Achieving an appropriate retirement super balance

HI PC,

Looking for some general advice.

I am a 32 y/o defacto with approx. $125k sitting in super, with $930 p/m in employer contributions and an additional $215 p/m in salary sacrificed contributions, held with Australian Retirement Trust.

Associated fees are $62.40 pa flat fee + associated contribution fees.

I am seeking to build my balance to $1,050k by 67 y/o whilst building other external investments.

The following table is the current split of investment options.

Based on my age – would you be able to share insight on how I should re-arrange this for a more aggressive approach, and if my current contributions will achieve this amount?

 

At your age, I’d be sticking to either a single high growth option or a mix of international and Australian equities.

mixing cash, conservative, balanced, bonds along with equities is overcomplicating things and likely dragging down long term returns

Risk tolerance is a very personal thing though. If you are likely to switch to cash or another lower risk option after a crash, pick a single allocation (High growth, growth, balanced etc) that you can stick by.

Asset allocation and your risk tolerance — Passive Investing Australia

 

You have 28 years before reaching a condition of release, a long time in anyone's books.

Are these default selections or have you opted for these?

I would consider moving all of the conservative and retirement based selections into a high growth option as well as switching all future contributions to high growth. You have 40% tied to lower risk/lower growth investments and another 30% in the balanced fund. There's no harm in spreading risk however with a long investment horizon, a more aggressive approach may be warranted.

Note that switching will cause a CGT event and lock in any losses on those products.

I am not qualified to provide financial advice or fit to tie my own shoelaces but nearing pulling the plug have a greater exposure to growth assets than your portfolio (higher risk).

All super funds have a calculator to estimate your retirement income so play with one or several of those - CBus gave a result of about $1.5m at age 67 based on your numbers and an income stream in excess of $100k.

Keep it up.

 

You are asking on a public forum for what needs to be licensed financial advice that considers all of your circumstances. The balance of super at retirement ideally should be maximised. Future purchasing power isnt a constant value. The more, the better. The strategy you choose as "aggressive" also enhances risk (loss in X years of Y years) and as the time to retirement approaches may be tapered to reduce speculative risk. Those values are PAST returns which do not indicate future returns.

 

Switching pooled funds is not a CGT event as CGT is provisioned for daily.

 

However it is realised. Unrealised changes in investments are reported on a progressive value adjusted for tax. In most cases its not substantial. All CGT accrues consistently at 15% and then 10% aftre a year. And is also negative if it falls in value. . The event is a mere timing issue. The one thing to avoid is taking a loss them moving the FUND. The net loss is taken and then nothing can carry fwd. Unfortunately few funds will make this evident as all member reporting tends to show market values not original cost invested. Again its usually small value however those who pick choose and change investments and funds can do this several times and not realise.

Super is a long term investment vehicle and day trading or market picking highs and lows tends to underperform. In many ways it like assuming you know better. Like yelling at a football player and expecting you can run onto the field and out perform a whole game.