What If My Super Pension Crashes?

Jake Flaherty, Steve Obst and Justin Butler.

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In recent years, many Australians—particularly those approaching or already in retirement—have been asking the same question: How do I protect my super and pension against market downturns?  

It’s understandable. Since the COVID shock, we’ve seen ongoing uncertainty driven by rising interest rates, stubborn inflation, and global instability. While the reasons may differ from one cycle to the next, the impact on investor confidence is often the same.  

A common reaction during volatile periods is to move to cash at the first sign of trouble. On the surface, it seems sensible—avoid losses and wait for markets to recover. The reality, however, is far less straightforward.  

Market falls often happen quickly, and recoveries can be just as rapid. Some of the strongest gains occur in the early stages of a rebound, when sentiment is still negative. The challenge is that consistently timing when to get out—and more importantly, when to get back in—is incredibly difficult.  

Even professional fund managers regularly get this wrong.  There are also costs involved in switching investments. While not always obvious, transaction costs and spreads can reduce returns over time, particularly if decisions are made under pressure.  

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For younger investors still building their super, market downturns can actually work in their favour. Regular contributions continue, allowing them to buy investments at lower prices.  

Retirees, however, face a different challenge. Drawing a regular pension means selling assets to fund income. If markets are down, this can lock in losses at exactly the wrong time.  

This is why having a strategy in place is so important.  

One approach we’ve used successfully over many years is to quarantine a portion of a retiree’s portfolio into cash and more conservative investments. This creates a buffer, allowing pension payments to continue without needing to sell growth assets during downturns.  

Market volatility is a fact of investing—but with the right plan, it doesn’t have to derail your retirement.  

If you’d like an obligation free review of your financial situation, call us for an appointment at our office in Carlo Drive, Cannonvale today.  

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