14 October 2025
For those first starting off or have a long way to go before reaching retirement age, i.e. ‘accumulators’, your retirement goals are probably the same, i.e. to maximise your investments in super so when the time comes, you can afford to retire comfortably. If this is the case, then rather than adopting a ‘Balanced’ or safer path, give serious thought to simply applying the highest ‘Risk Profile’ possible to maximise your earnings potential. This is because you will have plenty of time to ride-out any potential market downturns and a lot of this work will be done for you through the power of investing and compounding.
Note: we are not discussing where to invest and only referring to ‘Risk Profile’ at this stage, the reason is because risk profile generally determines what asset classes goes into your mix and the ratio of growth to defensive investments, which then points towards where and how you should invest i.e. your ‘investment strategy’. With investment strategy, there are multiple ways to get to the same destination and this topic is best reserved for a separate article.
For those who are nearing retirement and may have a shorter timeframe before drawing on their super, consider adopting the highest risk profile possible within your risk tolerance. Take into account that you will be invested throughout your retirement years as well. Get personalised advice on where you fit on the risk scale as each person’s risk tolerance is different and it depends on a range of factors including concerns about losing money, whether their current super balances could end up meeting their retirement income target or the dependency on investment returns to improve their chances of their money lasting in retirement.
Going back to those accumulators, history has shown that despite the events which cause market shocks, i.e. volatility, those investments which produce the most are your International and Australian shares over other asset classes. Looking back in history, markets have shown to rise over time and after setbacks such as the Global Financial Crisis, Covid, or more recently US Tariff Wars – that given time, these losses are recovered reverting back to that general upwards slope.
Once your risk profile and investment strategy is chosen, aim to block out the noise and market commentary as the media tends to focus on the bad news rather than the good. Accumulators should instead, focus on adding more to super through each pay as every dollar of contribution counts. Overtime, you will soon see your contributions, investment earnings adding up and compounding over time.
The earlier you start, the greater the compounding. In-fact, those who had been successful and are now enjoying a very comfortable retirement had a lot of things in common, i.e. they were disciplined throughout their working lives, had controlled their spending, budgeted for their contributions and had committed to contributing regularly and had looked towards the bigger picture.
Disclaimer: Information presented is general in nature and hasn’t taken into account your personal circumstances. You should consider whether the strategies and investments are suitable for you by seeking personal advice from a licensed financial advisor. We do not accept any liability for any resulting loss or damage of the reader or any other person. Past performance is not a reliable guide to future returns.
