starting balance also fell, from approximately $314,000 to $301,000.
The balance figures relate to newly established funds, rather than individual members, and FY25 is the most recent year with a reliable sample of lodged tax returns. Class platform figures also do not necessarily represent every SMSF in Australia.
Nevertheless, the trend is interesting. SMSFs are attracting people at different stages of life, including younger Australians who are becoming more involved in managing their retirement savings.
Why are Australians choosing SMSFs?
At Freedom Financial Solutions, we have helped thousands of Australians establish SMSFs. In our experience, the overwhelming reason people come to us is not to save on fees. It is because they want greater control over their retirement savings and how their money is invested.
Some want to choose their own shares or exchange-traded funds (ETFs). Others are interested in physical gold and silver bullion, property or other investments permitted under the superannuation rules.
Some simply want to know exactly what their retirement savings are invested in, rather than selecting from a range of managed investment options.
For others, it is about becoming more involved in their financial future. They want to understand their investments, make their own decisions and take responsibility for how their super is managed.
Of course, many industry and retail super funds also offer a range of investment choices, and an SMSF is not the only way to become more engaged with your super.
But an SMSF offers something different: the opportunity to make your own investment decisions directly, subject to superannuation law and the fund’s investment strategy. That greater control also brings additional responsibilities.
For many Australians, that control is the reason they consider an SMSF in the first place.
Is there a minimum balance required to start an SMSF in Australia?
No. There is no legal minimum superannuation balance required to establish an SMSF in Australia.
You do not need $500,000, $300,000 or any other prescribed amount before you can set up a self-managed super fund.
So where does the $500,000 figure come from?
Historically, discussions about minimum SMSF balances have largely focused on costs. An SMSF has establishment expenses and ongoing accounting, administration, audit and regulatory costs. When a fund has a smaller balance, those costs represent a larger percentage of its assets.
For example, if an SMSF has annual costs of $2,500, that represents:
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2.5% of a $100,000 fund
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1.25% of a $200,000 fund
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0.5% of a $500,000 fund
These figures are hypothetical and are not a quote for SMSF services. Actual costs vary and may include additional investment fees, insurance, company fees and other expenses.
Costs are important and should always be understood before establishing an SMSF. However, choosing an SMSF is not simply a matter of finding the cheapest way to hold your super.
The decision also involves what you want to invest in, how much control you want, your willingness to take responsibility for the fund and whether the arrangement is suitable for your circumstances.
A smaller balance does not automatically make an SMSF unsuitable, just as a large balance does not automatically make one appropriate. The decision depends on individual circumstances, including the costs, risks and responsibilities involved.
Why are more younger Australians establishing SMSFs?
One of the most interesting findings from the Class research is the growing participation of Millennials and Generation X.
Traditionally, SMSFs have often been associated with Australians approaching retirement who have accumulated substantial super balances. The latest figures suggest that picture is changing.
Younger Australians are increasingly considering SMSFs earlier in their working lives, rather than waiting until they have accumulated a particular amount of super.
Technology, online information and specialist SMSF administration services may also be making it easier for people to understand the process of establishing and operating a fund.
An SMSF can invest in a range of permitted assets, including shares, ETFs, cash, term deposits, physical gold and silver bullion, and certain types of property.
These investments remain subject to superannuation law, the fund’s investment strategy and other restrictions. Having an SMSF does not mean you can use your super for personal purposes or invest in anything you like.
The Class research does not establish the personal motivations of every new SMSF member. However, the growing participation of younger Australians raises an interesting question about how people want to manage their retirement savings over the longer term.
Is an SMSF worth it with $100,000, $200,000 or $300,000?
There is no single answer, because having enough money to establish an SMSF and deciding whether an SMSF is suitable are two different questions.
Someone with $200,000 in super who intends to make regular contributions and has a clear understanding of their responsibilities may have very different circumstances from someone with the same balance who is close to retirement.
Likewise, two people combining their super into one SMSF may have different costs and investment opportunities from someone establishing a fund alone.
Before deciding, it is worth considering a few important questions.
What do you want to invest in? Are the investments you are considering available through your existing super fund, or is there a particular reason you want direct control?
What will it cost? Compare the total establishment and ongoing costs of an SMSF with the fees and services of your existing super fund.
How involved do you want to be? An SMSF gives you control, but also legal responsibility for investment decisions, compliance and the fund’s ongoing operation.
What about insurance? Moving super can affect existing life, total and permanent disability, or income protection insurance arrangements.
What protections might you lose? SMSFs do not have the same protections as industry and retail super funds. For example, SMSFs are not eligible for the government compensation arrangements available to eligible APRA-regulated funds in certain cases of theft or fraud. Access to external dispute resolution also differs.
What happens as your balance grows? Your current super balance may be only part of the picture. Future contributions, investment performance and additional rollovers may change your circumstances over time.
Importantly, the Class research does not establish that smaller SMSFs are always cost-effective or appropriate. It shows that the people establishing SMSFs, and the balances they start with, are changing.
You can manage your own super without doing all the paperwork yourself
One common misunderstanding is that establishing an SMSF means you must personally prepare the accounts, organise the annual audit, complete tax returns and keep up with every reporting requirement.
That is not the case.
As an SMSF member responsible for managing the fund, you remain legally responsible for ensuring it complies with superannuation law. However, you can engage professionals to assist with accounting, administration, tax returns, annual audits and compliance requirements.
At Freedom Financial Solutions, we help Australians with the establishment, accounting, tax, administration and compliance requirements of SMSFs.
We can explain how the SMSF rules work, but we do not provide financial product advice or recommend whether an SMSF is suitable for your personal circumstances. For those decisions, you should seek advice from an appropriately licensed financial adviser.
So, how much super do you really need?
The latest Class findings are a reminder that the SMSF sector is changing. More Australians are taking an interest in their retirement savings earlier, and smaller starting balances are becoming part of the picture.
There is no magic $500,000 threshold that determines whether you can establish an SMSF.
For many Australians, the attraction is greater control over their retirement savings, rather than lower fees. They want to understand their investments, make their own decisions and take a more active role in their financial future.
The important question is whether that control, together with the costs, risks and responsibilities involved, is appropriate for their circumstances.
If you are considering an SMSF, you do not have to work through the establishment and administration requirements alone.
Find out how SMSFs work, what they cost and how to get started at freedomffs.com.au/smsf-setup/.
Sources and further reading
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Class: Five Key Trends Shaping the SMSF Sector, October 2026
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Professional Planner: Class Research on SMSF Establishments, September 2026
This article provides general information only and does not constitute personal financial advice. SMSFs are not suitable for everyone. Consider your circumstances and seek appropriately licensed advice where needed.
