Our superannuation calculator can give you an insight into what your retirement could look like
The money that goes into your superannuation is yours, just for later. While it may be tempting to let it tick along in the background, if you’re calculated, you can help maximise its value in the long term.
“The younger you start planning for retirement, the better off you’re going to be,” says Cindy Ponder, Investment Manager at HESTA. “In your younger years, you should allocate more to growth assets like shares, which are more volatile and will get you higher returns.
“Even as you approach retirement you should have some allocation to growth assets. With yields on fixed income investments now so low, people are making the choice to have growth assets even as they move towards retirement,” says Cindy.
Your risk profile is very individual, and this will influence how comfortable you will be in investing in growth assets like shares. “Some people are happy to see a 20% pull back in their investments, some are very uncomfortable. For each person it’s very individual. You need to think about what type of risk you’re willing to take before you get to retirement,” Cindy says.
So, what’s the best strategy? “I think the best strategy is to commit for the longer term. One of the biggest mistakes people make is that they see the market fall and they will sell at the bottom or switch to bonds and miss all of the upside. One of the best strategies is to contribute month to month and take advantage of downturns. Traditionally markets have always rebounded.”
Being calculated with your super is about planning, and for each person it’s different. “Think about your super in the context of what kind of retirement you want to have. Think about the assets you might own, travel you’d like to do and any future liabilities you need to be concerned with. Have the conversation with yourself and your family and make a long-term plan,” says Cindy. “It always helps to speak to an adviser who is well equipped to give you advice that’s specific to your needs.”