Date issued: 18 August 2008

CPA Australia today advised people not to panic about any short term losses in their super investments.

Despite recent financial market volatility, super has enjoyed solid returns over the past few years and it remains an essential and valuable long term investment. The median balanced fund still returned 9.8 per cent pa over the last five years to 30 June 2008.

CPA Australia's superannuation policy adviser, Michael Davison, said, that many people will be understandably nervous when they receive their superannuation statements but warns this should not scare people off from investing more in their superannuation.

'Against the backdrop of domestic and international financial market volatility, it is crucial that people continue to take a long term view of their superannuation investments.'

'Quite simply, people run the risk of lowering their retirement living standards by not acting now.'

'People should not delay in making extra contributions to their superannuation investments based on a short term outlook.'

'The more people can contribute to super now, the better their retirement outlook will be. If they start making extra contributions early, people can significantly boost their retirement income,' Mr Davison said.

Contributing an additional three per cent after tax from age 25 will typically increase your retirement income by a quarter. But if you delay making additional contributions to 35 you will need to contribute up to seven per cent more to get the same retirement benefit. At the age of 45 you need to put in as much as 17 per cent extra.

Modelling conducted for CPA Australia by the National Centre for Social and Economic Modelling (NATSEM) shows the nine per cent compulsory superannuation will only provide an adequate standard of living in retirement under ideal conditions where individuals enjoy 40 years of compulsory superannuation contributions and are in a position to make voluntary savings.

People with broken work patterns or on higher incomes will need to contribute more and the earlier the better.

Michael Davison is available for media interviews.

Further information about superannuation can be found at our website.

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