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Saturday, 5 December 2020
Recently trending Five ways the Retirement Review points to new policiesGraeme Shaw on why investing is at a pivotal momentRetirement Review gives strong views on hoarding of super11 key findings on retirement dreams during the pandemicBank scorecard 2020: when will the mojo return?
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Such is the concern among unions and Labor about Government plans to undermine superannuation that an 'Emergency Summit' was called this week, and pioneer Bill Kelty evoked a social commitment.
Super counts for only 20% of the wealth of Australians. For retirement incomes, most younger people today will still receive most of their income from the age pension when they retire in three decades’ time.
The family home is the bedrock on which many retirement plans sit, with special tax and social security benefits. Many products generate an income stream from the home to make retirement more comfortable.
Most Australians are comfortable in retirement provided they own their homes. We’re failing retirees who rent but we also need to include more of the family home in the pension assets test.
During the GFC, in the face of rapid falls in super balances, the minimum drawdowns required for pensions were reduced by 50% to help preserve overall retirement savings. It's time for a repeat.
Two-thirds of the responses to our reader poll say the family home should be included in some way in the age pension assets test, but the comments show it is an emotional and divisive subject.
Do people who have worked hard all their lives really have an 'entitlement' to an age pension? Somewhere along the line, has any government made a solemn promise to Australian retirees?
Super is reducing reliance on the age pension for the majority of people entering retirement. Most newly-retired Australians are not accessing the age pension at all, and only 25% of 66-year-olds are drawing a full age pension.
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 has opened the possibility that the Pension Loans Scheme will become a more popular part of retirement income planning.
A reader asks whether people can stay off the age pension by reducing the amount of money they live on in retirement but not drawing on their capital.
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.
The Retirement Income Review goes much further than an innocent-sounding 'fact base', and is sure to guide policies in the run up to the next election. It will change how we think about retirement incomes.
Company profits have not improved for many years but higher valuations have been driven by falling rates and excess liquidity. Conditions do not suit a value and contrarian manager but here are some opportunities.
The Review includes some profound findings, most notable that retirement income should include drawing down far more capital. Expect post-retirement products to proliferate under a Retirement Income Covenant.
A mid-pandemic survey of over 1,000 people near or in retirement found three in four are not confident how long their money will last. Only 18% felt their money was safe during a strong economic downturn.
Banks severely cut dividends in 2020 but are expected to improve payments in 2021. History provides clues to when the banks will return to their 2019 levels of profitability, but who is positioned the best?
It's not only that 60 is the new 40, but 80 is the new 60. Many Baby Boomers spend up in retirement and are less inclined to leave a nest egg to their children. The ways wealth transfers will affect all investors.