The SMSF age profile has undergone a sea change. Compared to July last year, the number of SMSF entrants between the age bracket 34 and 54 has shot up from 36.6% to 62.1%. For the age bracket 25-34, SMSF entrant list has nearly trebled — from a modest 4% to a formidable 11.1%.
Number of affluent SMSF members are increasing
High income earners are ganging up to join the SMSF club. Their numbers have also hiked by nearly 50% over the last year. In July 2013, the percentage of SMSF members earning in the bracket $100,000-$200,000 was 14.4. Today, this percentage is 20.5.
Low-income group on a decline
On the contrary, the presence of low income group members has suffered a fall. Cumulatively, the two low income group members contributed 42.2% and now they stand at a much feebler 27.4%. This marks an important shift in the SMSF age profile.
Money has come into the lives of the new SMSF members and in no small a way. A total of 2,333 new members have reportedly been earning between $100,000 and $200,000.
Investment diversification is the key
With heightened possibility of capital growth in foreign residential and commercial property, new SMSF members are seeking to invest offshore. It is advisable that these same members must look towards diversifying their investments inasmuch as they can. Irrespective of whether the investments are made in managed funds, bonds, collectables, shares or properties, diversification is the key to SMSF (or for that matter any other) investment.
Which direction do you foresee the SMSF age profile moving in near future?