Like most important decisions in life, there’s no one-size-fits-all when it comes to choosing how to invest your super.
While most members are invested in our Balanced option (a diversified option that’s delivered strong long-term returns), you can choose to invest in one or a combination of our 13 different investment options. If you’re worried about your balance fluctuating a lot right now, it’s important to realise that you haven’t lost anything unless you switch your investment (which is called ‘crystallising a loss’). Despite short-term fluctuations, it’s important to weigh up your attitude towards risk against potential long-term growth. We know nobody likes to see their account balance go backwards, and it’s tempting to change your investments when conditions are uncertain. But there are a few things to consider.
Here are some tips and examples to help you find the right fit to suit your needs.
1. Work out your timeframe
How long until you start spending your super? Your investment timeframe can be a big factor when it comes to choosing an investment option that’s right for you. As a very general rule, the longer your super is going to be invested, the more risk you may be able to take. On the other hand, if you’re planning to withdraw super soon, you might consider a lower risk approach.
2. Decide how much risk you’re comfortable with
Once you’ve worked out your timeframe, consider how much risk you’re prepared to take on. In general, higher risk options tend to have higher return targets over long-term periods, but they’re more likely to be volatile over the short term. It’s important to choose a balance between risk and return that sits right with your timeframe and future goals.
3. Determine your future spending goals
Think about how much you’ll spend each year when you finish work. (Keep in mind, with inflation, things might cost more than they do now.) If super’s going to be your main source of income, how much will it need to grow from contributions and investment returns? Each of our investment options have different return targets, so it’s worth having a goal in mind when you’re looking at your choices.
Now, let’s look at some examples
These are general examples. You need to consider your own circumstances, keeping in mind that these examples haven’t considered the impact of significant volatility in investment markets. As you can see, there’s plenty of choice when it comes to investing your super, and the perfect fit is different for everyone.
We’ll help you find your perfect fit
As you can see, there’s plenty of choice when it comes to investing your super, and the perfect fit is different for everyone. It’s important to get advice before you switch. That’s why we offer expert advice over the phone as part of your CareSuper membership.* Book a call back from one of our financial planners.
Find out more about switching investments, how to get started and what else to consider on our website.
* Financial advice obtained over the phone, or through MemberOnline, is provided by Mercer Financial Advice (Australia) Pty Ltd (MFAAPL) ABN 76 153 168 293, Australian Financial Services Licence #411766.