Ask Paul: I was just made redundant, what should I do with my super?


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Dear Paul,

I was recently made redundant and because of this my super was moved from a defined benefit to a temporary accumulation cash account for 90 days. I'm 54 and have $547,000 in super.

I have to decide soon if I will leave it in cash, or is it still a good time to switch it to a balanced option, even during this pandemic? Also, I'm thinking of moving to an industry super fund due to lower fees. Do I do it now? - Anna

ask paul clitheroe i was made redundant what should i do with my super

Here, Anna, we either need the wisdom of the gods or a very good crystal ball. Sadly, my crystal ball is pretty opaque and I certainly can't claim divine wisdom. So I'll just have to go with common sense, my own experience and the benefit of hundreds of years of market history.

First up, I have no idea what markets will do in the coming weeks, months or even few years.

We have seen markets being hammered by wars, plague, pestilence and pandemics many times before. A common theme is recovery. So I am not going to bet against hundreds and hundreds of years of history.

The global population continues to grow strongly, in fact, by about 90 million this year.

This leads to demand for goods and services, so at age 65 I am leaving my super money in balanced-type funds.

You are likely to have a decade to retirement and, based on the average, you can expect to live for another 30 years.

You will need to make your own decision about what is right for you, but history shows that in the long term cash is likely to be your worst asset.

I have a life expectancy at least a decade shorter than yours, giving me "less time in the market", but I will continue to hold growth-type assets in a low-cost, well-diversified fund.

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Paul Clitheroe AM is founder and editorial adviser of Money magazine. He is one of Australia's leading financial voices, responsible for bringing financial insight to Australians through personal finance books, the Money TV show, and this publication, which he established in 1999. Paul is the chair of the Australian Government Financial Literacy Board and is chairman of InvestSMART Financial Services. He is the chair of Financial Literacy at Macquarie University where he is also a Professor with the School of Business and Economics. Ask Paul your money question. Unfortunately Paul cannot respond to questions posted in the comments section. View our disclaimer.
domenic zappino
November 29, 2020 7.19pm

should put some in cryptocurrency it is the future of cash and the fastest growing commodity on earth with the highest gains i know its volatile but its just going up,up,up seems no stopping it.