Record numbers of Australians set up self-managed super funds in 2025–26, and many of them are younger than the typical trustee. For anyone considering the move, one question tends to come up early: how much money does an SMSF need to make sense? The answer from regulators is less clear-cut than many people expect, and balance is only one part of the picture.

A record year for new funds

According to the SMSF Association, citing ATO data, more than 50,000 new SMSFs were established in 2025–26, a record. The June 2026 quarter alone saw 12,264 new funds.

The age profile is shifting. Members aged 35 to 44 were the largest cohort of new members, at 39.1 per cent, and roughly 60 per cent of new members were aged 35 to 49.

SMSF Association chief executive Peter Burgess linked the growth partly to the 12 per cent super guarantee, which is building balances faster. More people reaching meaningful balances earlier means the cost-effectiveness question is being asked by a wider group.

What ASIC says about minimum balances

For many years, a single number dominated this debate. ASIC guidance for financial advisers previously referred to a $500,000 threshold as an indicator when considering whether advice to set up an SMSF was appropriate.

That changed in December 2022. ASIC released Information Sheet 274 (INFO 274), which consolidated and replaced its earlier guidance in INFO 205 and INFO 206 on disclosing SMSF risks and costs.

According to ASIC, INFO 274 removed the $500,000 figure. The regulator said balance alone is not the driving indicator of suitability, and is only one Factor alongside costs, risks, Trustee responsibilities and the time involved.

So there is no official minimum balance for an SMSF. INFO 274 is guidance for advice providers rather than a rule for trustees, but it signals how the regulator views the issue.

Why balance still matters

Removing a threshold does not mean balance is irrelevant. Many SMSF costs are fixed or semi-fixed, such as accounting, the annual independent audit and the ATO supervisory levy, which is currently $259 a year. Newly registered funds pay $518 in their first annual return, covering two financial years.

In practice, the lower an SMSF's starting balance, the greater the impact of fixed costs on overall returns. It also says SMSFs can be expensive to set up and run, and in some cases can cost more than retail and industry funds.

For example, a hypothetical fund with $3,000 in annual fixed costs would pay the equivalent of 1.5 per cent a year on a $200,000 balance. On a $1 million balance, the same costs would equal 0.3 per cent. Actual costs vary widely between funds, providers and the complexity of the investments held.

Research cited by the SMSF Association has found that SMSFs with balances below $200,000 are likely to achieve considerably lower net Investment returns than funds with balances of $200,000 or more.

That finding does not mean a fund above $200,000 will suit everyone, or that a smaller fund cannot work. It suggests that scale can matter, particularly in the early years when balances are still building.

Family pooling is one way some funds try to reach greater scale., an SMSF can have up to six members, each generally a trustee or a director of the corporate trustee. Combining balances may help spread fixed costs, although it also means shared decision-making and potential complications if relationships change.

Beyond the dollar figure

ASIC's broader point is that cost is only part of the assessment. Other factors a would-be trustee may weigh include time, skills and the responsibilities that come with the role.

Research indicates trustees spend on average more than eight hours a month managing their fund, or more than 100 hours a year. Trustees are legally responsible for the fund's decisions, even when they use professional advisers.

There are also protections trustees give up., if an SMSF loses money through theft or fraud, members do not have access to the government compensation that applies to APRA-regulated funds. SMSF members also cannot lodge complaints about their fund with the Australian Financial Complaints Authority.

Life events matter too. Illness, separation, death or moving overseas can complicate how a fund is run, and trustees may want to think about how the fund would operate if they could no longer manage it.

Tax and the $3 million threshold

At the other end of the scale, Division 296 took effect from 1 July 2026. According to the ATO, an additional 15 per cent tax applies to the proportion of realised Earnings attributable to a member's total super balance above $3 million, with a further 10 per cent above $10 million.

The tax applies to realised earnings, not unrealised gains, and is assessed to the individual rather than the fund. It applies regardless of whether a member is in an SMSF or an APRA-regulated fund, so it is not in itself a reason to choose one structure over another. For most would-be trustees, whose balances are well below $3 million, it may not apply at all.

Questions would-be trustees may ask

Rather than a single number, the decision may come down to a series of questions. What will the fund realistically cost each year, including advice and administration? How long will it take for the balance to grow to a level where those costs are proportionate? Does the trustee have the time, interest and skills to meet legal obligations? What would happen if circumstances changed?

The bottom line

There is no official minimum balance for an SMSF. ASIC removed its $500,000 reference in 2022 and now treats balance as one factor among several, including cost, risk, time and trustee responsibility. Fixed costs still weigh more heavily on smaller funds, and research cited by the SMSF Association suggests returns can suffer below about $200,000. Whether an SMSF is worthwhile depends on individual circumstances, and