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Superannuants who’ve seen their retirement balances shrink because of the global financial crisis should consider reinvesting in the share market to recoup their lost wealth, an investment adviser says.

HLB Mann Judd wealth management partner Jonathan Philpot said investors in the 40s would have diminished returns when they eventually retire unless they aggressively recoup their wealth.

Mr Philpot said people saving for their retirement had experienced losses equal to a 25 per cent reduction in superannuation investments across the board.

“I think it’s important to realise it doesn’t really matter what your super balance is in five year’s time, it matters what it’s going to be at retirement,” Mr Philpot said.

“Most of your money has to be invested in shares because it’s a long-term investment.”

Mr Philpot’s approach to bolstering retirement wealth includes paying off a mortgage early through extra payments; buying into a tax-effective investment portfolio and topping up superannuation with additional payments.

“Paying off a mortgage eliminates repayments, allowing these funds to instead be invested in growth assets for retirement,” Mr Philpot said.

“It also means that people can go into retirement without debt, and a home that is an asset.

“Most importantly for people in their 40s, a tax-effective investment portfolio that uses a gearing strategy has to be considered to make up for the lost tax advantages of superannuation,” he said.

In May’s federal budget, the government temporarily reduced its co-contribution matching rate for lower income earners who chose to voluntarily deposit extra money to superannuation.

The government reduced its top-up from $1.50 for each dollar contributed to $1 for the three years to June 30, 2012.

For the following two years the benefit is lifted to $1.25 for every dollar invested, before the current co-contribution returns in 2014.

From July 1, tax-deductible super contributions through salary sacrifice were halved to $50,000 a year for those aged 50 or older, and $25,000 for those under 50.

The government also cut its super contribution from $1,500 to $1,000 a year for those on annual incomes of less than $60,000 a year.

The changes are designed to accommodate retirees who were planning a big injection of funds into their superannuation just before retirement.

That limit for post-tax contributions was changed to $150,000 from July 1, 2007, having been raised to as much as $1 million in 2006 by then treasurer Peter Costello.

The budget also contained a recommendation from the government’s review on the tax system that the age when someone can access their super – known as the preservation age – be lifted to 67 years by 2023.