The latest share market dip could mean trouble for Australians looking to retire soon.
The share market is continuing to suffer, with global stocks falling to a two-year low and Australia’s share market experiencing an extraordinary loss of $56 billion in value. Given that the majority of Australian superannuation funds are invested in shares, this dip could spell trouble for those looking to retire soon.
This latest dive follows increasing concerns about the Chinese economy, and has investors around the world running scared. Additionally, with the Asian stock market tracker, the MSCI index predicting a further loss of 2.9 per cent by September next year, the stakes are only going to get higher – especially for prospective retirees.
So what will this mean for your super? According to independent research provider SuperRatings, by August 2016, the median balanced fund will have fallen by 2.4 per cent. As a result, a person holding a superannuation balance of $200,000 will find a reduction of $4,800.
While the market may correct itself over time, certain steps may need to be taken by people currently looking to access their super. Such steps may include seeking advice from your fund and changing your investment habits to suit your risk profile (e.g. researching your options, increasing your contributions, self-managing your super and reviewing the fees you pay to your fund). More information can be found at theguardian.com.