Changing your superannuation asset allocation

It is important to change your superannuation asset allocation depending on your age!

The asset allocation of your superannuation over your lifetime can have a significant impact on the ability of your portfolio to provide and meet your needs during retirement. When we talk about asset allocation, all assets are divided into two broad categories; Growth and Defensive. ‘Growth’ assets include investments such as Australian equities, International equities & property whereas ‘Defensive’ assets include cash, bonds, fixed interest securities or alternative income.

Early life to late-40’s (working life)

This period is the time where an individual should be looking at having a high growth allocation (80%+). The main reasoning behind this is that you will have the ability to ride out short term market volatility or corrections with the view of greater longer term gains.

Early 50’s to pre-retirement (looking towards retirement)

During their early 50’s most individuals start considering the potential for retirement or, at the very least, what strategies they need to be considering in order for their asset base to provide for a comfortable retirement. During this time, while it is still important to have a significant growth exposure to keep your portfolio balance growing, it is also a period where you need to start considering to wind back your exposure to growth assets. The main reason for this is if there is a significant market downturn, your superannuation might not have the ability to recover before you need to start relying on it to fund your living expenses. It is therefore prudent, depending on your risk tolerance, to aim for a growth asset exposure of 60%-80%.


Once you reach retirement, two of the most important factors are the longevity of your balance and the need for your balance to generate income to support your living expenses. During this time, ideally you would like to reap the benefits of the past 40 years of growth orientated investing and be able to wind your exposure to growth assets back to between 40%-70%. The increased exposure to defensive assets should lead to increased income generation which will help support your living expenses.

Although the above can be used as a general guide, there are a wide variety of variables that can have an impact on the right asset allocation for your situation. It is extremely important to consider your own ‘risk profile’, this can be a discussion with a financial adviser or simply a questionnaire that enables you to have a better understanding of your risk tolerance levels. It is always prudent to consult a financial professional who will be able to assist you in determining the right investment strategy for you.

If you’d like to discuss you current situation or any points in this article further, please contact one of our Financial Specialists today. Alternatively, you can complete your details below and we’ll be in touch or give us a call on (03) 9835 8200.


The information provided in this blog is general in nature. It has been prepared without taking into account any person’s individual objectives, financial situation or needs.

Before acting on any information in this blog, you should consider its appropriateness to you, having regard to your objectives, financial situation and needs or seek professional advice from a financial advisor.

Accru are not recommending any investment or product, the investments mentioned are examples only. Please seek professional advice or do you own research for an appropriate investment.  

About the Author
Matthew Bushell , Melbourne
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