Your final super balance at retirement depends on many things, one of which is luck in timing. The difference between a great outcome and a disappointing outcome could just be when you were born and when you retired. If markets fall dramatically the day before you retire, this will leave you with a smaller retirement pool. Something we are all trying to avoid.
So, in December 2016 we introduced a new lifecycle investment option!
If you haven’t already heard of lifecycle investment options, now’s the time to find out more.
How can a lifecycle investment option help with your retirement?
A lifecycle product aims to reduce 'downside risk' and increase the minimum amount you can expect in your final super balance. It does this by reducing the risk of capital losses the closer you get to retirement. Let's face it, who wants to have to go back to work to replenish their savings should the unthinkable happen?
Previously, Tasplan's default option was MySuper balanced. A balanced option is a mix of growth assets with some more conservative assets to give the best risk-return trade-off for the average member – and most of the time that works well. The trouble is that most of us aren’t average. Someone who's just starting out in the workforce has vastly different needs to someone hoping to retire in the next 12 months. And investment markets will impact all of us in different ways.
In our Tasplan OnTrack® option your investment strategy shifts in four stages from long-term growth assets when you’re younger to a safer approach as you get older. The four stages are:
Build (up to age 49) - This stage seeks to increase capital growth in your super savings while you have a long enough time to ride out any short-term market volatility.
Sustain (age 50-54) - This stage begins to reduce the impact of capital losses.
Control (age 55-59) - This stage looks to increase capital protection in your super savings as you lead up to retirement age.
Maintain (age 60+) - This stage looks to provide stability in your super savings and provide additional protection as you get close to accessing your super. It has the lowest risk and return volatility of any of the four Tasplan OnTrack stages.
What to think about
Look at your whole financial picture
If you can work longer or have other investments, you may not need to protect your super as much as someone who doesn’t have these back-ups.
A lifecycle product can be a real lifesaver for someone who doesn’t know or think much about their super – but it may not be the ideal choice if your super is thriving under your TLC.
®Registered to Tasplan Pty Ltd 13 009 563 062.
This article contains information or advice that is intended to be general in nature and which was prepared without taking into account your personal objectives, financial situation or needs. Because of that, before acting on any information or advice in this article, please consider whether it is appropriate to your personal circumstances, talk to a financial planner and consider the relevant Member guide, available at www.tasplan.com.au or by calling 1800 005 166, before making a decision about whether to acquire the products.
The trustee of Tasplan Super (ABN 14 602 032 302) is Tasplan Pty Ltd (ABN 13 009 563 062). AFSL 235391.