Scared of Losing Money? The Bigger Risk Is Running Out

The past few weeks have been a brutal reminder of how fast markets can turn. The ASX 200 hit four-month lows, dropping 2.2% in a week as geopolitical tensions and energy prices rattled confidence. If you’re nearing or in retirement, watching your super wobble is unsettling.

That knot in your stomach? Normal. The urge to switch to cash and “wait it out”? Also normal.

But here’s the hard truth: the comfort of cash can be a costly illusion.

• Major super funds have reported switching to cash at multiples of normal levels — Australian Super says ~4x the usual rate (around 500 members per day), and HESTA is seeing higher switching too.
• Their case studies show the real cost: one example from Australian Super had a $100,000 balance switched to cash after a drop ending up $11,000 lower after a year, with potential 30-year losses of $26,000–$57,000. HESTA estimates similar moves during COVID cost members more than $20,000 over five years.

I’ve seen people who have suffered in the hundreds of thousands.  Moving to cash and never entering the market again, only the end up at retirement with a lot less to fund their income.

Why this happens

• You lock in losses when you sell after a fall.
• You miss the strongest recovery days that often follow sharp declines.
• Inflation quietly erodes cash — the silent tax that eats purchasing power, especially over 20–30 years of retirement.

And the risks that really matter in retirement don’t make headlines:

• Inflation risk: Even “modest” 3% inflation can halve purchasing power over a couple of decades.
• Longevity risk: Many Australians face 25–30 years in retirement. Your money must keep working.
• Sequencing risk: Selling growth at low prices to fund living costs early in retirement can do lasting damage.

What to do instead (protect without panicking)

• Segment by time horizon:
  • 1–3 years of withdrawals in cash/short-duration for stability and sleep.
  • A mid-term buffer in lower-volatility assets to refill the cash bucket.
  • A long-term growth sleeve to fight inflation and support longevity.

Set rules before the storm: rebalancing bands, withdrawal order, and “do-not-touch” money.

Align risk to your real comfort level (not the news cycle) with a written plan you can stick to.

If you’ve already moved to cash, you haven’t failed — you’re human. The fix isn’t more headlines; it’s a plan that turns anxiety into disciplined action. Super products are built to ride out volatility; the bigger long-term threat is inflation quietly undermining your lifestyle.

Making decisions based on short time frames may cost you a comfortable retirement.  Zoom out and focus on the longer term plan and turn the dial down on those pesky news channels of turn them off completely.

Your Next Step Towards More Clarity, Confidence, and Control Over Your Retirement

If you’re thinking, “I should probably get serious about this retirement thing,” let’s talk. Book a free 20-minute Retirement Clarity Call by clicking here . No jargon, no judgment — just an honest conversation about where you are, what worries you, and what’s at stake if you wait.

I typically work with households at $750k+ across super and investments. If you’re earlier on, you’re welcome too — I’ll point you to the best next step.

You can book your Retirement Clarity Call by clicking here or by scanning the QR code below which will take you to my booking page.

Glenn Doherty – CFP – Financial Planner | Retirement Planning Specialist |Retirement Planning Made Simple for over 55’s within 7 years of retirement

We work with people in Adelaide and around Australia virtually via zoom!

Request a Retirement Clarity Call

An opportunity to talk through some of your challenges and questions you have around your retirement.

Achieve some clarity and maybe a roadmap on how you can achieve a comfortable retirement.

Schedule here

Advice Disclaimer: Any reference in this publication to the provision of advice refers to advice of a generic nature, and should not be taken as product or investment recommendations. Before any action is taken based on the information provided, independent financial advice from a licensed financial adviser should be sought. Financial Freedom Project Pty Ltd ATF GA & DC Doherty Family Trust Trading as Jigsaw Private Wealth is a Corporate Authorised Representative of Spark Advisors Australia Pty Ltd. The information contained in this publication is of a factual nature only and is not intended to constitute financial product advice. Information is current as at date of publication. This is an online information blog. It does not imply an offering of securities.