“Weak investment markets resulted in low returns and only a small increase in the balance of the typical SMSF,” the report stated.

Accurium general manager Doug McBirnie said the increased probability of a lower for longer situation where interest rates and equity returns remain low means that for the average SMSF trustee, it is now more difficult to keep up with the cost of meeting their desired lifestyle in retirement.

“As a result, fewer SMSF couples are able to afford the comfortable retirement lifestyle of $60,063 per annum, as defined by ASFA. The proportion of 65-year-old SMSF couples able to afford this lifestyle has fallen from 70 per cent to 66 per cent over the year,” the report stated.

Actuarial modelling performed by Accurium in the report revealed that only around one-quarter of SMSFs have a 95 per cent probability of achieving their desired lifestyle in retirement.

Slightly over half of SMSF retirees have an 80 per cent probability of achieving their retirement lifestyle goals while one in four are unlikely to achieve their goals.

The report indicted that the median desired spending level in retirement for an SMSF couple is $78,800, up from $75,000 a year earlier. However, 24 per cent of SMSF couples aim to spend over $100,000 a year in retirement.

The report also indicated that most trustees don’t have an explicit target to leave a bequest.

“From the completed plans, only 7 per cent of SMSF households have included a specific target to leave an inheritance. The vast majority are looking to use their superannuation to fund spending in retirement,” the report showed.

“For the SMSF trustees that have explicitly set a bequest, there has been a wide range of different levels. The average bequest was $780,000 and in most cases, the bequest was less than the balance of the SMSF.”

SMSF Association head of technical Peter Hogan said for trustees and their specialist advisers, these are challenging times.

“From our perspective, this is why it’s critical superannuation has a sustained period of stability free from significant changes to give trustees greater confidence in the system,” said Mr Hogan.