Before delving into whether it’s a good idea to combine your super with that of a spouse or family member, we’ll clarify how combining your super works.

Despite the widely held notion that funds are combined into a single account when you combine your super into an SMSF with a partner or family members, you still wind up with your super separated into individual accounts.

Superannuation, by law, is an asset held in trust for an individual. Therefore, each member of an SMSF has his or her account inside the SMSF. Combining the balances of two or more people into a single SMSF does not pool the money in the sense that all the money is consolidated into a single account. Instead, it brings the two separate accounts under the one ‘roof’, allowing control over where those funds are invested, and providing more borrowing power, as a single entity controls the combined fund.

The Benefits of Combining Super With Family or Partners

So, if the balances remain in individual accounts, what are the benefits of combining super with your spouse or family members?

Although the funds remain allocated to each person, once combined into an SMSF they are effectively brought under the control of a single organisation and are treated as a pooled fund for investing and financing purposes. Combining your funds can provide access to investment opportunities you may not have qualified for with just one person’s super, and you will pay only one set of management and administration fees.

For example, say you have $180,000 in super, and your partner has $150,000. Individually, neither fund is quite big enough to qualify for a full-service SMSF service. But, with the two funds combined, it’s a serious fund.

As a consolidated fund, you have over $300K to invest in a much broader array of investment opportunities than in industry or retail super funds. With $300K under one SMSF, you have a higher borrowing capacity and the ability to purchase property under your SMSF. If you were to leave those balances in a traditional super fund, you would be subject to two sets of fees of roughly 1-3% per year, with very little control of how or where the money is invested.

Combining your funds into a single SMSF also allows you to structure your fund to protect your assets best, reduce your tax exposure, minimise fees, and with access to a qualified financial advisor, grow your nest egg to support you through retirement into your senior years. Interested in combining your super into an SMSF with a spouse or loved one? Talk to the team at Parcon Group and see how we can help.