What type of investment portfolio should I choose if my fund offers me a choice?
You or your employer make contributions to your retirement savings every month.
Why save in a retirement fund?
The purpose of saving in a retirement fund is so that you have enough money to live on when you retire from your employer one day.
Your retirement savings at Alexforbes are made up of:
You can use your retirement savings to buy a pension that gives you a regular income when you retire from your employer. The pension you get is affected by the amount of retirement savings you have and the cost of buying a pension.
What is investment performance?
The percentage increase or decrease in the value of investments over different time periods.
How investments affect retirement savings
Investments are an important part of any retirement fund. The value of investments in your retirement fund’s portfolios affects the amount of retirement savings you will have available to buy a pension when you retire. We expect the value of investments that retirement savings are invested in, to increase over longer periods of time although they can decrease in value over shorter time periods. This is the reason why it’s important to focus on longer time periods like 5 to 10 years when you look at your retirement savings.
Who decides what investments a retirement fund should have?
It’s important for each retirement fund to have a well-thought-out investment plan so that your retirement savings can grow over time. The trustees of your fund create an investment plan with the help of professional advisers. The trustees may choose to offer a range of investment portfolios so that the members of the retirement fund have some options to choose from. In most cases, there will be a default option that is suitable for most people.
If, like most people, you aren’t an investment expert, there are two very important ways to make sure you have enough money to live on one day:
- Keep your retirement savings invested when you change jobs
Watch this video to find out more. Small amounts can grow into large amounts over a long period.
- Save as much as you can
Watch this video to find out more.
You can find out more about the different types of investments and learn about investment risks here.