Is it better to add to your super or start a sharemarket portfolio?

Balancing tightrope

Do your belts up a little tighter readers, or I might just shock the pants off you.

Gen Xers need to do both. Shock! Horror!

Neither is hands-down better than the other. They’re different. At our age, from our late 30s and 40s, we need to build our investments in both vehicles.

While Xers can’t put everything into super, we must start putting extra into super. Previous generations had different rules. Boomers and retirees could literally shovel money into super post-50, when home and child expenses were paid down. Up to $100,000 a year.

Xers will be restricted to $30,000 a year (indexed), which includes the employer superannuation guarantee.

So, we need to contribute extra to super earlier, from roughly our late 30s. Even if it’s $3000 or $5000 a year. You’ll save tax immediately, and it then earns in a low-tax environment until you’ve retired.

But super is locked away until we’re at least 60, so Xers need to invest outside of super also, to retain access to funds.

Here we should concentrate efforts on shares and property. (We also need to maintain pure cash as well, best kept in an offset/redraw account, if you have a mortgage.)

If it’s shares, and doing your own research isn’t your thing, keep it simple. Set up monthly contributions to something like an index fund.

If you believe you could invest with gearing (investment property or a margin loan, for example), get professional advice. Xers still have enough time on their hands to make long-term gearing strategies work.

But the answer is definitely both. Get started now.

Bruce Brammall is the principal adviser with Bruce Brammall Financial ( and author of Mortgages Made Easy.


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