Reviewing your investment approach after moving to cash
Many members review their investments and move their super to cash during periods of uncertainty. Recently markets have been moving around with periods of recovery alongside ongoing ups and downs.
That can feel frustrating or confusing, especially when it wasn’t what you anticipated at the time.
This may have prompted questions about what to do next - particularly as retirement gets closer, or if you’re already drawing an income. Market movements can feel much more immediate and a fall in your balance isn't just a number on a screen, it's connected to your income, your security, and your plans.
What cash does well in retirement
- It protects the portion of your savings you'll need in the short term (typically the next one to three years of income).
- It removes the stress of watching your balance fluctuate when you're actively drawing on it.
- It provides certainty, which has genuine value - especially in the early years of retirement.
What to watch out for
- Inflation. If you are invested in cash and inflation is increasing, your savings generally are quietly losing purchasing power over time.
- Longevity. The longer you live the more important it is that your savings continue to grow - not just hold their value.
- Missing the recovery. If markets fall and then recover while you're in cash, you benefit from neither the stability of your previous diversified position nor the upswing of the recovery.
The challenge with timing
Moving to cash can provide short-term stability. However, it also introduces a second decision - when (and whether) to make a change again. Market recoveries are often unpredictable and can occur quickly. By the time markets feel more stable, some of that recovery may already have taken place.
This can make timing decisions difficult.
It’s common for members who move to cash during uncertain periods to remain there longer than intended. Over time, this can affect how savings grow and for those drawing an income from their super or approaching retirement, how long those savings may last.
Balancing stability and growth
In retirement, or as you approach it, the focus is often on balancing:
- stability
- income
- and long-term sustainability
The way diversified investment options are designed may help this balance, supporting income needs while allowing for some growth over time. Even in retirement you balance can continue to grow.
What to consider now
If you’re reviewing your position, it can help to think about:
- your current income needs – how much income do you need in the next 12 months?
- how long your super needs to last
- your comfort with market movements
Taking time to understand your options
Markets can remain unsettled for long stretches and global events can add to the uncertainty. Taking time to understand your options, and how they align to your broader plans, can help you move forward with confidence.
The bottom line
There's no universal right answer. Having some of your retirement savings in cash may be sensible. Having all of it there for the long term carries its own risks - particularly inflation and the risk of outliving your money.
The most important thing is to have a deliberate plan, rather than letting a decision made in a moment of market stress become your default strategy for the longer-term.
Practical steps you can take
- Log in to MemberOnline to review your current account balance, investment options, and pension payment settings.
- Check that your pension drawdown amount reflects what you actually need - drawing more than necessary accelerates the depletion of your savings.
- Learn more in this article about the role of cash in your savings especially when you are near or in retirement.
- If you’re unsure what to do, book a session with a CareSuper Superannuation Adviser to discuss your options. We offer access to financial advice for members around your investment options at no additional cost.
How to make an investment choice
If you decide you’d like to review or change how your super is invested, Member Online is the best place to start. When you log in, you can:
- see your current investment option(s)
- explore the full range of CareSuper investment options
- learn more about making the right choice that suits you
- make changes at a time that suits you
Changes made in Member Online are straightforward, and you can update your choice again in the future if your circumstances or comfort level change.
Log in to review your investment options
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