Superannuation for 27 year old

hello everyone,

It has been a long while since I have posted on here (4 years) and I continue to be an avid investor and saver. I have a question.

I recently made an either good or bad decision with transferring my inheritance $40,000 into my superannuation fund (now total of $52,300). I have put it into the high growth option with a mix of Aussie and international shares, along with some exposure to property trusts.

My question is, have I made a good decision as a 27 year old male? I have about $15,000 saved so far for a house and about to start my career as a town planner since finishing uni.

I have always invested for the long term, have other investments now, and no other debt aside from hecs help.

Will this superannuation investment pay off or have I wasted my money?

Thanks

You are not going to go broke from saving money. I wouldn't be too worried about it now because it is done and you can't change your mind now! Generally speaking, younger holders of super can afford to be more aggressive and growth oriented with their investment choice because it is likely that you are going ride through a few economic cycles before you retire and access the funds. As you get closer to retirement age you might want to shift your investments into something which you perceive to be less volatile in terms of risk of capital value fluctuation through the economic cycle.

Assuming you allocate the funds to balanced or growth oriented investment choices that $52,000 balance will grow into a very valuable nest egg when you get to retirement age. You should expect to see your compounding accumulated balance at least double every ten years at a minimum.

What you do going forward is something you will have to work out for yourself. You might want to save for a deposit on your own home. Assuming that one's residential home remains capital gains tax free into the future, buying a home has been another tax effective way of investing.

You have made a good choice - compounding takes time and starting early will get you out in front early and keep you ahead for ever after.

You have made a bad choice. Super rules will continue to change (adversely)I am sure you will want that money to buy a home at some stage.

You can't change the decision now but the good side is that you won't have to worry about making any additional super contributions till your 60.

Tl9998, welcome back.
Um... probably a bit late to ask for advice since you've already done the deed mate.

You've made a decision, probably the best one based on what you know and want at this time. Being young, going "aggressive" in the super allocation is the right way to go. As Knobby22 pointed out, super rules will change. Wasn't there talk on allowing younger people access to their super to help with first home purchase?

Anyway, you've locked up a fair chunk of change that you can't access plus, you've not frittered is away on booze, toys and fast living. Thinking of the future. Well done you!

I think you have made a good choice. Low tax environment, enforced saving, compounding over 30 years. Just get financially literate and start your own SMSF. Beware of FP's wanting to invest your money.

Knobby22 said:

You have made a bad choice. Super rules will continue to change (adversely)I am sure you will want that money to buy a home at some stage.

You can't change the decision now but the good side is that you won't have to worry about making any additional super contributions till your 60.

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completely agree. great decision to invest your windfall instead of blowing it on instant gratification. bad decision to put it in super. i just don't trust the government (of either party) to not fiddle around with the rules in the future, especially since as we all know they continually have problems balancing the budget (resource boom notwithstanding).

i would have suggested looking into company and trust structures instead, thinking about whether they would fit your current situation, and if there's a chance that they would, speaking to an accountant seeking their recommendation and getting one set up for you.

trusts are much less likely to have the rules fiddled around with in the future, for the simple reason that most of the politicians use them for stashing their assets themselves (not to mention most of their donors would also use them), and they're not going to want to shoot themselves in the foot. sure, they'll make noises from time to time about making the rules "fairer", but in my view that's just to appease the majority of the voting population, who don't use them. it's unlikely they'll actually make any major changes to the general idea of how they work.