And you may not be surprised that this percentage, calculated by Rice Warner Actuaries, is much, much higher than percentages for the big industry and commercial super funds.

However, a cursory glance at a few SMSF stats from various sources can sometimes given an incorrect impression about SMSF age demographics and the stages that an extremely large proportion of SMSF members are at in their lives.

In short, the super stats from the likes of Rice Warner, the tax office, as regulator of self-managed super, and the Australian Prudential Regulation Authority are worth a close look.

The sizeable percentage of SMSF money invested in super retirement products can be attributed to a range of factors. These include the older average age of SMSF members and their higher average assets As well, numerous informed SMSF members have clearly made a decision about the tax-effectiveness of super during their working lives and in retirement.

Further, many members of large funds understandably wait until reaching middle-age or older to setup an SMSF when their super assets are enough to make their own fund financially feasible.

That said, it would be wrong to gain the impression that SMSF members are largely older people who are either nearing the end of their working lives or in retirement. The reality is that a large proportion of SMSF members are quite young and would expect to remain in the workforce for a lot more years.

Critical points to consider when looking at the age demographics of the self-managed super sector include:

• Superannuation retirement products include transition-to-retirement (TTR) pensions. Countless SMSF members receiving TTR pensions would be planning to stay in the workforce in a full or part-time capacity for years to come.
• Although the SMSF sector has a higher age demographic than other super sectors, the ages of SMSF are much wider spread than the averages suggests. (Of all current SMSF members, 42 per cent are younger than 55 while 74 per cent are younger than 65, according to the ATO.)
• SMSF membership is being continually replenished with younger members. (Almost 44 per cent of people who established SMSFs in the March quarter of 2015 were under 45.)

It is worth stressing that SMSF members aged, say, 65 can typically expect another 30 years or so ahead in the super system.

In turn, this underlines the desirability of having an appropriate long-term strategic or target asset allocation for an SMSF portfolio with a sufficient exposure to growth assets, given the fund members' personal circumstances.

By Robin Bowerman
Smart Investing 
Principal & Head of Retail, Vanguard Investments Australia
01 September 2015