Superannuation – your money, your choice

We’ve come a long way from the early days of superannuation with no choice of fund or any say in how your money was invested.

Over 550,000 self-managed super funds (SMSFs) have been established by Australians who want to control their retirement savings and the big funds have responded to the threat by offering more investment options, including “do it yourself” choices intended to copy self-managed funds.

This means most of us can actively manage our super.

One of the most popular investment strategy’s is to maintain a balanced portfolio, with a mix of cash, fixed interest securities, shares and property.  If one asset class falls in value, a better performance from others will offset losses.

High growth options within super tend to carry a greater proportion of volatile assets such as shares.  These investments will outperform the balanced option when shares are doing well however be prepared for your super to decrease in value during a stock market crash or correction.

You should consider how comfortable you are with risk, particularly as you approach retirement and need to use your super.

Active management gives you the opportunity to invest when you spot an opportunity with many people having a cash holding earmarked for this purpose.

Therefore, it’s worth giving some thought as to how these funds can be put to work earning you valuable returns.

Term deposits of 30 days are currently paying around 1.75% per annum, rising to 3.00% – one of the highest TD rates currently available – for a year.

A shorter term gives maximum flexibility for funds that won’t be needed immediately, with the option to reinvest at maturity.

Rates change frequently and it’s easy nowadays to quickly check the offers from a range of TD issuers and then switch to a term and rate to suit.

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