Superannuation nightmare as $14,000 impact of Trump's tariffs on everyday Aussies revealed: 'Going backwards'

Yahoo

21-04-2025

Donald Trump's tariff chaos on Aussies' nest eggs has finally been revealed, and it's not good news. The US president's constantly changing foreign policy has sparked massive swings on the Australian and global share markets.
Because many people's superannuation funds are invested in these markets, their retirement money has been at the whim of these sometimes daily changes. Superannuation consultant firm Chant West said the median super balanced option fell 1.9 per cent in March.
This option is projected to drop a further 2 per cent in April.
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The median super balanced option, according to Chant West, has between 61 to 80 per cent of money invested in shares.
The average superannuation balance for Aussies aged 65 to 69 was $428,056, according to ASFA.
That means the average Aussie who has just hit retirement could have seen upwards of $13,355 drained from their nest egg in less than two months.
An Aussie wanting to meet a "medium" retirement standard would roughly spend around $43,000 per year, while a couples would spend around $62,000.
That recent fall equates to nearly four months of living for a single person.The losses were even more pronounced for those with super funds geared to all growth.
That's where 96 to 100 per cent of money is invested in shares, and they were down 3.3 per cent in March alone, which is a $14,125 drop.
High-growth accounts, which have 81 to 95 per cent invested in shares, fell 2.5 per cent.
Even though the last two months have been volatile, the median super fund was still up 5.5 per cent over the nine months of the 2024-25 financial year.
All growth was up 6.9 per cent for the same time, while high growth was up 6.0 per cent.
But Chant West senior investment research manager Mano Mohankumar doesn't want these figures to spark panic amongst retirees or those on the verge of retirement.
'While we appreciate that members all have different tolerance levels for seeing their account balance going backwards, the majority can afford to remain patient, even many older members,' he said.
'When markets fall sharply, there is a tendency for some people to think about moving to lower-risk options or cash, with a view to moving back later, either out of fear or as an attempt to time the market.
'But far more often than not, that strategy results in a worse long-term outcome than if you stay the course."
A poll of more than 3,700 Yahoo Finance readers found 70 per cent were worried about the impacts the US tariffs will have on their superannuation in the short and long term.
That's the million-dollar question.
Donald Trump announced a 90-day pause on the tariffs for dozens of countries, and it led to massive rallies on the ASX and US markets.
They certainly didn't return to pre-tariff levels, but the turnaround wiped off a lot of losses that occurred that week.
It's unclear what will happen between now and that 90-day deadline, and whether Trump sticks to his guns or organises new deals with those affected nations.
H&R Block director of communications Mark Chapman told Yahoo Finance that more chaos like we've seen in April could lead to a horror reality for many older Aussies.
"Unless there is a rapid uptick in the stock market, this could mean that many people will have to work longer to afford the kind of retirement they thought they were looking at just a few weeks ago," he said.
"Reduced economic activity and possibly higher unemployment will lead to a reduced income tax take and a reduction in sales of goods and services will lead to a reduction in the amount of GST collected.
"Exports will be hit and sales of vital minerals and ores will inevitably occur with the shrinking of the world economy, leading to less demand and less tax being paid into the system.
"This could lead to increased government borrowing to support the domestic economy."
The Reserve Bank of Australia is even tipped to cut interest rates next month to stem some of the impacts of the tariffs.