Treat post-retirement investment differently
Investment in retirement is different and needs to be treated as such, according to former Cooper Review chairman Jeremy Cooper.
Cooper, who is now chairman of retirement incomes at annuities specialist Challenger, said that while superannuation investors may have finally moved beyond the losses incurred during the Global Financial Crisis, the same is unlikely to have occurred for those in retirement.
"Simply put, the maths work differently for people living off their super," Cooper said.
"A four year average of 8.8 per cent per annum after the GFC is great if your money has been locked away, but it's just not enough if you've been using your super for its intended purpose of providing income in retirement."
He added it was highly unlikely that those in retirement and drawing down on their superannuation savings would ever recover from their GFC capital losses.
Cooper denied he was advocating that investors try to time the market, but argued that they might have been better off switching to more defensive or conservative investment options.
"The vulnerability of retirees to volatility is the main reason why investing in retirement is different," he said.
Originally published by SMSF Essentials.
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