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My super has shrunk - help!

Over the last year, my super has shrunk significantly. I am 61, working part-time. Can you please give me some advice to conserve what’s left? 

We are all guilty at the moment of thinking short-term. It is a human trait that we are all wired for instant gratification. However, when investing for the future you must try to rise above your genes.

Why do I say this? Well, yes your super may be down but have you taken account of the four to five years of positive returns you experienced prior to the funds falling? Overall, your funds may not be down as much as you think if you look at where they started.

Also, investments will go back up again. Yes, I know if your read any newspaper at the moment you could be forgiven for thinking the worst, but let me tell you what the newspapers are not: this has all happened before and will happen again. It’s just unfortunate timing for you that you were about to retire, right in the middle of this event. And, of course, bad news sells better than good news.

So, I recommend you take the glass is half-full approach. As you are still working, you can afford to leave your super invested so the funds can recover as the market rises. You should do all the usual things you would be doing in retirement and that is watching your budget and cutting down on any unnecessary expenditure, make sure you turn off all the lights when not in the room and wait for the sales before buying new clothes, etc.

Of course, if you are really serious about improving your situation, you could increase the number of hours you work for the next year or two. Looking at this from the glass half-full approach, you are still only young and according to the actuaries have at least another 24-odd years of healthy life left in you yet, so if you are really worried about your super see how much you can earn and save over the next few years to improve your situation.

For advice you can trust, contact Switzer Financial Services.

Important information:This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

 

Published on: Tuesday, November 17, 2009

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