Market slide cost some super members $3300

The share market slide may have been costly for super but the long term looks good.

Market slide cost some super members $3300

Retirees who hung up their hat this month were up to $3300 poorer due to the stock market slide, SuperRatings said yesterday.

While in the past 12 months, superannuation balances have remained in positive territory, the recent volatility has likely shaved an average of $2000 from Australians’ nest eggs,” SuperRatings Chief Executive Kirby Rappell said.

The funds monitor used the SR50 Balanced (60-76) index to estimate that returns in January were 0.9 per cent higher than in December.

“However, January’s return will have been clawed back during the recent market volatility, with the ASX 200 declining 3.3 per cent from 1 February to 14 February,” SuperRatings said.

“For the typical balanced option account with $100,000, this represents a loss of $2000.”

However, super members with exposure only to Australian shares would have seen $3300 stripped from their balances.

SuperRatings’ SR50 Balanced index showed the past 12 months’ return was still a healthy  11.9 per cent, thanks to 2017’s bull market.

“Over five years, the balanced option return is 9.2 per cent, highlighting the long-term strength of the superannuation system,” SuperRatings said.

Earlier this month, Mr Rappell told YourLifeChoices that superannuation members not planning to retire soon should not panic.

“When there is a market drop, the balance of your superannuation suffers; however, it will only affect your retirement proceeds if you withdraw your funds, and is more of an issue for members nearing retirement,” he said.

“With the median balanced fund generating returns of 9.2 per cent and 5.2 per cent over five and 10 years to the end of 2017 respectively, it is important to keep things in perspective.

“If you do not need to withdraw your funds soon, then there is time to ride out the period of poor performance, allowing your account balance time to recover.”

Have you retired in the past fortnight, and if so, how was your super balance affected? Do you have a balanced, growth or conservative fund? Do you think funds should invest so heavily in shares?

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    COMMENTS

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    sunnyOz
    16th Feb 2018
    10:59am
    You have only lost thousands if you had multi thousands in super. Scaremongering article.
    Jem
    16th Feb 2018
    11:33am
    Does this affect retirees currently drawing on their Super if it’s transferred to a draw down account? Must check mine..
    *Imagine*
    16th Feb 2018
    11:35am
    So you lose 3.3% on the balance of your super account that has averaged 5.2% over the past 10years according to the article. Now if you are on a part pension based on assets you will gain $3 per fortnight pension for every thousand lost from your assets. That is $78 per year, per thousand or 7.8% for the duration with no fees payable. OK, so you lose the asset base. I imagine some part pensioners will have already worked out that it is more economical to have fun spending thousands and get a 7.8% return. Time to dump these stupid means tested pensions, replace them with a universal pension system and pay for it with a simple, enforced, universal income tax system. Too easy.
    Anonymous
    16th Feb 2018
    5:06pm
    That's the common sense policy, Imagine, but the problem with common sense is ''it just ain't common'' - and politicians have NONE.
    Ausdigga
    16th Feb 2018
    8:38pm
    OGR is right you know, and it would be far cheaper to administer. But we dare not upset all shiny bums in the Centerlink back office
    VeryCaringBigBear
    18th Feb 2018
    7:57am
    Part pensioners will only get a benefit if their six monthly review of assets occurs when market falls. As market only fell to same level as in October 2017 I doubt very few if any will benefit.

    These falls are good for markets as it brings in more punters and markets can then go higher.
    Sundays
    16th Feb 2018
    11:38am
    Super fluctuates all the time, the loss on $1000,000 in the balanced option is closer to $1,000 than $2,000. It will bounce back. Only bad news for those taking all their money from Super right now.
    Tib
    16th Feb 2018
    12:15pm
    Minor share market fluctuation. Don't panic.
    arbee
    16th Feb 2018
    12:29pm
    What a stupid comment this one is by WLC, anyone who knows anything at all about super knows that it is long term performance that counts, not daily fluctuations on the share market. Instead of scaremongering why not write your article in a way so those who do not understand how it works will not panic and think all is lost.

    16th Feb 2018
    12:48pm
    Depends on your risk profile
    Mine went down 8 % as I have a high growth high risk portfolio
    Tib
    16th Feb 2018
    1:01pm
    i didn't look but I probably missed an opportunity to make money.
    Anonymous
    16th Feb 2018
    4:01pm
    You have enough you champagne socialist
    You should be a good Marxist give your riches to the welfare bludgers
    Tib
    16th Feb 2018
    8:32pm
    Ha ha over my dead body. But come the revolution watch me hide in the crowd. Lol
    VeryCaringBigBear
    18th Feb 2018
    7:59am
    Maybe just a little risky especially in retirement if you lost 8%.

