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Financial adviser James Wrigley has urged Aussies not to make very big changes and short-term decisions with their super. (Source: TikTok\/@iamjameswrigley\/Newswire) <\/p>\n Financial adviser James Wrigley has urged Aussies not to make very big changes and short-term decisions with their super. (Source: TikTok\/@iamjameswrigley\/Newswire) <\/p>\n
Australians are being warned not to make any rash decisions about their superannuation<\/a> in response to the tumbling share market. The ASX has fallen sharply<\/a> amid fears of a drawn-out Middle East war, soaring oil prices<\/a> and economic uncertainty.<\/p>\n It\u2019s led some spooked Aussies to question whether they should be switching their superannuation<\/a> to the lower-risk option of cash<\/a>. Financial adviser James Wrigley said this was the \u201cworst decision\u201d people could make if they were feeling nervous.<\/p>\n \u201cPeople feel like they need to do something and it makes them feel good that they\u2019ve done something. But very few people know when the top is and when the bottom is, to sell out at the top and buy in at the bottom,\u201d Wrigley told Yahoo Finance.<\/p>\n \u201cEveryone thinks that they’re a genius and they can do it, but most people don’t. Often that ends up costing them money, because they don’t get back into share markets until they feel comfortable, and usually that’s when it’s back at a higher level than where they sold out in the first place.\u201d<\/p>\n RELATED<\/p>\n Wrigley said people should be investing appropriately for the age and stage of life<\/a> that they are in.<\/p>\n \u201cIf you\u2019re a 60-something-year-old that\u2019s relying on your superannuation to live off, having that in a high growth investment option probably was never a great idea, and it’s particularly not a great idea right now,\u201d he said.<\/p>\n \u201cIf you’re a 60-something-year-old and you’re in a balanced option, or a conservative option, or something like that, that option is already invested in a way to deal with things like this [Iran related volatilit], you don’t need to be switching it all to cash.\u201d<\/p>\n If you\u2019re in your 30s or 40s and still have decades before you can access your super savings<\/a>, Wrigley said a downturn can actually be beneficial.<\/p>\n \u201cAs crazy as it sounds, a big downturn in share markets is actually good news for you because the contributions that are going into your super from your work or if you’re adding your own money in, that money is being invested at lower and lower prices, which in the fullness of time, will eventually turn around and we eventually get back to another all time record high,\u201d he said.<\/p>\n Wrigley said those who were about to retire<\/a> probably don\u2019t actually need to worry either.<\/p>\n Story continues <\/p>\n There is often a lot of focus on your superannuation balance on the day you retire, but your balance will go up and down during your retirement<\/a>.<\/p>\n \u201cSuperannuation is there to fund 30 or 40 years’ worth of your retirement. One thing that you can guarantee is that during those 30 or 40 years of your retirement, there’s going to be some ups and downs that you have to deal with,\u201d Wrigley said.<\/p>\n \u201cSo, just because there’s been a downturn in the year leading up to you retiring, provided you\u2019re not all in on speculative things that have dropped significantly, if you\u2019re just in an ordinary investment option, there\u2019s nothing that anyone needs to do.<\/p>\n \u201cJust let it be and accept that your super balance will go up and down for the 30-plus years of your retirement.\u201d<\/p>\n Analysis released by Aware Super last year revealed how much panicking could end up costing you in the long-term<\/a>.<\/p>\n The super fund found Aussies who stayed invested in high growth super investment options during the GFC in 2008, rather than switching to cash, would have seen their super balance more than double by 2025.<\/p>\n A retiree who stayed in a more conservatively-balanced pension option, rather than switching to cash, would now have $8,500 a year more in retirement income.<\/p>\n Aussies invested in a high growth option who switched to cash during the recent Covid-19 downturn could now be $58,000 worse off for every $100,000 they had in their super.<\/p>\n Aussies in a conservative balanced strategy could have lost $113,000 by switching to cash during the pandemic, Aware Super found.<\/p>\n If you are still feeling worried, Wrigley said it can be worth reaching out to an expert.<\/p>\n \u201cBefore you go and log into your super fund and do something drastic, please talk to someone at the very least,\u201d he said.<\/p>\n \u201cCall your super fund. Most of the super funds have an advisor team [and an] advisor line that you can talk to. They can help you make some more informed decisions based on your individual circumstances.<\/p>\n \u201cPlease talk to someone before you just decide to go and switch everything to cash.\u201d<\/p>\n Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstances before acting on it, and where appropriate, seek professional advice from a finance professional.<\/p>\n Get the latest Yahoo Finance news – follow us on Facebook<\/a>, LinkedIn<\/a> and Instagram<\/a>.<\/p>\n