How to manage super in your 50s

By now you’re likely thinking about when you’d like to stop work. And you’re not alone. On average, Australians retire at just over 56 years of age, according to the Australian Bureau of Statistics.

“The crucial question is, how will you fund your life after work? And this is the decade you figure out the answer,” says smartMonday senior smartCoach Johnny Ng.

While the age pension is the main income for most retirees, superannuation is increasingly important. Follow the four smart, easy steps below to make it more so.

The common way to manage super investments in your 50s is to strike a good balance between growing and preserving your balance. This means you’ll likely have to lower expectations for returns (compared to the past). For example, smartMonday drops the allocation to riskier (growth) assets in its MySuper investment option from 76 per cent to 64 per cent for members between 50 and 60.

This may be the right approach for you, or you may want more risk or less. (You can review the risk level of our investment options alongside their returns — but it’s important in this decade to remember past performance might not be repeated in the future.)

“Aside from your investment, you might be able to contribute extra to your super in a variety of ways, making a substantial difference at retirement day,” adds Ng.

Now is the time to figure out when you want to retire and how you would like to do so. Take time out to think that through.

The most essential step in preparing for a fulfilling and secure life after work is to set goals and plan. At this stage the key four questions are:

• When do you want to stop work? (Answering that makes retirement real)

• What lifestyle do you want? What level of spending will it need?

• How much income will you need in your non-working years?

• What financial goals and plans will get you there?

Thinking about when you’d like to retire and the life you’d like to live after work will lead you to the key matter of how much money you will need.

“Once you’ve got some kind of figure in mind you need a plan to get from where you are now to where you want to be. As above, this may include extra contributions, revised investment choices and seeking advice to put it all together,” says Ng.

Answering the questions in the section above is not easy. So we have resources for you to use as a starting point to think about those issues:

• Do you really need $1m to retire?

• Building wealth is all about risk

• How Australians live in retirement

• Calculate your retirement account balance.

But it’s likely nothing will be as helpful as getting expert advice. Your financial adviser should be able to guide you through the matters mentioned in this article. You can also speak with a smartMonday smartCoach – while your fees already pay for their general guidance, you can pay an extra fee for a more personal assessment including external factors such as the age pension.

“Then we come to the smart but easy actions you can take online to make your super more efficient and protective. You may have already completed these, but it’s certainly not too late if you haven't,” says Ng.

To start, get online and review all the features in your personal homepage. Then you’ll want to:

• choose the beneficiary of your super (the only way you can control who will get it is by nominating someone, preferably in a binding nomination)

• review your life, income protection, and total and permanent disability insurances – are they affordable and fit-for-purpose at your stage of life?

• consolidate your accounts if you still have more than one (while you need to consider if this could affect any insurance, it usually makes super much easier to manage and reduces fees).