Smart super changes as you get older

3 min read

A simple step by step guide to getting in control of your super.

Making one small change to your super investment mix early in life can make a huge difference to your retirement. If you’re not comfortable making your own investment choices, a lifestage fund can do the work for you.

Every pay cheque, your employer contributes 9.5 per cent of your salary into your super – money that you might not see for another 20, 30 or 40 years. Over the years those contributions can turn into quite a nest egg, but just how big will depend on how your money is invested.

Looking to the investment horizon

As you get older, your “investment horizon” changes. That’s the length of time you have left holding your super investment before you’ll want to (or be able to) cash it in. For most people, the shorter your horizon, the less risk you’ll want to accept.

For example, when you’re young, you might want more exposure to growth assets as you have more time to recover from short term losses.. When you’re young, you have many years before you can access your super, and there is more time to recover from setbacks. Higher returns at the start of your journey will help to build your super more quickly.

In your 40s though, you’re looking at only another 20 or so years before you retire, so you might have a greater need to preserve your capital and chose low risk investments.

Lifestage funds - taking out the legwork

A lifestage fund makes investment choices for you automatically, changing your portfolio mix every decade to reflect your age. Basically it does the hard work for you, investing your money in a diversified portfolio of assets.

The fund uses a multimanager approach with a number of diverse fund managers investing your money, a strategy which spreads the risk.

With a lifestage fund, your portfolio adjusts as you get older, this means it could lower your exposure to growth assets over time. You can see how BT does it on our Lifestage Funds page.

What if I want to still be hands on?

You can let your lifestage fund do all the work. Or, if you want to be more engaged, you can choose your own portfolio mix. In fact you can start off in a lifestage fund where the decisions are made for you and then, as you become more financially aware, opt to change the asset mix to your own personal choice.

Read up on BT’s lifestage funds and make sure you’re making the most of your super, whatever your investment horizon.

To Get Moving with your super visit or call 132 135.

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This information is current as at 01/05/2015.

This information does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. Superannuation is a long-term investment. The government has placed restrictions on when you can access your preserved benefits. The Government has set caps on the amount of money you can add to superannuation each year on a concessionally taxed basis. In addition, the government has set a non-concessional contributions cap. For more detail, speak with a financial adviser or visit the ATO website. ©2015 BT Financial Group – A Division of Westpac Banking Corporation.