I was told start a self-managed super fund, but it’s losing money. What do I do?

I was convinced to open an SMSF (self-managed super fund) in 2019. The promise was that my money would earn much higher returns than had been the case in my previous fund.

My balance now is only slightly higher than when I began, a touch under $300,000, despite five years of employer contributions. Some of the investments look like they might have made some money, but it has been eaten up by all the costs. It’s hard to make sense of. There is forex (foreign exchange), CFD (contracts for difference) and various other bits and pieces that make no sense to me.

I’m three years out from retirement and the whole thing is making me very stressed. What should I be doing?

How anyone with any moral compass could have recommended you shift to an SMSF and plow your retirement savings into a scheme that, on the face of it, at least would seem very aggressive and risky, is beyond me. I’m sorry you have had this experience.

I’ve commented previously that I don’t believe SMSFs make sense unless there is a specific investment case that requires them (for example, commercial property), or your balance is above $1 million.

Loading

It has since been pointed out to me that there are cost-effective SMSF solutions that do make them viable for lower account balances, so I may have been a bit harsh here, but certainly few would consider an SMSF to be suitable below $500,000 in retirement savings.

While an SMSF is a feature of your current unsatisfactory predicament, an SMSF is just a structure in which you can hold your retirement savings. It has costs, but so do all super funds. At your level of super savings, it’s probably an expensive option, but it seems to me this isn’t your main problem. The main problem looks to be how the money is invested.

Markets have been strong recently, and given your employer contributions, you certainly should have experienced significant growth in the value of your retirement savings.