Investing to suit Kim's stage in life

At 57 years old, Kim's starting to think more seriously about what retirement might look like. Kim's super balance has been building steadily for years — even through various market ups and downs. But now, the time to start relying on that balance is drawing nearer.

Luckily, with MySuper Lifecycle, the trickier thinking around how to invest in the lead-up to retirement has already been done. That's because MySuper Lifecycle investments incrementally change once a member reaches age 56 — gradually decreasing the percentage of higher-risk assets, while slowly increasing the percentage of less risky, income assets.

Managing Kim's balance

When Kim reached age 56, we began the process of making a series of yearly adjustments. Gradually transitioning Kim's investments away from the High Growth option into the Growth option, and then into the Balanced Growth option.

For members like Kim, it means the best of both worlds. On one hand, Kim will continue to invest in assets that help maximise the potential for growing her savings. But over the next few years, the introduction of less risky income assets will help shield those savings from the impact of short-term dips in the market. At Kim's retirement, Kim will be 100% invested in the Balanced Growth investment option.

This lower-risk option incorporates risk management strategies that aim to mitigate the impact of large market falls to help sustain the savings Kim has worked hard to build. Now at age 57, Kim's savings are invested in 60% High Growth and 40% Growth, which automatically changed on her birthday.

For more information on Kim's projected benefit and investment allocation,
download this flyer.

  • Kim's expected retirement balance*
New MySuper Lifecycle $241,000
Current MySuper Lifecycle $236,000
  • $230,000
  • $235,000
  • $240,000
  • $245,000

Our new MySuper Lifecycle approach is expected to add $5k to Kim's retirement balance. But no one can reliably predict how markets will perform in the future, so the final benefit could be substantially greater. Kim could potentially end up with an extra $9k at retirement if market conditions are favourable. Even if adverse markets were experienced just before retirement, our research indicates that Kim's super balance would still remain about the level it would have been under the current MySuper Lifecycle investment approach.

* These superannuation projections are estimates and not guaranteed, based on key characteristics of our typical (average) 57 year old member. This includes median starting balance and average contributions and insurance arrangements at each age through to retirement at age 67 Investment returns after all tax and fees equal to the CPI + investment objective of the relevant Aware Super investment options as at 2 February 2021, assuming CPI = 2.5%. Results are based on today's dollar deflated using wage inflation (AWOTE) of 3% p.a. The upside and downside scenarios are constructed from internal projections that simulate possible future paths of returns, and reflects the top one third of possible outcomes and worst 10% of possible outcomes, respectively.

Find out more about how
MySuper Lifecycle works for:

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