The importance of strong returns for retirees

When it comes to money, what’s most important to us changes over time. When we’re younger, and starting a family, perhaps taking out a mortgage, life insurance is the most important thing. When we get to midlife, super contributions become more important, loading money into super and taking advantage of the mathematics of compound interest.

But when we come to retirement, investment returns become most important. That’s because the period around retirement is when our super balances are at their highest. It’s what finance nerds call the ‘portfolio size effect’.