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What is a risk profile?
Ask your current fund
A risk profile looks at how willing you are to take risks when investing, with the goal of getting higher return. If you get worried about seeing your money go down when the stock market crashes, you could have a lower risk appetite.
Bridges Financial Services Pty Ltd (Bridges) | ABN 60 003 474 977 | ASX Participant | AFSL 240837 | Part of the IOOF group. This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own circumstances or seek advice from a financial planner and seek tax advice from a registered tax agent. Please obtain and consider the PDS before making any decision about whether to acquire a financial product. Information is current at the date of issue and may change.
Different Types of Investing
There are different ways that you can have your super fund invest your money. It all depends on your age and how much risk you like to take.
Cash is said to be the “safe” investment because you don’t lose your money. But as you can see from the information above, it doesn’t make you a lot of money either.
Experts say that when you are younger you can afford to be more risky with your investments because you have a long time to wait for the stock market to recover when it goes down. They also say that when you are getting closer to your retirement age, you should be less risky because you don’t want to lose half your money in the stock market the year that you decide to retire.
However, even if you are young and the stock market makes you nervous, it may be a good idea to invest in something that doesn’t fluctuate as much so you don’t feel stressed watching the stock market on the news all the time.
– but so does the risk
Ask your fund
You can either log in to your fund online or contact them to have your investments changed so they suit you. Chances are that your fund will set a default investment style of “balanced” if you haven’t contacted them in the past.
Other options to plan for your super
You may be able to reduce the amount of tax you pay by making what is called a concessional (tax adavantage) contribution to your super. This is capped at $25,000 per year. If you get a lump sum and want to put more money in your super, you can do what’s called a non-concessional (no tax advantage) contribution. Click the links below to learn more about this from the Australian Tax Office website
If you earn less than $37,500 per year, you may be entitled to a payment from the government of up to $500 per year. Click the link below to learn more about this from the Australian Tax Office website.
If you’re confident with investing, you have the option of managing your own super by creating a Self Managed Super Fund. It doesn’t mean that you can access your super any earlier, it just means that you manage your own investments. Click the link below to learn more about self managed super funds from the Australian Tax Office.