Member. May 2018 THE NEWSLETTER FOR MARITIME SUPER MEMBERS IN THIS EDITION: Market review volatility crept in but

Transcription

1 Member THE NEWSLETTER FOR MARITIME SUPER MEMBERS May 2018 IN THIS EDITION: Market review volatility crept in but market still strong Bridging the super gap: super strategies for women Downsizing and super contributions: an opportunity to boost super

2 Member Market review... Volatility crept in but outlook still strong... Snapshot: Some volatility was experienced by global markets in the first quarter of 2018 Global economic conditions continue to strengthen and outlook remains strong Following strong performance over the 2017 calendar year, global markets experienced some volatility throughout the first quarter of Global economic conditions continued to strengthen, with firm macroeconomic data and global growth remaining synchronised, leading to most developed sharemarkets posting gains in January. However, uncertainty over the pace of expected interest rate tightening by the US Federal Reserve due to inflation concerns, controversies relating to large US technology stocks, and fears surrounding a potential trade war between the US and China led to developed markets around the world pulling back some of the gains made in 2017 and early International sharemarkets (hedged into AUD) fell 2.1% over the March quarter, however have returned 8.0% over the financial year to date. The US sharemarket declined primarily due to uncertainty surrounding trade tensions and regulatory concerns over new age technology stocks. Uncertainty also led to a rise in volatility across sharemarkets which masked strong economic data, with the US unemployment rate stable at a 17 year low of 4.1% for the sixth consecutive month in March and the strongest level of manufacturing since early Due to the broad-based growth observed in the US economy, the Federal Reserve, led by Jerome Powell in his first meeting as Chairman, raised rates by 0.25% to a target range of 1.5% to 1.75%. The Australian market underperformed over the first quarter of 2018, with the ASX300 falling by 3.8% as domestic equities were not immune to the sell-off impacting global markets. GDP data was released during March, with growth slowing to 0.4% over the quarter and 2.4% over the year (from a previous level of 2.9%). The Financial Services Royal Commission commenced during the quarter, with negative sentiment weighing on the banks as the four majors fell between 4% and 8% over the quarter. The RBA left the official cash rate on hold at 1.5%, citing ongoing concerns surrounding subdued wage growth, low inflation levels and a desire to reduce unemployment further before considering tightening the cash rate. The Australian dollar (AUD) depreciated against most major currencies. Maritime Super s investment options performed well relative to markets for the quarter, with returns for the 12 months still positive. Australian shares Australian shares, as measured by the S&P/ASX300 Accumulation Index fell 3.8%. Small cap stocks outperformed large cap stocks, with the ASX Small Ordinaries Accumulation Index returning -2.8% and the S&P/ASX50 Accumulation Index returning -4.2%. International shares International shares, as measured by the MSCI World ex-australia Index (hedged into AUD) fell 2.1% over the quarter. Across developed markets, Italy and the US, outperformed the broader developed market, while the United Kingdom and Germany were among the weakest performing countries in local currency terms. Property Australian property (unlisted) returned 2.3% over the March quarter. Fixed interest Australian bonds returned 0.9% over the quarter, outperforming hedged international bonds (-0.1%). Cash The Reserve Bank of Australia maintained the cash rate at 1.5% during the quarter. Member Focus The newsletter for Maritime Super members

3 Investment performance to 31 March months 1 year 3 years 5 years 10 years Australian Shares -2.12% 6.78% 6.29% N/A N/A International Shares -0.55% 12.61% 6.61% N/A N/A Growth -0.25% 9.04% 6.68% 9.61% 5.32% Growth MVP -0.07% 8.05% 5.55% N/A N/A Balanced 0.20% 7.63% 5.88% 8.17% 5.37% Moderate 0.23% 6.83% 5.38% N/A N/A Conservative 0.15% 4.01% 3.64% 4.90% 4.54% Cash Enhanced 0.39% 1.84% 2.06% 2.33% 3.25% Cash 0.32% 1.28% 1.53% 1.74% N/A Updated Privacy Policy The 1, 3, 5 and 10-year returns are per annum for the periods ending 31 March 2018, and the 3-month return is the actual return for the quarter to 31 March These returns are based on movements in unit prices and are net of asset-based fees and taxes. The returns apply to accumulation accounts; different rates of return apply to pension accounts. Refer to the website or call Member Services for more information. Note that past performance is not a reliable indicator of future performance. Your privacy is important to us, and our Privacy Policy sets out how we collect, use and handle your personal information. Our Privacy Policy has been recently updated - to read the Privacy Policy, visit The newsletter for Maritime Super members Member Focus

4 Women and super... bridging the gap Research shows that many Australian women retire with significantly less super than men. There are several reasons for this: many women take time out of the workforce to raise a family, plus there s still widespread salary inequality between men and women, meaning that women often receive less in super. Whether you re working full-time or part-time, having adequate super is vital for a comfortable retirement. What you can do to bridge the super gap Make voluntary contributions to boost your super Women s super account balances are 45.7% less than those for men 1 Why is this an issue? Direct your employer s SG contributions into your Maritime Super account See whether you re eligible for a government contribution (such as the co-contribution or low income super tax offset) Find lost super and roll it into your Maritime Super account Have your spouse split some of their super in your favour Speak to one of our financial planners to discuss strategies relevant for you. 1 Workplace Gender Equality Agency: Gender workplace statistics at a glance fact sheet (February 2015) Australian Bureau of Statistics (February 2015): Gender Indicators, Australia, Feb The Financial Literacy Foundation, Financial Literacy: Women Understanding Money, The University of Melbourne Faculty of Business and Economics - Household, Income and Labour Dynamics in Australia (HILDA) survey (2014) - Women outlive men by 5 years 2 so their savings must go further 77% of Australian women rely on some form of pension in retirement 3 Single, 60-year-old females have the highest poverty rates in Australia at 36% 4

