Volatility-proofing your super

This article was originally published by Committee for Melbourne member CareSuper and represents the author's views.

Assess your risk appetite

It can be hard to know how much risk to take in the lead up to retirement? In general, the lower the risk, the lower the expected return over the long term. So, investing conservatively may help you avoid market lows, but it could also mean you miss opportunities to grow your balance.

To keep it simple, think about how much risk you’re willing to take to afford your retirement lifestyle and still sleep soundly at night.

Choose an investment option that suits you

Once you understand your risk appetite you can then review your super investment strategy. CareSuper offers a range of investment options each with different targets for returns and levels of investment risk. They are made up of two separate asset types:

• The first is what we call growth assets. These are generally made up of higher risk things like shares and property that are more aggressive with a value that can fluctuate over time.
• The other type are defensive assets which are invested in more low risk assets such as cash and fixed interest.

The more growth assets you hold the more likely your returns will be higher over the long term, but also more volatile in the short term due to market forces.

To decide what will work for you look at the options available, drill down into their specific asset allocations and weigh up the average return figures.

Consider downside protection

As part of the CareSuper investment philosophy your super is invested to minimise the impact of negative returns when the market falls. This is called ‘downside protection’. Protecting against downside risk means your super is better prepared for market downturns, and you can be more confident about recovering losses.

Know that you’re not alone

Market volatility can be unsettling but we’re here to help. As part of your CareSuper membership you have access to our super advisers^ who can:

• Assess your appetite for risk
• Discuss your investment options as a CareSuper member
• Help you understand if you’re on track for retirement.

If you need more complex advice, then speak with one of our financial advisers*. They’ll consider your whole financial situation, including your spouse, any assets you have outside super, your debts and your financial goals to help you plan your ideal retirement.

At CareSuper, our role is supporting you, our members in achieving your retirement goals. So, if market volatility is keeping you awake at night, please give us a call. We can’t wait to hear from you.

^Advice is provided by CareSuper Advice (ABN 78 102 167 877, AFSL 284443). A copy of the Financial services guide for CareSuper is available at caresuper.com.au/fsg 

*Advice is provided by one of our financial planners who are Authorised Representatives of Industry Funds Services Limited (IFS). IFS is responsible for any advice given to you by its Authorised Representatives. Industry Fund Services Limited ABN 54 007 016 195 AFSL 232514.

Bec Wilson - How to have an Epic Retirement webinar

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Join CareSuper on Thursday, 8 May for the live webinar. Spots are limited the webinar won’t be recorded, so register here: All-in-one virtual event platform | Zoom Events.

This is general information only and doesn’t take into account your objectives, financial situation or needs. Before making a decision about CareSuper, you should consider if this information is right for you. You may also wish to consult a licensed financial adviser.

Before making a decision about CareSuper, you should consider if this information is right for you and read our Product disclosure statement, Target market determination and Financial services guide. These are available at caresuper.com.au/pds or by calling 1800 005 166.

Past performance isn’t a reliable indicator of future performance. The value of investments can rise or fall, and investment returns can be positive or negative.

CareSuper Pty Ltd (Trustee) ABN 14 008 650 628, AFSL 238718. CareSuper (Fund) ABN 74 559 365 913. Advice is provided by CareSuper Advice ABN 78 102 167 877, AFSL 284443. Consider the PDS and TMD at caresuper.com.au/pds. A copy of the Financial services guide for CareSuper is available at caresuper.com.au/fsg.