ASSET ALLOCATION THROUGH THE AGES

What’s the ideal investment option for different age groups? You need look no further than default lifestage or lifecycle products to get an idea.

Rainmaker’s Alex Dunnin says the list below gives a good indication. However, there is a lot of variation in the marketplace:

He says some products are overly conservative. “At retirement age, they have almost no money in equities.

20s – 90% in growth assets (all equities) 30s – 90% in growth assets (all equities) 40s – 85% in growth assets (75% equities, 10% property) 50s – 70% in growth assets (50% equities, 20% property) 60s – 50% in growth assets (30% equities, 20% property)

That’s really conservative – you’re assuming I’m going to die next year. Others take the view you’ve got another 20 to 30 years left and still need growth assets.

“The broad rule is that when you are young you should put as much money as you dare into equities. You can dial it down a bit as you get older.”

Ultimately, it comes down to your personal circumstances, goals or lifestyle aspirations and risk tolerance says WLM Financial’s Laura Menschik. “Which investment option is best for you? Perhaps they should see a good financial adviser.”

The accompanying list from SuperRatings gives a good snapshot of how the different assets are allocated over the different age groups.