Should I Convert Superannuation to Cash? (Early 30's OP)

ZackyD on 17/06/2022 - 14:41

Hi All,

Just seeing what the general opinions are about converting their super investment portfolio to cash due to the crashing market.
I'm in my early 30's and have approx $75k in super.

In the early days of COVID some friends recommended I convert to cash but I didn't and actually grew my balance due to the rather strong bouneback but I'm thinking our global situation right now is much more worse off.

Should I set and forget or consider converting? I've noticed my balance drop down by about $5K

Thanks

Financial Superannuation

Comments

    • KangaDrew on 17/06/2022 - 15:55
      +6

      With your average of 13.7 comments per day, just once it would be great to see something that could be considered useful and worthy of a +ve.

      But… yeah, nah.

      • rektrading on 17/06/2022 - 15:56
        -5

        . #BTFD should be on the front page.

        • KangaDrew on 17/06/2022 - 15:57

          This isn't r/AusFinance

          • rektrading on 17/06/2022 - 16:04
            -3

            @KangaDrew: Yes, you're right.

            It's OZB. OP is getting a targeted -7.0% discount on quality assets.

  • WoodYouLikeSomeCash on 17/06/2022 - 14:42
    +17

    It’ll come back up by the time you retire. It’s normal for it to go up and down over time.

    • ZackyD on 17/06/2022 - 14:46
      +1

      Thanks mate! I was worried I'd lose a lot as I honestly didn't know much about Superannuation and investing till recently.
      I guess there is a lot of fear mongering on the news and people saying this could be a global financial crisis like 2008 that scared me.

      • onetwothreefour on 17/06/2022 - 15:10
        +6

        I was worried I'd lose a lot as

        You only lose it when you sell it/cash it in. Don't check it for the next few years and you won't worry so much.

        • BewareOfThe Dog on 17/06/2022 - 15:33
          +7

          Make some extra payments if possible.

          • apsilon on 17/06/2022 - 16:11
            +2

            @BewareOfThe Dog: Absolutely. There are some real tax benefits to it via salary sacrifice for example and even if it's a small amount per month that you won't notice not having in your pocket, it'll add up over the next 30 years.

      • Caped Baldy on 17/06/2022 - 15:25
        +4

        Time in the market is better than timing the market for the majority of people.

      • freefall101 on 17/06/2022 - 16:01
        +4

        It won't be like 2008. In 2008 it completely bombed because we saw multiple banks collapse globally in the space of a months. Banks form the backbone of our financial system so when they start tanking it causes a real panic.

        The current drop is because of inflation and supply issues is bad, but not end of the world bad. The markets now have more risk, are companies going to keep making money or not? It becomes a lot harder to tell when inflation is high, it causes spikes and dips in pricing, wages, etc that makes profitability harder to tell. Because interest rates are rising it means bond returns are rising, which makes them far more attractive, so people move money there.

        Converting to cash means your portfolio has zero chance of getting capital increases, but it also means zero chance of dividends too. Imagine though if inflation settled down and we saw bumper dividends next season because of the massive price rises - you'd miss out on that entirely if you converted to cash. And you wouldn't know it until it's too late. Best advice with super, unless you're very close to retirement age, is always sit tight.

    • fossilfuel on 17/06/2022 - 17:10
      +1

      Exactly this. I was thinking about converting my super to something safer when COVID first happened but so glad that I stuck with an indexed option and it grew like 30% in a year or two.

      Value will go up and down. It would be a good to throw more into super now since the value has fallen if you can afford to salary sacrifice a bit.

  • rektrading on 17/06/2022 - 14:44

    have approx $75k in super.
    I've noticed my balance drop down by about $5K

    Are people really 😱 of a -7.0% drawdown?

    • ZackyD on 17/06/2022 - 14:46

      Hahaha! I guess relatively un-informed people like me.

      • rektrading on 17/06/2022 - 14:54

        It's a drawdown that should be seen as an opportunity to buy the same quality assets at a -7.0% discount.

