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Investing for retirement

It’s important to balance the right amount of investment risks to achieve the right kinds of investment outcomes. At StatePlus we understand the financial needs of pre-retirees and retirees, which means that we manage money differently.

Balancing income certainty with returns

Our experience tells us that retirees have a greater need for certainty and security. As stewards of our clients’ retirement savings we invest in a way that’s highly aligned to these needs.

Investing in an appropriately cautious way needs to be balanced against the need to take some modest investment risk. This is because you should not be too conservative with your investments, otherwise inflation will erode the value of your retirement savings. And over time, this means you could run out of money prematurely. So it’s important to balance the right amount of investment risks to achieve the right kinds of investment outcomes.

Timing matters

If you’re retired and drawing down on your portfolio to fund your retirement, you’re highly vulnerable to a sharp and significant capital loss from a market correction. During market volatility, moderating the size of a capital drawdown, and the time to recover losses, will deliver a better portfolio outcome for someone who’s drawing from this portfolio. This is called sequencing risk.

What this means is that the ‘pattern’ of returns received by the investor has a crucial effect on the long-term outcome. Managing this risk and other types of risk is at the centre of our investment approach.

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This information is of a general nature only, is not comprehensive, and is not specific to your personal circumstances or needs. It is published for your interest. Before making any decisions based on this information you should consider its appropriateness to you. Every effort has been made to ensure the information contained in it is accurate. We strongly recommend that you consult a Financial Planner before taking action based on this information.

State Super Financial Services Australia Limited, trading as StatePlus, is the holder of Australian Financial Services Licence 238430. Neither the SAS Trustee Corporation nor the New South Wales Government takes any responsibility for this information or the services offered by StatePlus, nor do they or StatePlus guarantee the performance of any product or service provided by StatePlus.


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