The goal of superannuation is to accumulate money to provide you with an income in retirement. To achieve this, the fund will normally invest in a wide range of assets.
Due to the long-term nature of the investment this will usually include shares, property, bonds, cash and other types of assets. These will be both Australian and international in order to provide further diversification.
This is your retirement income so it is essential you take an interest in your super fund and its investment options particularly when there is so much choice.
Some important points to consider:
- Most super funds offer a choice of investment strategies. Study the options and select the one most appropriate to your circumstances and goals;
- Because of the long-term nature of your investment it is important to include “growth” type assets such as shares and property. Even if their short-term performance is unknown, they will invariably provide a better return over periods of 5-10 years and more;
- By having a diversified range of investments you minimise the risk of poor returns from one asset class;
- Just because you are nearing retirement doesn’t mean you should have a short-term strategy – you may well be drawing a pension from your super account for the next 20-30;
- Remember that superannuation is not an investment in itself – it is a tax structure. The investments are held within the super fund and the fund is taxed at concessional rates to encourage you to save for retirement. But you have the choice of how to invest.
Superannuation can be confusing or boring to many people but don’t forget your quality of life in retirement depends upon it – it’s too important to ignore.
Make an appointment with us to explore your options further and take control of your superannuation.