      • rektrading on 17/06/2022 - 14:57
        +1

        “The stock market is the only place that goes on sale and everyone’s sad”

        @cvpayne @FoxBusiness https://t.co/qdJJtEgkzd

        . #BTFD

    • Halc on 17/06/2022 - 15:11
      +2

      cel and lunac holders thinks that's cute

  • cashless on 17/06/2022 - 14:49
    +5

    Having cash in Super, especially at your age, is completely pointless.
    You might as well stick it in the bank or under the bed.
    How will you cash grow?
    Right now you should be thinking of maxxing out your annual concessional contributions to take advantage of low priced investment funds. In other words, buy more non-cash assets within your Super

  • Drakesy on 17/06/2022 - 14:50
    +3

    Nope, i'd say you're too young.
    Would leave it as is/balanced.

    Cash is for when you hit 60 and want to lock in gains.

  • AndyC1 on 17/06/2022 - 15:07
    +2

    A more sensible question than converting to cash is:
    Is the company looking after my superannuation getting good net returns compared to other companies? Some suck and in the long run will cost you way more than any stock market ups and downs.

    • ZackyD on 17/06/2022 - 15:11

      I know funds are meant to let their clients know in writting if they are deemed to be underperforming.
      Is there a list of high performing ones or do they vary based on your industry/circumstances?

      • AndyC1 on 17/06/2022 - 15:32
        +1

        You would have to use google to find the list yourself.

  • Halc on 17/06/2022 - 15:10
    +3

    why are you worried about sub -10% drop when your investment horizon is >30 years?
    it's a bit late anyway all you achieve by selling now is to lock in losses
    if you want to swing trade play with deposits not super

  • Donaldhump on 17/06/2022 - 15:22
    +2

    rofl,
    ignore it, ive lost your entire balance not once, not twice, but now three times over last 15 years, im 15 years off retiting so i don't care, ill buy more, and more and more

  • WreckTangle on 17/06/2022 - 15:25
    +3

    You can’t retire for 30 years. Why would you cash it out?

    • rektrading on 17/06/2022 - 15:31
      +4

      The 💵 belongs to the fund.

      OP can't cash out now even if they wanted to.

      • hotdog85 on 17/06/2022 - 15:37
        +7

        I think he means change the investment to 100% cash rather than shares, property or whatever.

        • ZackyD on 17/06/2022 - 15:43

          Thanks mate, That's what I meant

    • zwolf on 18/06/2022 - 12:02

      That's why I cashed mine out.
      (Aaand it's gone) - but I don't intend on hanging around that long either ¯_(ツ)_/¯

  • netjock on 17/06/2022 - 15:27
    +2

    Time in the market, not timing the market.

    I'd be more concerned about keeping our jobs. Long as you have job money is flowing into your super and dollar cost averaging.

    There is no way you can pick top or bottom of the market. Sit back relax and enjoy life.

    CNN Money’s helpful millionaire calculator to estimate when you’ll become a millionaire if you’re able to contribute $1,000 to an investment account each month, assuming that you’re starting from scratch with zero savings.

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  • KaTst3R on 17/06/2022 - 15:34
    +1

    Most people are unsuccessful at timing the market.

  • Ocker on 17/06/2022 - 16:50
    +3

    Too late to get out and into cash, you will simply lock in your losses

  • Jugganautx on 17/06/2022 - 17:24

    Count yourself lucky OP

    I'm down 4.3k on 35k super.

    …….

  • TheMindsetTraveller on 17/06/2022 - 18:25

    Since July 1 2021, I put in close to $25k into super … yet my balance as of today is only $17k more than 12 months ago - so kind of lost $8k at least but hopefully give it a few more years (or a decade or two) and these figures should go up.

    • Dejaar on 18/06/2022 - 18:06
      +4

      But u still have the 'units' which will bounce up when each unit is worth more.

  • AustriaBargain on 17/06/2022 - 18:33
    +1

    If you plan on living well into old age and you don't stand to inherit a great deal of money before then, you should probably leave it. You're still young so short term marker disruptions won't matter in the long term. "The economy" is too big to fail.

  • Cohey on 18/06/2022 - 08:03
    +3

    You are now getting cheaper units!

  • saltypete on 18/06/2022 - 08:43
    +1

    Better option is to review your super fund for fees and performance.
    Fees will make a big difference for you in coming years.
    If the super fund is giving generally decent returns they will be very active in managing situations as they arise.
    Make a note in your calendar for 2-3 years time with your current index and balance.

  • Dejaar on 18/06/2022 - 18:04
    +2

    While your money is in the super system you haven't actually lost anything. Once the move it you crystallise the loss and make it real. Just leave it where it is. You have another 30yrs to go. Just chill.

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