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.
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With almost one thousand people entering retirement in Australia every day, they face different challenges to managing an investment portfolio in the accumulation stage.
The current system is complex and inequitable, and those most affected by aged care anomalies are often least able to understand the consequences.
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.
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.
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.
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.
Life expectancies have increased dramatically since the nineties, but the uncertainty is forcing retirees to live too frugally. The super industry is switching its attention to the drawdown phase to find better solutions.
The 2018 Budget features cuts to personal income taxes and changes to retirement income policies. There’s plenty of money on infrastructure to boost jobs and ease congestion.
The 2018 Budget has opened the possibility that the Pension Loans Scheme will become a more popular part of retirement income planning.
After decades of intense work in financial markets, including Asia-wide responsibilities, a sabbatical walk along Spain’s Camino led to an unexpected mix of superannuation insights and dealing with death.
It’s become common to claim there is no incentive to save more than $500,000 because of the loss of age pensions and possibly franking credits. But these arguments overlook the way super is supposed to operate.
Most people in retirement will have three financial goals in the decumulation stage to take account of the uncertainty of health, longevity and markets, and here’s a framework to help.