Superannuation Discussion + market volatility

[JohnK]

My current super balance is not far above my contributions in that time. That's embarrassing

It's worse than embarrassing.. its criminal.. unless you have set some silly options.
Who is the fund manager..name and shame time...

ANZ Smart Choice Super. I think it was OnePath and it's change since. I'm in the 1960s fund. I checked a few years back and they were earning 5%-8% a year.

I'm now beyond stunned they would lose ~10% in 2 quarters. That's awful for a conservative investment. It will take 3+ years to get back to what I was at beginning of this year.

 

[clifford]

Except it is - same with any other investment. Unless you sell, you're not realising that loss. With shares it's timing in the market, not timing the market. The long term averages support this.

I'd go with timing the market (as Serfty seems to imply above).

That strategy enabled me to retire at age 52, and I don't see myself going back to work any time soon. At some stage in your life, super has to become real money. YMMV. Or, you'll be the richest person in the cemetery.

 

[Flashback]

I'd go with timing the market (as Serfty seems to imply above).

That strategy enabled me to retire at age 52, and I don't see myself going back to work any time soon. At some stage in your life, super has to become real money. YMMV. Or, you'll be the richest person in the cemetery.

Others seem to disagree: Vanguard Asset Management | Personal Investing in the UK

For approaching retirement age, I would be switching the lower risk options rather than trying to 'time the market'.

 

[tgh]

At some stage in your life, super has to become real money. YMMV. Or, you'll be the richest person in the cemetery.

In many of the comments here, I find the meaning of the words.. confusing….eg what does the above mean in clear and simple english ?

 

[Buzzard]

I've always gone be time in the market not timing the market.

When I retired and had to draw the minimum % and no longer able to make contributions, my super just kept on increasing.

 

[SydneySwan]

I've always gone be time in the market not timing the market.

When I retired and had to draw the minimum % and no longer able to make contributions, my super just kept on increasing.

So far I have same experience. I started drawing my super in March 2016. Since then it has grown by 48% and if I added back the withdrawals it would be 74% higher. My super is in the balanced option of an industry super fund and has been since 2005.

 

[Buzzard]

So far I have same experience. I started drawing my super in March 2016. Since then it has grown by 48% and if I added back the withdrawals it would be 74% higher. My super is in the balanced option of an industry super fund and has been since 2005.

Low cost industry fund for me too.
Also sticking with the balanced option.

 

[Cossie]

Hmmm, We are in a low cost industry fund which I thought was balanced, it has dropped over 10% in the last couple of weeks. Last time this happened it was the gfc, dropped over 10% but made it back to previous figure.
In fairness we are only slightly under our original amount from 10 years ago.
At least as a bonus for us, interest rates are going up. I realise this won’t please a lot of others.

 

[Flashback]

Hmmm, We are in a low cost industry fund which I thought was balanced, it has dropped over 10% in the last couple of weeks. Last time this happened it was the gfc, dropped over 10% but made it back to previous figure.
In fairness we are only slightly under our original amount from 10 years ago.
At least as a bonus for us, interest rates are going up. I realise this won’t please a lot of others.

The last week has been particularly bad so just ride it out if you can.

 

[tgh]

Our smsf is down 11%..but I rate at least 5% of that as froth and bubbles….

 

[mrsterryn]

Just curious as to why "government pension " would be perceived as bad ? I saw an early post whereby the Age pension seems to be a failure ?
We have savings and assets but live paycheck to paycheck on our defined benefits .

 

[Flashback]

Just curious as to why "government pension " would be perceived as bad ? I saw an early post whereby the Age pension seems to be a failure ?
We have savings and assets but live paycheck to paycheck on our defined benefits .

Defined benefits ... ! Now that's something you don't much of outside the baby boomer crowd these days

 

[mrsterryn]

Defined benefits ... ! Now that's something you don't much of outside the baby boomer crowd these days

To be honest I am very grateful we went down that path for our retirement income

 

[CaptJCool]

Just curious as to why "government pension " would be perceived as bad ? I saw an early post whereby the Age pension seems to be a failure ?
We have savings and assets but live paycheck to paycheck on our defined benefits .

Me also

I track the CSS (ComSuper) defined benefit (open 1976-90) earning rate since days of GFC
....
PLEASE NOTE the monthly earn rate is the raw figure so the annualised rate IS NOT merely an addition Of 12 months. It’s a compounded annual rate so hence the differencec

 

[NM]

Just curious as to why "government pension " would be perceived as bad ? I saw an early post whereby the Age pension seems to be a failure ?

Regarding the Age Pension, there are several considerations:

• If you don't have sufficient personal savings (superannuation, assets etc.) to self-fund your retirement, then the Age Pension is the safety net (a very good thing)
• The Australian Age Pension is better than what many other countries provide in terms of government support for the post-working citizens.
• The Age Pension is not very much to live on, but plenty of retirees can and do live ok on that payment (my parents and now just my mother since my father passed away a few years ago), but its a much bigger struggle for retirees who do not own their home and have to pay rent as well.

So I am personally aiming (and expecting) to not qualify for the Age Pension when I retire, as I expect that through self-funding from my Superannuation and other assets I will have greater spending/living/traveling financial power than I would have if I qualified for and relied upon the Age Pension.

I don't see the Age Pension as a failure or bad. In fact I think it is a very good thing that Australia has the Age Pension system we do have. I am glad it is there and available to those who need it. But I do hope that my savings, superannuation and assets will be sufficient when I retire that I do not qualify for it and not rely upon it. This is partly because I like to be independent, and partly because I want others who may be less fortunate and not have accumulated sufficient personal wealth access to a bigger pool of public funding.

Not having sufficient personal wealth at retirement to be financially self-sufficient should not be perceived as failure - there are many, many varied reasons that some (many) people will reach retirement age (whatever age that is for them) with limited financial assets and hence rely upon the Age Pension for their retirement income.

 

[SydneySwan]

Just curious as to why "government pension " would be perceived as bad ? I saw an early post whereby the Age pension seems to be a failure ?
We have savings and assets but live paycheck to paycheck on our defined benefits .

It was my friends wife who said that. The couple concerned are what is generally referred to as “self-funded” in that their assets or income are above the threshold to qualify for the age pension. i know that their assets would have to fall by about 75% for them to qualify for even a part-pension. Obviously that prospect is not very attractive to them.

 

[mrsterryn]

It was my friends wife who said that. The couple concerned are what is generally referred to as “self-funded” in that their assets or income are above the threshold to qualify for the age pension. i know that their assets would have to fall by about 75% for them to qualify for even a part-pension. Obviously that prospect is not very attractive to them.

Ahhh I thought they must have been close to becoming payable . Definitely can understand why it would be an impact

 

[drron]

We are in the fortunate position of being given permission to spend the kids inheritance.

 

[Buzzard]

We are in the fortunate position of being given permission to spend the kids inheritance.

I don't need permission, I have no intention of leaving the kids anything.

 

[mrsterryn]

Hoping this is staying on topic
Do people .....work their superannuation to perhaps be entitled to either the Cshc or the old infamous $1 pension?