MLC Market Watch

Self-funded retirees who are invested in the sharemarket have arguably been the hardest hit by the global financial crisis.

Many may now be wondering if they should move their account-based pension into a more conservative investment portfolio, which contains less growth assets such as shares and property.

So we went back through history to see the impact that switching to a more conservative portfolio would have had, if done after a major market fall.

We also outline some strategies you could discuss with your financial planner to help you weather the storm.

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Given what’s been happening in financial markets recently, most people with superannuation or pension investments would have seen their account balance fall in value.

If this has happened to you, we understand you may be quite worried at the moment. So here are some things people at different life stages could consider:

People who are ten or more years away from retirement

It’s important to keep in mind that super is a very tax-effective place to invest.

This is because:

• investment earnings are taxed at a maximum rate of 15%, not your marginal rate which can be up to 46.5% (includes a Medicare levy of 1.5%), and
• you can receive a tax-free income at age 60 or over.

You also need to remember that super is a long-term investment. This is because you are investing not only for the ten or more years until you retire, but the 20 to 30 years you could spend in retirement.

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On Thursday 4 December, MLC hosted a live investor webcast focused on super and pensions.

The format for the 45-minute online discussion was 15 minutes of presentations, followed by 30 minutes of live Q&A.

The presenters were:

• MLC Investment Strategist Brian Parker who provided a market update and talked through the issues of the day, and
• Paul Maddock, General Manager Investment Products & Services who detailed the options and choices people in or approaching retirement have.

A panel of experts then took live questions from viewers.

A recording of the webcast is now available. Tune in for what was a lively and insightful discussion.

You can hear what other people are asking the panel, and navigate the webcast to just listen to the bits that really interest you.

Watch MLC’s online discussion now.