With more people living longer, retirement expectations are being reshaped and redefined. Now is the time to consider the financial and cultural solutions for making the most out of the gift of a longer life.
In the final Leaders’ Debate, the Prime Minister asked why Labor wishes to deny a tax deduction for additional personal concessional contributions, reinstating the old 10% rule. What’s the logic of this complex rule?
Labor’s franking credit proposal will reduce the income of many retirees who do not believe they are wealthy. Here’s an exchange with a reader who just wants an answer to “Is it fair?”
The traditional asset based pension is not usually sufficient to provide a total income that keeps pace with inflation, even with the help of the age pension. A real lifetime pension is one way to preserve old age dignity.
The ‘direct investment options’ may have structural advantages for franking credit refunds, but that does not mean SMSFs do not have their own specific advantages. What’s best for the superannuant?
Using the value of home equity built up over many years seems an obvious part of retirement planning, but reverse mortgages have been unsuccessful in Australia. Is it time for a fourth pillar of retirement income?
The main focus in retirement planning should be on the entire return from a portfolio, not just the income generated, and this might help some people in managing changes due to Labor’s franking credit proposal.
Access to regular payments from the Pension Loan Scheme is now available to any property owner of pension age irrespective of whether they qualify for the pension. It can be a valuable extra planning tool.
The design of superannuation is part of a social contract, and people who do not understand the long-term context are often offended that super funds should be tax-free in retirement. Don’t blame Peter Costello.
Amazingly, SMSF pensioners invested in Australian shares will be much worse off under the Labor franking policy than in the ‘bad old days’ when their pensions were taxed.
With almost one thousand people entering retirement in Australia every day, they face different challenges to managing an investment portfolio in the accumulation stage.
While financial solutions to longevity are worth pursuing, it is more important to educate people on what the late-stages of life are likely to deliver, and the time to prepare is now.
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?