Many Australians regularly invest money in their superannuation fund, and the general belief is that the fund will increase in value and will provide them with the funds needed for a happy, well-funded retirement. However, stories about investors whose super accounts have lost value over time are prevalent, and many of these stories feature people who have had to delay their retirement plans by several year after their super account lost a considerable amount of value. This is something you want to avoid, and you can take steps to minimize the risk that this will happen to you.
The Risk of Superannuation Accounts
It is important to understand that most superannuation accounts default to investing in a range of investments. This range of investments may include both low-risk and lower growth investments as well as high-risk and higher growth investments. Typically, investment options that boast an increased opportunity to rise in value are also riskier to invest in. Safer investments may offer lower returns, but they also have lower associated risks. It is an unfortunate but true fact that many Australians do not understand the level of risk or potential for returns that is associated with the investments they have chosen or that have been pre-selected for them.
Taking Control of Your Super Account
The default investments that are associated with most superannuation funds are designed to moderate risk as well as growth. However, this balanced investment approach is not well-suited for all investors. Those who have chosen to wisely begin investing in a superannuation fund in their younger adult years may have considerable tolerance for risk, so they should consider investing in high risk, high yield investments. As you get older and approach your retirement age, however, your tolerance for a decrease in account value will decrease. You may gradually adjust your investments to be balanced with risk and growth in your middle age years. As you approach retirement, you may consider adjusting your investment to low risk investments.
In order to make wise adjustments to your superannuation fund, it is important to first educate yourself about how your funds are currently invested and to define your tolerance for risk and demand for growth of value. You can make changes to your portfolio as needed now, but you should also consider to review and compare Superannuation Funds periodically and make adjustments as needed as you gradually approach retirement age. If you need additional guidance, you can talk to a financial advisor or investment expert for assistance.
About the Author
Complete Removals is a SA family owned and operated business started by Corey Smith in 1998, he strives to change people’s perception that the true Aussie hard working spirit that built this country is still alive and well in today’s society, and he attracts employees with the same attributes.