Boxing at Retirement Shadows

Hi Scott,We read your book and loved it. However, we got a little confused near the end when talking about superannuation approaching retirement (which we hope to do in two to three years). My husband and I are each putting away extra super to bring it to 15%. Does the entire 15% need to go in as cash, or just our extra contribution over our employer payments? And will HESTA do this for us?

Mary and Phil

Hi guys,What haunts me is the letters I received back in 2008 from people just like you.They were on the cusp of retirement, and then the Global Financial Crisis pummelled their portfolios.Finance professors call this ‘sequencing risk’. Yet it’s really just bloody common sense: if you’re retiring you should have enough money to ride out a downturn without having to be a forced seller.As Mike Tyson says, “Everyone has a plan, until they get punched in the mouth”.Well, that’s why I believe it’s prudent to build up a cash buffer in the final years before they retire. I like three years of cash (minus any age pension payments). Though I’m conservative.You should call your super fund and ask to speak to one of their financial advisors, who can help you structure your super, so the market doesn’t land a killer blow this close to the final round.

Scott