    Any one buy on the dip?
    Lookfar
    16th Feb 2018
    2:21pm
    Feels wrong to me that retired Australians get so little pension they have to Gamble on the stock exchange, - sure if gambling is your thing, better the stock exchange than the pokies, at least with the stock exchange you have a chance.
    But to run an economy on the vagaries of the stock market totally oriented on profit, - not what the economy and the citizens of Australia need, seems to ensure the proliferation of junk food, cheap and shabby products, unwise environment destroying grab and runs and much of that ilk.
    If the Govt paid enough pension for a reasonable retirement in which ones -
    {rates-maintenance, or rent,}, car expenses, rising energy charges, inflation, etc. were covered, one could then relax and enjoy having some leisure time, possibility of developing artistic or other skills, getting back in touch with family, exploring our amazing planet, etc. and the Govt, only correctly advised by those in the economy at all levels, could just issue the money to companies that needed it, that could advance a good reason.
    Anonymous
    16th Feb 2018
    4:03pm
    Do you want government to provide a nanny to wipe your arse for you as well ?
    Radish
    16th Feb 2018
    5:21pm
    There was a retired couple on ACA last night and they are very happy with their pension and associated perks.

    This couple had a part pension and some super and also the concesson card. They had no complaints at all with what they get.
    Lookfar
    17th Feb 2018
    3:57pm
    Raphael, I can only imagine the horrendous injury you must have sustained, that you now require a nanny to wipe your arse, I presume it happened because you answered reasonable discussion with nonsense attempts to insult, - I hope you have learn't not to do that, but your post on 16th Feb at 5:21pm indicates you may be a slow learner.
    VeryCaringBigBear
    18th Feb 2018
    8:03am
    Having money in the bank is a bigger gamble that the stock market as you lose most years after tax and inflation. At least with the stock market you grow your money in a tax effective way that keeps up with inflation.
    Not a Bludger
    16th Feb 2018
    2:31pm
    What a load of alarmist, breast beating claptrap.

    There is no loss until shares are sold - and, amazing, the markets have gone up some since this misleading article was written.
    Lookfar
    16th Feb 2018
    2:40pm
    My article was not directed to you, NOB, who was your comment directed to?
    Not a Bludger
    16th Feb 2018
    3:47pm
    No, Lookfar - not you - but to the writer of the grossly misleading main article above.
    Rae
    16th Feb 2018
    2:47pm
    Why has no journalist mentioned the fixed interest paper loses when the yield doubled last week?That's going to show up on indexes too.
    Personally I haven't bought fixed interest for over a year. I can understand why people are hesitant to fling money at those unable to live within their means for a piddling 1% over 30 bloody years.
    Caused of course by that old demon Greed. Wouldn't share the productivity properly would they?
    Propped up the lack of sharing with tax cuts and debt. Lot's of debt. Insane amounts of debt. And insane amounts of people.
    Shacks worth millions, companies that have never made a profit, on paper, worth billions.
    233 trillion dollars of the future spent on white tiles, oval baths, trips to the Bahamas and pure linen sheet sets. Don't even think about the cost fine dining experiences , weddings and other must haves we must have had.
    The whole thing makes no sense at all.

    One thing I do know is that up until now Markets, any markets, revert to mean at some points in time.

    When these markets correct there will be lots of paper money disappear.

    There is no value on fundamentals anywhere. Except maybe water futures as Climate Change slams into us.

    I'm buying Water Corporations and drilling companies just now. The aquifers are falling pretty fast all over.

    The sharemarket kerfuffle last week was nothing much in the grand scheme of things.
    Anonymous
    16th Feb 2018
    4:05pm
    Are you ok Rae
    Take a pill and go lie down dear
    Adrianus
    19th Feb 2018
    10:40am
    Rae, I don't see much of a future in debt securities in the short term, given popular opinion is that the RBA has only one way to go. There's a lot riding on corporate tax cuts to increase government revenue.
    Lookfar
    16th Feb 2018
    5:02pm
    Raphael, you need to learn to think instead of relying on meaningless verbal Cliches, this is not a shareholders meeting with everything assumed, it is YLC with new minds looking, and maybe finding you wanting, - suggesting someone with a different point of view to you is 'needing a pill' is insulting in your assumed situation, but in the real world it is you who are seen to fail.
    Anonymous
    16th Feb 2018
    5:19pm
    The old gal wasn’t making sense
    Ranting and raving like a Marxist version of a Jesus freak
    inextratime
    17th Feb 2018
    12:26pm
    You really have a way with words Raphael. Pity they are so inane.
    Radish
    16th Feb 2018
    5:19pm
    I moved from a Balanced Fund into a Conservative Fund six months ago as I had a "feeling" the market was going to take a plunge.

    At my age I now want limited exposure to the share market and I am happy with my choiced.
    Anonymous
    16th Feb 2018
    5:20pm
    Nah Radish - it’s back up again and the Dow will go to 30,000

    Anyway why be conservative when you always have the pension safety net
    Radish
    16th Feb 2018
    5:22pm
    I will never get the pension
    Anonymous
    16th Feb 2018
    6:06pm
    All the more reason not to have a conservative portfolio
    Radish
    16th Feb 2018
    6:27pm
    I like to sleep at night and what I do suits me; everyone has a different risk assessment and mine is conservative.

