Super fund returns are always mixed bags, but one thing’s for sure - few have grown the wealth of their members over the past year as global financial markets have retreated.
The middle of the road return of super funds with between 61 and 80 per cent in growth assets - shares and property - for the past year is a loss of 2.3 per cent.
Funds with even more allocated to growth investments have suffered greater losses as these types of assets have lost more value than conservative options like bonds and cash.
The longer lower returns persist the greater the impact on super balances will be, possibly derailing the retirement plans of thousands of Australians who were banking on consistent top notch numbers from their super fund.
While you can’t control how much money your investments make, you can adjust your retirement planning to make up for a handful of weaker than expected years.
You might have had your heart set on hanging up the tools for a final time around age 60 and begin living off your super.
But, a 60 year old earning $70,000 with $300,000 in super, working an extra five years could bump up the annual spending amount to around $40,000.
This is an extra $5,000 compared with retiring when first planned.
Even working part-time in retirement will make a significant difference to how much money you have to spend each week and how long your savings will last.
You have a lifetime of skills that are no doubt transferrable to a range of other employment opportunities, which you might find enjoyable and enough to stave off any boredom that retirement can bring.
If working a day longer than you thought you might have to is off the cards, an alternative is to save more before retirement comes.
Any extra cash you have can be contributed directly to your super fund from your employer known as salary sacrifice.
Money saved this way is taxed at a much more favourable rate than when paid personally.
However you can’t get access the extra contributions made to your retirement savings until you reach the minimum age you can access your super.
Finally, check how much you are paying for someone to help manage your savings.
Financial planning can be pivotal to your wealth creation but if you have exhausted all of the strategies available to you, you might not need to have an adviser on an annual retainer.
There are plenty of ways to offset the threat weaker returns will have on your super balance, it just requires planning.