26 September 2023

ASIC advises retirees to plan years in advance

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With the 2022-23 financial year kicking off, the Australian Securities and Investments Commission (ASIC) is encouraging people not to ‘set and forget’ when planning their retirement.

Chief Operating Officer at ASIC, Warren Day said people should actively engage with their super statements.

“Where you end up in retirement depends a lot on when you start planning and whether you’ve accumulated enough wealth during your working life,” Mr Day said.

“While super is not the only source of retirement savings – the money may also come from investments, government benefits and your home, if you downsize – it is the only significant asset for many Australians,” he said.

“So, it’s important people actively manage their super and check the performance of their fund.”

Mr Day encouraged people to take a long-term view when considering switching from a super fund that was consistently underperforming.

He said super fund returns would most likely be lower this financial year after high returns last year, “you need to consider performance over a number of years to get an accurate picture.”

“Think about how much investment risk you’re comfortable with,” he said.

“A higher growth option will have higher risk and experience more volatile returns over the short term, but it will usually achieve higher returns over the long term.”

In contrast, Mr Day said a conservative option, like cash or bonds, would offer lower risk but lower returns over the long term.

He said people should contact their super fund to discuss their options based on their long-term goals.

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