    I am fine with what assets I have and I have enough to last me out.
    Sundays
    16th Feb 2018
    7:41pm
    You could try 50/50. Better way to protect your assets from inflation
    Radish
    17th Feb 2018
    6:36pm
    You do not know what my situation is....or what assets I have and what mix I have. I am more than happy with how my finances are arranged.
    VeryCaringBigBear
    18th Feb 2018
    8:08am
    Switch probably made no difference in such a short term. Balanced fund will perform better over longer term especially if interest rates rise and bonds lose capital value.
    Radish
    18th Feb 2018
    1:38pm
    I do not care if I am getting a bit less than a balanced fund...over longer term yes it will perform better...but my longer term is behind me not in front of me.

    However, I have a rough idea of how long I will live going on actuarial figures and what I have is more than suffient.
    ex PS
    19th Feb 2018
    10:06am
    At the end of the day you should do what you are comfortable with. I have most of my Super money in balanced and moderate areas with a small portion in International Shares. This provides me with enough to furnish a comfortable lifestyle and I am not too concerned if the share market drops, as I do not have to access that money in a hurry and the market will always bounce back if given time.

    At my age I would not take risks with my Super as I have little capacity or inclination to earn it all back if it is lost. All I know is, I avoid anyone's advice if they try and tell me they can predict how the market is going to go.
    Charlie
    16th Feb 2018
    5:30pm
    Such a fuss about money people don't have access to anyway. How does it affect daily life I wonder? A housing loan that will eventually be paid for by super?
    MacI
    16th Feb 2018
    6:36pm
    It is stupid and scaremongering to refer to the recent drop in the valuation of Super balances as losses. Losses are only realised when they are liquidated. Granted anyone drawing an income from their Super will realise a small loss relative to a month ago but it's not going to send them to the wall.

    For anyone whose Super is in accumulation mode then the down turn presents a great opportunity to buy in at a cheaper price.
    MacI
    16th Feb 2018
    7:13pm
    In response to the question "Do you think funds should invest so heavily in shares?". It is the fund member who chooses how their Super Fund invests their Super (including not making a choice and therefore choosing the default investment mix offered by the Fund), not the Fund. Most Funds offer various investment options from individual asset classes such as cash, bonds, shares and property as well as pre-mixed options that have a range of growth versus defensive assets. Fund members need to stop blaming the Funds and take responsibility to make a choice about which Super Fund will manage their investments and to choose an investment mix that they are comfortable with. If someone chooses a Balanced investment mix (by default or otherwise) then it is their choice to invest 60-80% in higher growth, higher risk assets such as shares and property.

    The foregoing not withstanding Super Funds should absolutely provide the option to invest heavily in shares and to my mind would be negligent not to, especially for fund members with many years before retirement.
    cupoftea
    17th Feb 2018
    10:07am
    I changed my super from growth to conservative a couple of years ago as I am 63 glad I did I am picking up a couple of hundred a day
    Anonymous
    17th Feb 2018
    1:03pm
    As opposed to a couple of thousand
    Radish
    17th Feb 2018
    6:35pm
    You know Raphael, you can only spend so much...believe it or not...as you get older your needs are fewer. You can only eat so much, drink so much, travel so much and one car is enough for us.

    Hubby and I have more than enough to see us out and we have what we want and spend what we want but thousands a day is of no use to us. Why risk what you have. I have no desire to leave large amounts for others to spend.
    Anonymous
    17th Feb 2018
    8:22pm
    You are right Radish about the spending and there’s only so much You will need
    Radish
    17th Feb 2018
    9:29pm
    I know of two couples who lost everything in the 1987 crash...too much exposure to the stock market.

    Today their sole income is the full aged pension. These are couples who would have been self funded if they had been more prudent and less aggressive in their financial dealings.
    VeryCaringBigBear
    18th Feb 2018
    8:12am
    If they lost 100% in 1987 then they were very badly invested. The most well invested people lost on paper was about 25% and today they have many times the wealth if those who out their money in the bank.
    Adrianus
    18th Feb 2018
    2:02pm
    Yep, we know what caused that crash in 1987. Lazy Fund Managers spending all their time at the pub. You can put in place all the call and put options but it doesn't mean you can have a holiday just because the index is running at 30% pa with no end in site. That was when we realised that nobody was driving. Idiots!! A classic case of ''when everyone thinks the same then nobody is thinking."
    Adrianus
    18th Feb 2018
    10:13am
    Does anyone think that fund managers use a fall in markets as an excuse to skim? Why hedge with derivatives if they don't work?
    Anyway, a loss is only a loss when it is realised. Same as a gain.
    Radish
    18th Feb 2018
    1:39pm
    You are right Frank. I also have a separate share portfolio and I have sold nothing.