Some retirement portfolios may never recover from a big hit to the balance just when contributions have stopped and withdrawals have commenced. The possible sequence of returns is another risk to focus on.
Most financial advisers will say they have faced an increased level of scrutiny from clients due to the Royal Commission. The test is how the industry wins back trust.
With the availability of large pools of retirees, the law of large numbers will start to see a predictable distribution of lifespans around the mean, allowing for longevity risk products. An important development.
There has been a massive focus on the maximum allowed in a tax-free pension of $1.6 million, but what happens if your portfolio rises in value and you exceed it? Should you worry about it?
The current system is complex and inequitable, and those most affected by aged care anomalies are often least able to understand the consequences.
Most people think of super access in terms of age, but when life deals a cruel blow, the rules allow members early access subject to certain conditions. It’s a valuable safety net.
Increases in longevity, and the numerous changes to the super system since inception, have mostly worked against self-funded retirees. Meanwhile, politicians and bureaucrats enjoy far superior retirement benefits.
As the population ages and property prices rise rise, equity in owner homes has more potential as a significant source of ‘retirement income’. But an ASIC report highlights complexities in reverse mortgages not well understood.
Are the costs of accommodating and financing your adult children at home adversely affecting your retirement savings? Supporting family is important, but so is setting up your own comfortable retirement.
The proposal to increase eligibility for the age pension to 70 was driven by budget austerity, but it overlooked the vulnerable people who could not wait that long.
Retirement is not a steady state of more time for holidays and family. Planning must allow for the onset of part-disability and disability, and costs can rise significantly in the final ‘frailty’ years.
Claims that zero tax rates on superannuation pension funds are a rort are misinformed because they ignore the taxes paid to put money into super, and the social contract that super was designed for.
The financial concerns of those in or close to retirement are focussed on health and housing. Lower interest rates, rising healthcare costs and lifespan uncertainty legitimately compound those concerns.
Retirement planning is often based on average expected returns, average expected cost of living and average life expectancy. But all of these variables can vary adversely, and we need more on the range of outcomes.