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.
Australian retirees’ access to dividend imputation refunds justifies a bias towards Australian equities in retirement, and the loss of refunds will have significant portfolio and income implications.
The National Seniors Australia (NSA) survey reveals that retirees want access to regular and stable income, even at the expense of lower returns. The need to preserve capital reduces tolerance of losses.
The 1 July 2017 changes have caused huge shifts in SMSF assets out of pension mode, and Labor’s proposed franking credit refunds policy is a further hit to self-funded retirees.
Increasing longevity poses many challenges, including staying financially secure over a long retirement period. Retirees and governments must stay on top of healthcare costs.
It is useful to think of your financial life and psychological adjustment in five stages: a family and career phase, pre-retirement, close to retirement, just past retirement, and then lifestyle downsizing.
Preferences revealed by actual investing behaviour are often different to preferences stated in surveys. Financial planners and super funds should use newer analyses that helps understand the discrepancies.
The ALP imputation policy, even with the Pensioner Guarantee, hurts self-funded retirees who are not pensioners. Ten organisations have formed the Alliance for a Fairer Retirement System to oppose the policy.