How do I choose an investment strategy for my super?
All investment strategies have some level of risk with the potential to deliver poor or negative returns at times. Generally, the higher the risk you're prepared to accept, the higher the potential return in the long term.
When choosing an investment strategy for your super, there are two things to consider:
- your age and how many years there are until you can access your super
- how much income you may need when you retire and how much risk you are willing to take to achieve that income.
Choose your super fund
What’s the best investment strategy for my age?
A growth/high growth investment strategy is typically a more suitable option when you are younger. Mainly because you have time before you can access your super and can bounce back after a market downturn. This investment strategy does carries greater risk and you will likely see your super balance drop sometimes. However, it generally delivers a better income in retirement.
If you want to maximise the potential earnings for your super, and you have time on your side, look at how your super is currently invested. You may want to consider changing your investment strategy to a growth/high growth style.
On the other hand, if you are nearing retirement, a more defensive/conservative investment style may be more suitable. This strategy helps avoid your super balance dropping as you get ready for retirement and need to access your super.
Some people fall somewhere in the middle – they are happy to take on some risk but are happy to accept lower returns over time and minimise negative returns. For these people, a balanced/moderate investment style may be a good option.
How do I know how my super is invested? Check your latest super statement.
A Wealth specialist can help guide you. Make an enquiry today.
Grow your super
It may seem like forever before you can get your hands on your super. That doesn’t mean you should ignore it. We cover some things that you can do to help grow your super.
You may have an idea of what you want to do once you retire from the workforce. Have you thought about how much income you will need to fund this?
Risk vs return
All investments carry risk – even investing in cash. Market conditions, inflation, changes to interest rates and economic downturns can all have an impact on your investment.
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