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.