Money Magazine Australia - - SUPER -

Crit­i­cally, as the mem­ber’s over­all as­sets fell in this sce­nario, the part age pen­sion grew. The buck­et­ing solution ver­sus 100% cash meant the mem­ber’s age pen­sion in­creased by more than 50% in the first year.

While the draw­downs from su­per were $4500 lower, the mem­bers made up the short­fall, thanks to means test­ing of the age pen­sion (see ta­ble).

“Ef­fec­tively, the age pen­sion be­comes a put op­tion on any down­turn in mar­ket prices. It also means the mem­ber’s cash bucket lasts longer, al­low­ing a higher chance of re­cov­ery with­out eat­ing into cap­i­tal,” says Rice Warner.

“Given as­set al­lo­ca­tion is the No. 1 driver of net re­turns to mem­bers, tak­ing small and sim­ple steps such as the ex­am­ple above has the po­ten­tial to pro­tect re­tirees and de­liver a great out­come.” Vita Palestrant was the edi­tor of the Money sec­tion of The Syd­ney Morn­ing Herald and The Age and has won sev­eral pres­ti­gious jour­nal­ism awards here and over­seas.

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