5 new year’s resolutions for your SMSF

It was another big year. As lockdowns are faded into the distance, high inflation and high interest rates took their place to make 2024 a difficult year for many, with belt tightening across the board.  

As you pause for breath over the summer break, this is a time to start thinking about your financial fitness for the year ahead. While budgeting may be a focus, don’t forget to prioritise your superannuation as well.

If you put in a little effort now to make sure your self-managed super fund (SMSF) is in good shape, you will reap the benefits over the next 12 months.

So, what are some key resolutions to consider for your SMSF in 2025?

1. Resolve to keep on top of your investment strategy

The beginning of the year is a good time to dust off your investment strategy and consider whether it still meets your needs.

Is it too conservative? Not conservative enough? Are members approaching retirement and perhaps considering how their super will provide a reliable income stream in the years ahead, as opposed to focusing on growth alone? Are your fund’s asset allocations still appropriate given the changing economic environment and interest rate outlook?

These are all important questions to ask at least once a year. The answers will help you review your investment strategy to make sure it’s appropriate for all your fund’s members.

2. Resolve to rebalance

Once you’ve reviewed and possibly revised your investment strategy, you may need to rebalance your portfolio so it is in line with your strategy’s stated asset allocations.

Last year was a big year for equity markets across the board. But the gains in stocks might mean allocations to other asset classes have fallen below your objectives.

Go through all your investments and make sure they tally with the allocations outlined in your investment strategy.

Rebalancing is also something that will be easier if you keep on top of it on a regular basis. This doesn’t mean selling every time something grows in value and exceeds your stated allocations in your investment strategy – as the transaction costs would soon add up – but keeping a monthly tally of how market movements are affecting your asset allocations is one way of keeping on top of it.

3. Resolve to keep insurances in order

As an SMSF trustee you are required to consider the insurance requirements of the members in your fund. Insurance isn’t mandatory for SMSF members, but if they don’t have insurance they need to explain why in their fund’s investment strategy.

This explanation can be as simple as a one-line statement (see our investment strategy templates here) but it’s also a good idea to regularly review whether or not you want to have insurance in your SMSF. If you have new members who have moved from larger funds, their insurance requirements and needs may be different to other members and will need to be considered separately.

4. Resolve to educate yourself on regulation changes

Are you on top of all the rules and regulations that apply to SMSFs and how they might apply to the members in your fund?

One obvious change you should already be implementing is the increase in the super guarantee (SG) from 11% to 11.5% on 1 July 2024. But did you know it will increase again to 12% on 1 July 2025?

There have also been increases in the annual contributions caps which you might be able to take advantage of this financial year. The annual concessional contribution cap increased to $30,000 (from $27,500) on 1 July 2024 and the non-concessional contribution cap also increased to $120,000 (from $110,000) on the same date.

5. Resolve to boost your balance

In the interests of building your financial fitness, make 2025 the year to focus on boosting your super balance.

You can check your individual concessional (tax-deductible) contribution limits and the contribution amount you may be able to carry forward via your ATO myGov account under the super tab. Make a resolution to salary sacrifice, sell off some assets or do whatever you have to do to reach your contribution limits. This is even more relevant given the increase in the caps outlined above.

If you have cash to spare once you have used up your concessional contributions limit ($30,000 from 1 July 2024), you can still make non-concessional contributions up to the annual limit of $120,000 in 2024–25 or up to $360,000 using the bring-forward arrangement if you’re eligible.

You could also be eligible for the downsizer contribution if you are aged 55 or more (there is no upper age limit). If you are eligible, you can contribute up to $300,000 (and up to $600,000 for a couple) into your super account from the proceeds of the sale of your home.

The downsizer contribution doesn’t count towards any of your normal contribution caps. You do need to have owned the home for 10 years or more and it needs to be in Australia and not a caravan, houseboat or other mobile home.

In the current uncertain investment environment, boosting your SMSF balance should be your most important resolution for 2025 to ensure your fund will meet the retirement needs of all its members. These five simple steps will put you on the right path to making the most of your fund.