(03) 9020 2905Sure, super’s recent performance has been as exciting as Scott Baio’s career since Charles In Charge. But “super” itself isn’t to blame. It’s just a low-tax vehicle, not an investment.
For Gen Xers, this question has two prongs. Firstly, what do you do with “unavoidable super”? Secondly, should you contribute extra?
Unavoidable super is the Superannuation Guarantee – what your employer pays into your fund. You can’t touch it until you’re 60.
So try to turn your super into something special by that time. My advice? Do a risk profile test (there’s one available at www.debtman.com.au) and invest your super a little more aggressively, because super is an ultra-long term investment for Xers.
“Balanced” investors should consider going “growth” and “growth” investors should consider investing “high growth”. If you’re “defensive” or worse, check your pulse or your birthdate. You might be dead, or belong to another generation.
Should Xers put extra into super? The Rudd Government’s nobbling of contribution limits will hurt Xers more than other generations. Xers now have a delicate balancing act.
Right now, our greatest needs tend to be paying down the mortgage and/or raising the kids. But Rudd’s new contribution limits mean we won’t be able to shovel our salaries into super, post-50, like previous generations have done. So we will have to start earlier.
And if you’re self employed, don’t ignore super. It’s still worth doing because of the generous tax breaks.
Bruce Brammall is the author of Debt Man Walking (www.debtman.com.au) and a licensed financial adviser.