Share market volatility

Share market volatility

Share market volatility can make a big difference to your retirement income and is impossible to predict.

If you’re worried about another potential market collapse similar to the global financial crisis in 2008, you’re not alone. A recent National Seniors Australia survey found that 7 out of 10 older Australians share your concerns.

Share market volatility

Source: National Seniors Australia, 2018

Why does share market volatility matter?

When you retire and start to spend your savings, market-linked investments such as shares may increase or decrease in value depending on market conditions.

Market-linked investments generally benefit from positive returns however negative returns, coupled with regular withdrawals to pay for ongoing living expenses, could deplete your savings quicker.

Find out more about shares as an investment.

How annuities can help

The amount of money you receive regularly from your annuity is set when you invest, it will not be affected by share market fluctuations.

Knowing exactly how much money you will receive from your annuity can be useful in planning your retirement income balance sheet. In the National Seniors Australia survey 84% of older Australians rated the desire for regular and constant income as “very important”.

Strategies and products exist which can minimise share market risk, while giving your growth assets time to grow. Your financial adviser can provide guidance in this area.