Converting portion of your super to cash

Discussion in 'Superannuation, SMSF & Personal Insurance' started by robbie_p, 30th Mar, 2020.

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  1. robbie_p

    robbie_p Well-Known Member

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    Hi All,

    I have started looking at my super a bit closer these days. Although im only in my 30's, its still good to maximise things where possible.

    I noticed that I have the ability to switch my super to the following options:

    ANZ Smart Choice Super 1980s (high risk)
    ANZ Smart Choice Super Cash (low risk)

    Currently, im 100% in ANZ Smart Choice Super 1980s (high risk), but have the option to put a % of the balance and future contributions into ANZ Smart Choice Super Cash (low risk).

    Is it a good idea to put a bit of your balance and future contributions into cash? If your view is that the markets are doing to drop over the next 6 months, perhaps protecting yourself from further loss would be maybe split balance 50% cash and 50% invested?

    Not sure of implications, costs or whether i should just leave things as they are.

    Thanks,
    Robbie
     
  2. Trainee

    Trainee Well-Known Member

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    How much are we talking about, and how good is your crystal ball? If it was good you would have switched to cash 2 months ago. Switch at 30% off the peak, and when do you switch back? After the bounceback that might be higher than we are now?
     
  3. Islay

    Islay Well-Known Member

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    @robbie_p This is a retail fund. I did look at this fund about 3 years ago with one of my offspring and if you had under 50k and born in the 80's it had the lowest fees at the time. Above 50k fees started to become expensive. I know I am not answering your question about switching to cash but have you considered an industry fund? Perhaps given your age just move to a balanced fund or what ever allocation you choose. This might give you better options in the future. Just a thought....
     
  4. Scott No Mates

    Scott No Mates Well-Known Member

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    Changing fund mix at this time in the cycle will lock in any losses in value (correction) that the fund has experienced over the last month or two and miss out on any recovery. As you are quite young, you will experience several more corrections before you approach retirement age.

    If you put future contributions into a lower risk option, then this portion will attract the return attributed to that investment option eg low risk.
     
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  5. robbie_p

    robbie_p Well-Known Member

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    I currently have a balance of about $100k (been contributing for about 10 years).

    So instead of locking in losses, if i believe we in for a bumpy ride fore the foreseeable future, would to make sense put my future contributions to low risk cash?
     
  6. Islay

    Islay Well-Known Member

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    Given your age, moving to cash will lock in losses going forward. Again, given your age and balance have a look at the fees. Now might be a good time to move to a fund where you will pick up better growth and lower fees in the future. Not Advice.
     
    Last edited by a moderator: 31st Mar, 2020
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  7. robbie_p

    robbie_p Well-Known Member

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    Thanks! Any supers i should consider? Iv been working with my company for almost 10 years and have just been using the super they set me up with.
     
  8. SatayKing

    SatayKing Well-Known Member

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    First of chill.

    Then go have a cold shower.

    Then take a Bex and have a good lie down.

    Then after that have a coffee or brew of your choice but not alcohol.

    Then think "Am I worried about what may happen over six months or 40 years?"

    Then decide what you wish to do.

    Then, once it is done, walk, don't look back and have no regrets. The last bit is important as you will be fully responsible for the result. No one else will care.

    Not financial advice of course but a pretty easy process to go through.
     
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  9. Scott No Mates

    Scott No Mates Well-Known Member

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    Changing companies for existing super will lock in losses. For your future contributions have a look at some of the industry funds who Host+, cbus, Sunsuper or one associated with your industry.
     
  10. tedjamvor

    tedjamvor Well-Known Member

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    Switching at the bottom of the market just locks in the losses.

    Shares are more volatile than cash, the average is ~4 to 5% net of CPI. That's not a guaranteed yearly rate. Some years it's -10% and others it's +25%. If you couldn't time the drop, you can't time the rise....
     
  11. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    Markets have fallen and whether its the bottom remains to be seen. The USA have real problems and may yet lead further falls. In time markets will rise and it may happen quickly. The growth will be more than the 1% or less cash mayve give as a return
     
  12. Erica

    Erica Well-Known Member

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    I freaked out when my super dropped 10% a couple of months ago and switched the lot into cash, and now I'm in that exact dilema the above posters brought up, when the heck do I get back in to growth units and not miss out on the gains. Was the bottom one month ago at -30%??? It's now back up +10% is it going to keep going up or is this a bull trap, and it's going to retest the low??? It's doing my head in and I'm 40. I think in your 30's set and forget is probably better for the mental health. Unless you have done the training to be a qualified financial adviser.... but then of course you'd likely set up a self managed super fund...
     
    Last edited by a moderator: 17th Apr, 2020