Poor performance and high fees are eating away at many retirement nest eggs, with soaring living costs an added worry for retirees.
Super fund performance continues to slide, forcing investors to make tough choices as traditional diversification strategies fail and inflation becomes a serious problem for the first time in 30 years.
A combination of rising inflation and central banks tightening interest rates have increased bond yields, pushing prices down and resulting in negative returns from both fixed income and shares, say analysts. Chris Brycki, chief executive for Stockspot, an online investment adviser and fund manager, claims that any fund member being charged more than 1.5 per cent is “probably being ripped off”.
According to Rainmaker, the average fee for a super fund is 1.05 per cent, with 1.14 per cent for a retail fund and 0.97 per cent for not-for-profits like industry funds. “If the average return is just over 6 per cent, the retirement income will drop 42 per cent, and you’ll be paying $90,000 in fees over the decade.
Equities are ineffective at hedging against the initial impact of inflation but over time tend to provide high returns that compensate for rising prices. But Minney says that with a large proportion of the costs covered by public health in Australia, the inflation impacts of health costs on average “are not as large as many people fear”.Unisuper’s Pearce says investors with longer than 10 years to retirement should welcome volatility because they are accumulating assets at lower prices.
Alistair Barker, head of total portfolio management for AustralianSuper, which has about $261 billion under management, adds: “We expect market uncertainty will continue. Returns for members in coming years will be more subdued compared to what we have experienced in the past 10 years.”Barker says AustralianSuper has strengthened liquidity, reduced allocations to listed equities and maintained investments in high-quality private equity companies and infrastructure.
Philippines Latest News, Philippines Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Unco-operative China accused of fuelling debt crisisIn Washington this week, officials have expressed frustration at China’s foot dragging on moves to restructure poor nations’ debt.
Read more »
‘It’s humiliating’: US voters struggle with hunger ahead of midtermsEconomy in focus: Despite rising inflation and soaring grocery prices, food insecurity is a topic few politicians are addressing
Read more »
Qantas shares surge as Joyce predicts profitQantas shares have soared to their highest levels since the start of the COVID-19 pandemic after it said it will return to the black in the current half.
Read more »
Qantas shares surge as Joyce predicts profitQantas shares have soared to their highest levels since the start of the COVID-19 pandemic after it said it will return to the black in the current half.
Read more »