5 Over 65 and thinking about downsizing? You ll be able to save more in super if you do. In last year s Federal Budget, the Government announced that older Australians who sell their family home to downsize can put an extra $300,000 into their super (or $600,000 for a couple) from the proceeds of selling their home. This contribution is in addition to existing contribution caps, so it provides an opportunity for downsizers to save more in the home-stretch towards retirement that they may not otherwise have. It applies from 1 July 2018 to anyone over 65 who is selling their primary residence which they ve owned and lived in for more than 10 years. Benefits of the downsizing contribution scheme You can release equity tied up in your home Many older Australians find themselves asset-rich and cash-poor, so the most obvious advantage is that you are releasing equity which is tied up in the family home, giving you more money to cover your living expenses and enjoy a better lifestyle in retirement. There are no work test or age limits The voluntary contribution rules don t apply to downsizing contributions. In other words, you don t need to meet the work test, so you can make a downsizer contribution regardless of whether or not you are working. Additionally, the upper age limit of 75 years which normally applies does not, so anyone over 65 can make a downsizer contribution. You have easy access to your money You re over your preservation age, so your money is easily accessible at any time. Learn more... We ve put together a fact sheet which tells you all you need to know about this incentive it s an interesting read and worth browsing if you re thinking about downsizing. To read the fact sheet, visit the Publications page of our website. Downsizing and super contributions: everything you need to know From 1 July 2018, older Australians can take advantage of a downsizing contribution incentive introduced by the Government, and make a contribution of up to $300,000 into super from the proceeds of selling your home. This contribution is in addition to existing contribution caps, so it provides an opportunity for downsizers to save more in the home-stretch towards retirement. Downsizers can boost their super Many larger homes are occupied by older singles or couples, and the Government introduced this measure to encourage these people to downsize into smaller homes that better suit their needs. This also has a knock-on effect of releasing more housing stock for younger, growing families. Downsizers can deposit up to $300,000 (or $600,000 for couples) into their super. Eligibility Although there s no requirement to actually downsize or purchase another home, there are a few strings attached to this opportunity: you must be 65 or over your home must be located in Australia you (or your spouse) must have owned your home for 10 years or more your home must have been your primary place of residence for at least 10 years you must make your downsizing contribution within 90 days of selling your property. It applies to your home only - not houseboats, caravans or mobile homes. Timeframe and deadlines The downsizer incentive applies to contracts for sale which are exchanged on or after 1 July Once your house settles, you have 90 days to make your downsizer contribution. Benefits of the scheme You can release equity tied up in your home Many older Australians find themselves asset-rich and cash-poor, so the most obvious advantage is that you are releasing equity which is tied up in the family home, giving you more money to cover your living expenses and enjoy a better lifestyle in retirement. There are no work test or age limits The voluntary contribution rules don t apply to downsizing contributions. In other words, you don t need to meet the work test so you can make a downsizer contribution regardless of whether or not you are working. Additionally, the upper age limit of 75 years which normally applies does not, so anyone over 65 can make a downsizer contribution. You have easy access to your money Because you re over your preservation age, you can withdraw your money at any time, so your money is easily accessible. The newsletter for Maritime Super members Member Focus

6 Federal Budget fact sheet Our Federal Budget fact sheet is produced each year the day after the Budget, and provides a great summary of all the proposed changes regarding super and pensions, and how they may impact you. This year, the Budget will be handed down on Tuesday, 8 May Visit the Publications page of our website from 9 May to download a copy, or call Member Services for a hardcopy. Lodge your tax return from $59 Every year, we all need to file a tax return and this can be a costly and time-consuming exercise. All members have access to discounted tax assistance through Guideway Financial Services, with prices starting from just $59. To learn more, call Member Services on Next Fixed Term Investment starts 1 June You have until 25 May 2018 to invest in the Fixed Term Investment. Simply complete the Fixed Term Investment application available from our website or by calling Member Services. Refer to the website in mid-may for the interest rates. Fancy a treat from the Government? If your total income is less than $51,813 this financial year and you make an after-tax contribution to your super, you could receive up to $500 from the Government. That s not to be sniffed at. Known as the Government co-contribution, it s designed to help you boost your super. For every dollar you contribute from your after-tax income, the Government will put in 50 cents, up to $500. To fetch your treat, all you need to do is make an after-tax contribution to your super. Once you ve made a contribution and lodged a tax return, the ATO will calculate the amount you are entitled to receive and deposit this amount automatically into your super account. Simple! This newsletter has been issued by Maritime Financial Services Pty Limited (MFS). This newsletter contains general information and doesn t take into account your individual objectives or financial situation or needs. Consequently, you should consider the appropriateness of any general information in relation to your situation before making an investment decision. MFS recommends you seek individual advice before making any decisions concerning your superannuation maritimesuper maritime_super