Choosing an option

The best investment strategy for you will depend on a number of factors. Here are some things to think about before you make a decision.

When are you likely to need your super?

This is one of the critical issues when you decide which option(s) you are going to invest in. As far as possible, you need to take a long-term view. The longer you have to invest, the more time you have to ‘ride out’ the times when returns from higher-risk investments are low or negative. The closer you are to retirement or requiring your super, the more likely you are to prefer a lower-risk, less-volatile option.

Consider the cost of living as well

Inflation (the cost of living) impacts on the buying power of your savings. If your money consistently earns less after tax than the rate of inflation, it won’t stretch as far even though its value is increasing.

Your personal feelings about investing

Your level of risk tolerance will affect your investment choices. Some investors are content to ride out periods of negative returns believing that what goes down must come up. Others would find that situation stressful and prefer to opt for investments that offer lower average returns but with less volatility.

If you have a high tolerance for risk, you are more likely to choose the growth option. If you have a low tolerance for risk, you are likely to favour the conservative option or even the cash option.

Remember, too, your risk tolerance is likely to change over time. That’s why it is a good idea to revisit your investment choices from time to time – say, every five years.

Your personal financial circumstances

Your strategy will also depend on your personal circumstances. For example, your age, when you intend to retire, how much you will need to live on, other investments you may have and the needs of your dependants.

Seek professional advice

The information provided here is a general nature only and is not intended as financial advice. It does not take into account your personal objectives, financial situation or needs. Your manager, HR/payroll representative or superannuation officer can give you information about UniSaver, but they cannot give you financial advice. Before making financial or investment decisions, you may wish to contact an authorised financial advisor.


back to top