You look after the small things, CSC looks after you
A comfortable retirement at the time of your choosing is a life goal most of us strive for. Member educator, Scarlett McKone shares her experience as she looks towards this next stage of life.
07 Sep 2021
We all dream of a comfortable retirement, one where we have the freedom to do the things we enjoy without needing to track every penny. While CSC works hard to protect and grow your investments, there are steps you can take to help you retire comfortably, when you’re ready.
Scarlett McKone has been working at CSC for 18 years. Having spent close to three decades in the industry, and having recently reached her preservation age (i.e. the age where she is eligible to access her superannuation), she knows a thing or two about superannuation. She has one hot tip that may seem simple, but can often be neglected – spend 30 minutes when you get your annual statement to pay attention to your super!
“Super is a big asset for most of us. It’s potentially our second biggest financial asset, or even the biggest. It’s not set and forget. It’s a life admin thing. We all hate life admin, but pay attention. You will be happy you did when it comes to retiring,” she said.
“Those who have investment choices, make sure you understand what they are, and make sure you have chosen the option applicable to your life stage.”
| Early in working life | Middle stage of working life | Pre-retirement | Potential retirees | |
|---|---|---|---|---|
| Importance of contributions vs investment returns | Contributions matter more because account balance is smaller | Contributions and investment returns are equally important | Investment returns are very important relative to contributions | Investment returns are very important relative to contributions |
| Objective | Capital growth | Balance between capital growth and preservation | Maintain purchasing power with lower risk | Capital preservation only |
| Risk/return | Income focused, then aggressive | Aggressive to balanced | Balanced to income focused | Income focused or cash |
| Cohort | Under 25s, then 25-34 | 35-49 | 50-64 | 65+ |
“Make sure they suit your life stage and eligibility. Consider talking to a financial professional to ensure you are taking on the most appropriate risk/return option for your retirement plans, time horizon and financial situation.”
Insurance is another important choice that Scarlett says you may want to check. This will ensure you’re not paying for something that doesn’t suit your life circumstances.
“I wanted to go back and see whether or not I still needed [my insurance] in light of the fact I was about to reach this milestone, and therefore would be able to access my super benefits,” she said.
“I believe that being over insured is just as bad as being under insured.”
How can CSC help?
While keeping a close eye on your superannuation and taking stock of your insurance are controllable actions, something that can be less controllable is the timing of your retirement. When the effects of COVID-19 hit in early 2020, retirement balances generally suffered as a result of the deepest and fastest share market crash in history. In just a matter of one year, the Balanced option return changed from -0.9% for the 12 months to 30 June 2020, to +18% for the following 12 months to 30 June 2021[1].
Those who were in a position to delay their retirement until the share market recovered were generally in a much better position. When you retire can make a difference, but life events mean this can’t always happen exactly according to plan.
While you can’t control these outside influences and life events, CSC works hard to help you reach a comfortable retirement, regardless of the market environment at that time . We seek to build resilient investment portfolios using high quality assets so that whenever our customers choose to retire, they are able to do so [2], regardless of whether the markets are strong or weak. When compared with other superannuation funds, we generally suffer fewer or smaller losses when markets are falling, but still capture a large proportion of the gains when markets are rising strongly. This is why our MySuper Balanced option is rated in the top quartile of the SuperRatings survey over long horizons (7 and 10 years) and above median for 3 and 5 years, despite taking less risk than other funds in this category. Our Income- focused and Aggressive options have been consistently in the Top 2 funds for net risk adjusted returns in their peer groups for all time periods[3]
So Scarlett has shared some of her ’to do list’ in preparing for her retirement. You can also be assured that CSC is also diligently looking after your investments by seeking to build diversified resilient investment portfolios, making them less vulnerable to market conditions, all the way up to and beyond retirement. Yours and our actions combined should help you be on the way to that comfortable retirement you deserve.
[1] Past performance
[2] The ability of customers to access their super depends on certain eligibility requirements.
[3] Source: SuperRatings 30 June 2021, risk adjusted returns net of fees.