If you've been watching the ASX in recent weeks, you might have been wondering if you should put more money in your super. Unless you have a self-managed super fund, chances are you have significant international and Australian share exposure in your retirement account.
So, here are a few things I've been thinking about when it comes to my own super as markets tumble.
Why more money in super can be a good thing
No matter what we tell ourselves, it's hard to put more money into super when markets are crashing. The S&P/ASX 200 Index (INDEXASX: XJO) is down just 5.46% since the start of the year despite all the curfuffle. However, I think this simply represents a good buying opportunity.
When the markets put some of my favourite ASX 200 shares like Origin Energy Ltd (ASX: ORG) or Harvey Norman Holdings Limited (ASX: HVN) up for sale, I consider buying. However, I don't personally think it's wise to simply buy, buy, buy in a downturn. The economic impacts of the coronavirus are yet to be fully understood, which makes valuing companies particularly difficult.
Given its tax-advantaged status, I think it's silly not to put more money into my super. If I get taxed at a marginal rate of 30% versus 15% in my super, that's an instant return on investment. It's even more compelling if you were looking for broad market exposure in your portfolio anyway.
I think a big part of getting past investing anxiety is to reframe how I think of my investments. Given I'm investing for a long-term horizon of 10+ years, I shouldn't worry about day-to-day fluctuations. In my mind, it makes sense to just put more money into super and let the markets work their magic.
Foolish takeaway
Pulling the trigger and investing in a downwards trending market is hard. However, I can put more money into super and ride out the storm knowing I'm funding my future retirement.
