Wealth Connexion explains what superannuation option is best for your lifestyle.
Considering the high cost of living in Brisbane, it’s important to choose a reputable superannuation fund for a comfortable retirement. With so many options, however, it can be difficult for you to choose what approach is the best for you and your savings. To ensure you make the right financial decision, you should consider the following factors.
Investment Horizons
Firstly, you need to consider how long you want to be investing before you retire and how long you want your money to last after retirement. By doing so, you will be able to better judge what investment strategy is right for you.
Level of Control
You should think about how much control you want over your investments. If you or your financial advisor already have an investment strategy, you might want to opt into a fund that offers you more control over your investments.
Risk
When accounting for risk, how long you will be investing is a factor you need to consider. If you plan on investing for only a short amount of time, the risk of investment fluctuations harming your savings is higher. In contrast, investing for a long time may help you mitigate the impact of fluctuations. However, long-term investors will have to contend with inflation.
After overviewing these factors, you can now select what superannuation option is best for you. The most common options are growth, balanced, conservative, cash, and ethical.
Growth
- Although it is the riskiest option, growth can also have the highest return on investment.
- Around 85% of your money is put into shares or properties.
Balanced
- While a more stable option than growth, balanced is still considered risky.
- Around 70% of your money is put into shares or properties.
Conservative
- Conservative options are more stable than both balanced and growth but has a lower return on investment.
- Around 30% of your money is put into shares or properties.
Cash
- Cash options are both most stable and has the least return on investment.
- Around 100% of your money is put into banks or credit unions.
Ethical
- Ethical options refuse money to companies that fail to meet certain environmental or ethical standards.
- Ethical options can range from high growth to conservative styles of investment.
Although this information does give you a good framework as to how you should pick your superannuation options, the best way to know what option is right for you is to consult your financial advisor.
Wealth Connexion’s team of Brisbane-based financial planners can help you create better financial habits and provide practical solutions to help you with your future wealth creation. Contact us at 07 391 5666 or email us at admin@wealthconnexion.com.au