Is a Self Managed Super Fund (SMSF) right for me?

Taking the plunge into a a step back a decade or so. You're in high school, staring at the board and wondering when in your life you will legitimately ever require the use of the Pythagoras theorem.

Maths just isn't for everyone, and for those who struggle, they may find managing their own Self Managed Super Fund (SMSF) even harder. If you love your numbers however, this option could work for you.

How do SMSF's work?

SMSF are regulated by the Australian Taxation Office (ATO). Each fund can have up to four members, each of which is a trustee. Undertaking this role makes you are legally responsible for your fund, meaning you will be liable for your decisions – even if you're taking the advice of a professional. You'll need to set (and stick to) an investment strategy and keep meticulous records for an annual audit.

Is a SMSF right for me?

This situation does work well for many people, and over the years SMSF have been one of the highest-ranking options for super funds in terms of satisfaction for countless Australians, according to findings from research company Roy Morgan.

People who go down this path are typically differentiated by a number of factors.

Managing an investment portfolio requires plenty of research, organisation and administration, so they need to have  time to manage the fund

Another thing that is seriously beneficial is the financial experience, skills and confidence to make those important investment decisions.

Insurances are a key consideration, as these often come packaged up within superannuation. Rather than take the default option provided by superannuation funds, people with SMSFs will generally research and select their own life insurance, as well as income protection and disability cover.

Note that Virgin Money also offers Income Protection Insurance as a standalone product, outside of a Virgin Superannuation account. Speak to your financial planner if you are considering your income protection options.

Finally, they will usually have a decent superannuation balance to make sure all this hard work pays off.

Flexibility of a SMSF

A SMSF lets you do just about anything with your funds – many people invest in the property market, others get into precious metal investments, some go into shares, and others will create an investment portfolio with a mix of options. This is where research into the different options and markets is essential. You would need to know what's on the rise, what's currently falling, what can be relied on long term and what is better for a short term return.

You may need to ask for advice, work with a professional or teach yourself everything you need to know about SMSF if you plan on doing it yourself.

If you're set on taking an active role in your funds but don't think an SMSF is right for you, you may be able to take a more active role within a professionally managed super fund – such as one through Virgin Super. With Virgin Super Plus, you can decide the investment mix – the way your superannuation is invested across various asset classes.

Have you ever considered looking after your own retirement savings with a Self Managed Super Fund?