SMSFs, property at centre of women's quest for financial security

With new research showing that only about a quarter of women own property, the need to investigate ways of securing financial independence through property and superannuation has never been more acute.

Woman working at home with her child on the sofa while working on her laptop computer.
Women on average retire with $112,000 in super savings, which is $92,000 less than men. (Image source:

New research has highlighted the disparity between property investor genders, with only 27 per cent of women indicating they have invested in property.

The 2022 PIPA Annual Investor Sentiment Survey asked survey respondents for their gender for the first time in its eight-year history, which produced the telling statistic.

For those women who do invest in property, they often recognise there’s a potential shortfall in their income to create a healthy nest egg for retirement and invest to make up those shortfalls and avoid potentially experiencing poverty in their retirement.

Financial independence in 2023

Many women juggle a career and family responsibilities, some studying on weekends and at night while working full time.

For many women, the thought of being financially dependent on their husbands while taking time off work to raise children is a major motivation to start investing. Dipping in and out of the workforce not only disadvantages careers but also dries up superannuation contributions along the way.

According to the Association of Superannuation Funds of Australia (ASFA), women on average retire with a paltry $112,000 in super savings, a whopping $92,000 less than men.

Moreover, one in three women retire with no superannuation at all. Some 90 per cent of women will retire without the savings needed to fund a comfortable retirement lifestyle.

Building the superannuation nest egg

There’s work to be done to build up everyone’s super but women especially are disadvantaged thanks to pay disparities and their role as their children’s primary caregivers.

Caring for aged parents or other family members also restricts a woman’s earning capacity at a time when they could be earning a healthy income and increasing their super balance.

One way to address the super shortfall is to consider a Self Managed Super Fund (SMSF). With the right professional SMSF advice, it’s easy to know whether this type of vehicle is suitable for you.

Increasingly we’re seeing women setting up a SMSF to channel their super into investments that they choose and are often more aligned to their values.

An SMSF is a private superannuation fund you manage yourself. Your fund can have up to six members in it.

The major difference between an SMSF and other superannuation funds is the directors or trustees are also its members. Thus, the members in the SMSF can run the fund for their benefit.

You are also responsible for complying with super and tax laws, so it’s important to seek professional advice on all the responsibilities of running your SMSF before setting it up.

Why SMSFs work for women

Women enjoy several advantages through a self-managed super fund.

  1. Control
    You have complete control over your SMSF. You decide your investment strategy. After receiving the right personal advice from an SMSF professional it’s possible to invest in a wide range of assets, including residential and commercial property, managed funds, shares, or in fixed interest investments.

  2. Faster decisions
    Decisions can be made quickly and with less red tape to invest in profitable options or to exit poorly performing investments.

  3. Costs
    Before setting up a SMSF check to see how much it costs to set up the fund, the ongoing annual costs to run it, and the costs involved in putting an investment property into an SMSF.

Disadvantages of SMSFs

  1. It’s time-consuming
    Running your SMSF demands time to monitor your investment’s performance and stay up to date with compliance requirements and administration.

  2. Financial and legal risks in decision making
    Setting up and managing an SMSF can be quite a challenge if you don’t have experience in tax and finance-related issues. A poor investment decision can have painful legal and financial consequences, particularly tax issues.

  3. Reduced access to dispute resolution bodies
    SMSFs have limited access to dispute resolution bodies, so your SMSF can be exposed to damaging consequences if the directors/trustees are not able to access appropriate legal advice.

Why buy property within your SMSF?

You are allowed to buy an investment residential property or commercial property using your SMSF provided you comply with Australian Taxation Office rules. Using your SMSF as your property investment vehicle can:

  • be tax-effective
  • provide direct control over investment strategy and investment choices
  • increase your investment purchasing power
  • generate business benefits if you buy commercial property with your SMSF
  • reduce capital gains tax exposure.

One key difference between investing as an individual and via your SMSF is the ability to directly own property while having absolute control over your retirement investment strategy.

Buying a property via an SMSF can be a great approach to bringing your investment strategy to life to generate long-term wealth for your retirement.

Minimal cash flow impact

A well-managed SMSF has minimal impact on your cash flow. It gives women the option to manage their own money.

Your SMSF account earns compound returns for your retirement. Additional contributions, even small ones, add up over time, boosting your final balance. The earlier you set up your SMSF, the more you benefit in the longer term, as your money has more time to grow.

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