It's difficult for the average retail investor to get this balance right. Which is why it makes sense to invest in a managed fund run by professional managers who can do this for you. Given they typically manage millions or even billions of dollars in assets for their investors, fund managers are also able to properly diversify the assets in a portfolio, which also helps investors to ride out market cycles.
"Everybody loves a sale. But when the market falls, the risk for retail investors is selling assets when prices are down. Life's distractions also get in the way. People in their thirties and forties have so many financial responsibilities in addition to building wealth – paying the mortgage is a big one. There's often not a lot left over to salary sacrifice or make voluntary contributions to superannuation," Owen says.
But the risk is you won't be able to live the life you want if you wait until after the mortgage has been repaid and kids have left home to contribute a little extra to your super fund. You also won't benefit as much from the power of compounding if you wait until down the track to add some extra funds to your retirement savings account. Which is why it can be very powerful to contribute some extra money to your super in your twenties before life's responsibilities get in the way.
"Even adding $50 a week or $100 a month while you are young can really help to boost your retirement savings down the track," he adds.
The right path for you, however, will depend on how long you have until retirement, your salary and lifestyle aspirations in retirement. Which is why it's a great idea to ensure you seek professional financial advice. That will help to build your super and have the lifestyle you want down the track.