Pension members hit hardest by “horror month” 33



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In many respects, this past August was a month the world would like to forget, not least of all on the financial markets.

In the midsts of the plummeting dollar and mass global shares sell-off, those of us with superannuation saw our hard-earned nest egg take a beating. And no one copped it worse than retirees, according to data released by SuperRatings.

Higher loses were recorded for superannuation members in the pension phase, compared to those who are still working – a double blow for those of us who don’t have an income to look forward to and have carefully planned our retirement.

The New Daily reports that  the average loss for the typical superannuation member of working age was 2.9 per cent, however the average rate of loss for those who are no longer working and in what’s known as the pension phase, was 3.2 per cent.

Apparently, this is because once you’re in thus phase, your super does not get a tax break after investment losses, whereas people who are still earning and accumulating super are entitled to beneficial tax treatment when their fund takes a hit.

Jeff Bresnahan, founder of SuperRatings, says this is to be expected, and that retirees benefit more when the market is performing well.

“Generally, in positive markets, pension members benefit due to preferential tax treatment, however, in negative markets pension funds cannot take advantage of the tax breaks available for capital losses that accumulation funds receive,” he explains.

“This can result in pension funds underperforming accumulation funds in negative markets, as was evident in August.”

While this is some consolation, it does leave us wondering when the market will sort itself out and put us back in the black.


Tell us, how has the share market chaos of last month affected you? Have you noticed a loss? Does this make you nervous?

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  1. The last 2 years have been chaotic and stressful for older Australian’s with this Government,Pensioners have been under a lot of stress and I am not convinced that this is the end of it. If they are elected for another term they will claim a mandate and cut the CPI rise or worse

  2. I’m conservative with how I set up my investments so I don’t see huge swings as the Bulls and Bears play on the markets. Yes I have more now than I had 17 years ago when I retired. But, the current dollar has the same buying power as 65cents had 17 years ago.

    Am I worried? Nah, life’s a breeze and one sure can’t take it with them. B|

  3. We are self funded retirees and it is worrying to see that instead of my pension coming from the earning and increase in my supers value it now is drawing from the original investment. With interest rates low it is off-putting be looking at a dwindling nest egg when I hopefully have a long period of retirement ahead.

  4. Yes our term deposit interest is almost nil now its not very big but with the interst it allowed us to use the interest or re invest it now theres hardly any to reinvest. Its our funeral and emergency money but its the difference between being able to buy small things for our family and visiting them interstste or not

  5. Since I retired almost 3 years ago, I have watched our hard earned super pensions although small, fluctuate with the volatility of the market, most of us who get a pension also copped a battering from the GOVERNMENT when they in their WISDOM made the decision to CUT future increases to the PENSION however all our amenities and private health insurance+ other everyday expenses have blown out of proportion, yet you ask us are we concerned? Yes we are very concerned that our Politicians expect us to take PAY CUTS while they continue to live high on the hog and give themselves PAY RISES, oh and yes let’s not forget their ENTITLEMENTS AND LURKS AND PURKS THAT ONLY POLITICIANS EXPECT, would they be willing to take pay CUTS? Hell no because they are not doing anything wrong, are they?

    8 REPLY
    • The current government gave you an indexed pension as usual. Plus they left in place all of the carbon tax benefits when that toxic tax was removed. Enttiled baby boomers again.

    • Entitled baby boomers as you so eloquently described have been the backbone of this country. What has been your contribution?

    • John Green is totally looking to get a rise out of everyone, he obviously doesn’t have to SURVIVE on a PENSION, lucky him!

    • John Green doesn’t have a life according to his profile, go find a rock idiot. You have no idea of the facts around pensions and retirement funding. 30% of pensioners live below the poverty line. But a twat like you wouldn’t give a shit.

    • When are the cuts to pensions coming, I thought it was on CPI , which applies to MOST retirees incomes and a few pensioners , Vets pensions have been on CPI for years & years as have Disability pension s from Govt for workers . Wont worry me as I only know CPI, for last 40 years, up & down , but it does increase .My childrens Shares have not gone down enough to worry about as most are worth 50% more than original cost

    • The government have indexed the pension on the cpi, instead of on wage increases. Naturally the cpi will give a smaller increase

  6. As a single recipient of DSP (for which I am very thankful) I received $58 increase over the last two years. I lived alone renting a comfortable flat in a country town and lived comfortably enough.

    After a cancer diagnosis, I was invited to live with a friend (also DSP recipient) in his own home to be close to good medical treatment. He was struggling financially, but by sharing we are coping OK, and my treatments have been successful.

    If people can share with family and/or friends, life can be financially easier.

  7. We have noted a miniscule loss, however, stock markets go up and down, so it’s not a bother.

  8. It certainly does worry me the pollies are taking more and more of what we have but they are trying to take what we don’t have as long as their sitting they don’t care about the people lets hope Malcolm Turnbull has a heart

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