I’m approaching retirement

How long you’re likely to be invested is always a critical factor in helping to determine which investments are right for you. And it’s just as important as you’re approaching retirement. Your retirement years could last for 20-30 years or more, and in investment terms, that’s still quite a long time horizon.

As you near retirement, your investment objectives may start to shift. In your younger years the main aim of your super was more likely to be accumulation-focussed – save as much as you can and maximise your investment’s potential for growth.

But while growing your investment is generally still important as you approach retirement, it may also be increasingly important to reduce the level of risk in your portfolio to help shield your savings from volatility. That’s because you’ll be relying on your savings to help fund your lifestyle throughout retirement (or supplement any income you receive through the Age Pension).

A typical investment portfolio as you’re nearing retirement and preparing to reduce your working hours may include a combination of:

• growth assets (such as Australian and Overseas shares) to help your super continue to grow, and
• income producing defensive assets (such as fixed interest investments and cash), to help shield your savings from volatility.

As part of your overall retirement preparation, it’s a good idea to take a look at the way your super is invested, and your future goals for your retirement, and assess whether you need to make any changes to your investments.