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Customising your super strategy

Adjusting your super fund strategy so you can have a more active role in managing your retirement savings can often result in a number of rewards and benefits.

However, it is important for those who opt to take more control of their super fund’s asset allocation to consider aspects in the long-term, rather than react to any short-term financial changes.

The typical investment strategy options for super accounts are cash, conservative, balanced, growth and high growth. Most default funds combine members who are still saving for retirement into the same balanced option. But while conservative and growth assets tend to deliver the best long-terms returns for most members, it is worth considering if these investment options suit a member’s personal wants and needs.

Key life events, such as marriage, starting a family, or approaching retirement, are often good opportunities to consider and review superannuation investment strategies.  Fund members should also take into consideration what stage of life they are at when deciding the kind of investment strategy they want their super in.

Changing the level of risk in a super fund can be as easy as selecting a new option online or over the phone. And while most funds don’t charge members for changing their investment strategy option, it is always a good idea to check with your super fund if this is the case. There can also be a slight difference in investment fees between strategies. While higher growth and more active strategies can be more expensive, these costs can become inconsequential when compared to the value of being in the right strategy.

Posted on 27 August '15 by , under Super.

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Transition to retirement

The transition to retirement (TTR) strategy allows you to access some of your super while you continue to work.

You are able to use the TTR strategy if you are aged 55 to 60. You can use it to supplement your income if you reduce your work hours or boost your super and save on tax while you keep working full time.

  • Starting a TTR pension: To start your TTR pension, transfer some of your super to an account-based pension. You have to keep some money in your super account so that you can continue to receive your employer's compulsory contributions as well as any voluntary contributions you may be making.
  • Government benefits and TTR: The benefits you or your partner receive might be impacted if you choose to opt for this strategy. How and what exactly will change might become clearer upon discussing this with a Financial Information Service (FIS) officer.
  • Life insurance and TTR: In some cases, the life insurance cover you have with your super may stop or reduce if you start a TTR pension – check this before making any decisions or changes.

TTR can help ease your mind as you transition into retirement but it can be a bit complex. Before you choose whether you want to use TTR to reduce work hours or save on tax, or even if you want to use TTR altogether, you should figure out how this will impact all aspects of your finances.

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