Should I be investing outside super?

Super is undoubtedly a tax-effective way to build your retirement savings. And if you’re not a confident investor, it can also be reassuring to know that your money is being looked after by expert managers.

So it’s not surprising that people often choose to put most of their available savings into super, over and above their employer’s contributions.

However, there are some good reasons that you might want (or need) to consider investments outside of super.

Access to your funds

The most obvious reason you might want to invest outside super is to have access to your money. Your super only becomes available to you when you reach preservation age or meet other conditions of release, but if you have additional investments, you can choose when to access them.

It’s always a good idea, if you can, to have a financial buffer for unexpected expenses. But in a low interest rate environment, you may not be happy leaving funds in a bank account and could be looking for a way to maximise that money.

Even if you are investing for your retirement, keeping some of that investment outside of super can give you more options. Let’s say, for instance, you want to retire early, at 55, but your preservation age is 60 — you can’t yet access your super, but if you have other investments that may help with that decision.

Contribution limits

There are caps on the amount that you can put into your super, both before and after tax, as well as on your total super balance. If you reach those limits, then your only choice is to invest outside super.

Getting started

Once you’ve made the decision to invest outside super, there’s a lot to explore. If you’re already an experienced investor, you probably know what investments are going to match your investing profile and goals, including your risk appetite.

But if you’re new to investing, or are thinking about a different investment product, it’s important that you know what’s involved, before you make any decisions.

Talking to your financial adviser or an NGS Super Specialist should be your first step.