When it comes to retirement planning, there are a lot of terms and concepts that can be confusing. In this series, we’ll help demystify some of the key terms you need to know.
MySuper: MySuper is an Australian government initiative that aims to provide Australians with a simple and low-cost way to invest their super. It’s often offered by your employer as the default investment option for your superannuation contributions.
Preservation age: This is the age at which you can start accessing your superannuation. This is typically between the ages of 55 and 60. Your preservation age will impact when you can start drawing down on your superannuation. Also, how long you have to reach your preservation age can infuence how much risk you should be taking with your investment strategy. Generally speaking, the younger you are, the more time you have to recover from any market ups and downs. This means you can afford to take on more risk in your investments, in exchange for the potential of higher returns.
Retail fund: A retail fund is a type of superannuation fund that is run by a financial institution, such as a bank or an insurance company. These types of funds typically have higher fees than industry funds, but may offer more flexibility in terms of investment options.
Risk and investment returns: Generally speaking, the higher the potential return on your investment, the higher the associated risk. That means that if you’re looking for higher returns, you need to be prepared to accept more risk. Remember, when it comes to risk and investment returns, there is no one-size-fits-all approach. What’s right for you will depend on your individual circumstances. But by understanding the basics, you can make informed decisions about how to best safeguard your financial future.
Further Reading
https://moneysmart.gov.au/glossary
What Next?
Don’t be intimidated by the financial jargon. Taking the time to understand the jargon along with using the eairwoman app will give you greater insight into your overall financial health, and ultimately help you achieve your retirement goals.
