Should I be worried?
Take a long-term view for superannuation, if possible. Periods of negative returns do occur from time to time. The past year, however, has been an extreme and largely unprecedented period due to the near collapse in global financial markets, which led to a period of negative returns from equities and property investments, as explained in this update. Below provide general investment guidance, with a view to the time you may have until retirement, or if you currently receive a VicSuper Pension.
I'm not retiring soon
With time on your side, staying the course is likely to be the best approach. The alternative - changing your investment selection to an option or mix of options with a lower exposure to equities - will mean missing the benefits of a potential global economic recovery. For example, members who changed to VicSuper's Cash option before March 2009 may have missed the recent rebound on global sharemarkets, depending on when the change was made.
What you may not have considered is making additional contributions to your VicSuper account. The short-term investment environment may be uncertain, but like some people, you may now have more disposable income thanks to lower interest rates. Saving a little extra for your future may therefore be a good move.
I'm thinking about retirement
Sharemarket volatility may be particularly unsettling for those planning to retire sometime in the next few years. If your super balance has fallen in value, strategies which can help to rebuild your balance and secure your future income include:
- delaying retirement for 12 months or more, if possible, and
- maintaining, or even increasing, the level of voluntary contributions.
Above all, book a personal super advice appointment with a VicSuper adviser if you require expert advice. VicSuper's advice service is offered without obligation as part of your membership. It therefore involves no additional cost. To book an appointment, call VicSuper's Member Centre on toll free 1300 366 216.
I'm a VicSuper Pension member
When global sharemarkets fall significantly, it's hard not to think about the security and longevity of your superannuation pension. If you have switched out of an investment option, or mix of options, which reflected your risk profile, VicSuper cannot provide guidance on the right time to switch back.
Nobody can predict future investment performance with any certainty, which means that market timing is difficult, if not impossible, especially for a long-term investment such as superannuation. Of course, a VicSuper superannuation adviser can discuss your investment timeframe and income needs, and reconfirm your risk/return profile, if you wish. This may be beneficial if uncertain about your investment option selection.