To get the most from your super you need to understand the basics, develop a long term plan and monitor its progress ensuring you adapt your plan as your circumstances change.
Understanding risk and return
One of the challenging things about investing is the higher the returns you aim for, the greater the risk. But with the risk comes the potential to grow your super.
There are some ways to manage the trade-off between risk and return that may be worth considering.
How long do I have to invest?
If you don't need your super straight away, you have more time to ride out the highs and lows of growth investments.
Your investment time-frame is the amount of time you expect your money to be invested. Generally, the longer the time-frame, the higher the level of risk you may tolerate. This means short-term fluctuations in investment markets may not necessarily have a large impact over time.
The shorter your time-frame, the less aggressive your investment style may be. People with a limited time-frame for investment may not want to risk short-term fluctuations in investment returns and therefore opt for a more conservative approach.
Diversify your investment to help minimise the risk
Diversification is simply a term for spreading risk. It can be achieved by placing your investment in a mix of assets, such as shares, fixed interest, property and cash. This way, when one asset is not performing as well as expected, the other assets in your portfolio may help to balance the overall return.
TelstraSuper's diversified investment options, including Balanced and Growth, offer different mixes of growth and defensive assets, such as shares, bonds, property and cash.
Understanding types of assets
- include shares and listed property securities
- provide returns through capital growth as well as income from dividends
- generally carry higher levels of risk in the short term, yet can deliver higher returns over the long term.
- include bonds and cash
- earn returns mainly from interest payments
- generally carry lower risks, but returns are also likely to be lower over the long term.
How to get started
- set your goals: first, you need a clear understanding of your retirement goals. Whether you're relaxing at the beach, travelling or starting up a small business, you need to ensure that when you get to retirement, your means match your dreams.
- understand your needs: estimate how much income you'll need when you finish work.
- set an investment strategy: super is a long term investment, so it's important to set an investment strategy according to how long you plan to be invested. Keep track of your plan and monitor the progress of your savings over time.
- make a decision: you can invest your super in the default option, TelstraSuper MySuper for your age group, or you can choose an investment option.
Need help with your investments?
At TelstraSuper we’re here to help you build a secure financial future. TelstraSuper Financial Planning has a team of phone based Advisers who can provide you with simple advice to help you work out what investment options may be suitable for you. If you’d like to discuss your investment options or if you have any other financial advice queries contact us on 1300 033 166 or fill in our online contact form.Online contact form