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Worried about super?

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Money Made Simple - Bernie answers a question from a local resident about Super.

Bernie,

I have just been watching the news and am very worried about my super. I am 55 years old and have just started to think about retiring in the next ten years as the kids have just left home and now I think my super is going down fast. What should I be doing?

Sam, Minchinbury

Well Sam,

There is no doubt that the last couple of weeks have been a bit scary on many investment markets. It is hard to know what is happening with your super in particular as everyone has different investments within their super.

If you have a good financial planner then you should have selected investments with them that suit your risk profile. This is based on how you feel about the risks versus the possible (or likely) returns of various investments. A professional financial planner will probably have you invested in a range of assets (shares, property, bonds etc) from Australia and overseas. This diversification is a defence in difficult times. A great example of this is that during the Global Financial Crisis of 2007-2009, Australian Bonds actually performed better than money in the bank.

Many super funds offer cash options, including Term deposits and if you have already chosen these then don’t worry about what the markets are doing as your balance will not be adversely affected.

The key advice from me is don’t panic and don’t chop and change. Get professional advice that is focused on your needs, make a decision based on that advice and stick to it.

In the long term, a mixture of shares and property in your super will most likely provide better growth over the long term than cash only….but it will go up and down at times.

Looking backwards over the past 8 years, Diversified investors in conservative, balanced or aggressive funds have done better than those in cash. Also, a Diversified Conservative investor has higher asset values now that prior to the GFC. That is the value of their investments is now higher than the start of the decline into the GFP in August 2007

Bernard Fehon

Bernard Fehon


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