Superannuation Discussion + market volatility

Quickstatus said:
Anyone over 150yrs?. Apparently there are a few over in the US?

Ideally if Superannuation is successful as a pension replacement, then the peak numbers should be reducing and also shifting toward the later age groups. Are you seeing this trend?
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There’s a couple of things to mention

The raw figures for inbound are relatively flat

At the same time the potential eligible Australians who turn 67 are going higher and higher (census 2021 data - 4 years ago)

That means the % of the total is dropping because the big cohort of baby boomers is getting to 67…

And because the vast majority of both genders worked we are passing through the “must quit your job when married” “stay at home mother” generations who had no superannuation

We are living Longer so this affects the over 90s. The surviving spouse situation means many on inheriting their partners share fall foul of the MUCH LOWER asset thresholds with twice the amount of assets now in one name not two.

Apparently there’s also a rule that if you go into aged care and don’t rent the house nor sell it that after 2 years they cut Orf age pension

The net impact is the new entrants appear to be around 33-36% of those who turn 67 (as compared historically 80%)

This is roughly meaning as each person who’s on age pension falls foul of surviving spouse or passes away , new entrants (from a much bigger pool) are only replacing the departed. Thus the % of the total grows smaller and smaller


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JohnK said:
I've been quietly watching my little stash grow with work contributions and investments but my heart skipped a beat this morning when I noticed ~2% of my funds disappear into thin air.

The 8%-9% growth the past few years has been nice but cannot afford dips like this one if I'm retiring and taking a pension in 3-4 years.
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This is not financial advice, it’s general information only, but most people don’t die immediately after they retire. If average lifespan for men is around 80 and you retire at 65, you’ve got another 15 years left and possibly more than that. Most people want their money to at least keep up with inflation in retirement and that means they need to still take some risk, even if they’re not comfortable taking as much as they did. My mother is nearly 80 and is drawing down from her super but because it’s still mostly in a balanced option she’s made enough on average each year since she retired that her capital sum hasn’t gone down at all. Your mileage may vary, past performance is not an indication of future performance etc, but just because you’re close to retirement doesn’t mean you suddenly have a really short investment horizon. When I get closer to retirement I will start switching *some* of my money into cash until I have enough in a cash option to fund 3-4 years of living expenses without having it come out of equities if the market is down. That way I can leave the rest invested in a way that hopefully still generates decent returns without having to panic every time the market goes up or down. When the market’s going well I’ll take profits and switch a bit more into cash, when it’s not, I won’t worry about it. Again, just what I’m personally going to do, not advice.
 
RSD said:
Yes - especially with things being so messed up at the moment!
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The simplified answer is until about 12-18 months out you can recover late period losses
After that as you head towards the access date, you got no hope recouping losses and bear in mind the loss drops your capital and means you got to make up an even higher interest return to recover the capital and then any interest.

At the time I took super at 54/11
The last 6 months were like this

July +1.08%
August +1.12%
September -0.16%
October -2.03%
Switched from default to cash
So basically lost all contributions and earnings for July - October

So I saved myself from further losses of
November -1.17%
December (day pension accessed) -1.1

If say I took the additional losses woulda made it up within 18 months on the CPI adjustments. Nevertheless it was still a decent hit to the per annum superannuation figure …
 
Quickstatus said:
And the catch is that some super funds apparently automatically move portfolio into "safer/conservative" close to retirement which may not suit everyone
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I think this is only if you are in the ‘default’ option. We (almost) all have the ability to control what options our super is invested in, IMO amazingly few actually use it, that is in my view on us not the super fund. They do what is on average regarded as best, if you think you can do better, do so. Of course that removes your ability to complain.
 
Rebekkap said:
but just because you’re close to retirement doesn’t mean you suddenly have a really short investment horizon.
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Exactly. The investment horizon is still about 20 to 30 years!
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JohnK said:
I've been quietly watching my little stash grow with work contributions and investments but my heart skipped a beat this morning when I noticed ~2% of my funds disappear into thin air.

The 8%-9% growth the past few years has been nice but cannot afford dips like this one if I'm retiring and taking a pension in 3-4 years.
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We are up about 15% FYTD before the last week, so a 2% correction is not even a blip.
 

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