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Thursday, 27 February 2020
Recently trending Are you caught in the ‘retirement trap’?The power of letting winners runTony Togher on why cash isn’t just cashNAB hybrid: one says buy, one says sell, you decideWatch your SMSF’s annual return this year
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Two different articles cover a recent report on the attitudes of Australians towards retirement. What should be a enjoyable life stage is feared by many, and they fail to plan and work towards it.
Retirement planning will become increasingly complex in the face of trends in home ownership, wealth dispersion, life expectancy, health and aged care costs, work patterns and pension dependency.
Changes implemented by super reforms since 1 July 2017 have brought greater incentives for spouses to equalise their superannuation balances, including tax and estate planning benefits.
When more than half of retired Australians restrict their spending to less than the age pension and fear running out of money more than death itself, they may be denying a better lifestyle for themselves.
What do many of Australia’s top experts in superannuation and retirement planning think the government should focus its policies on? A long article but with many interesting ideas.
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.
An SMSF can buy business real property and lease it to a member and the laws and processes are clear. The rent paid is classed as income from the investment rather than a contribution from the member.
In traditional economics, utility theory assumed that investors work off probability-weighted outcomes. Prospect theory can better explain actual investor behaviour and is a better tool for designing retirement plans.
Aged care is a specialist subject, but financial advisers need to have strategies for their clients before it is left to a family member to step in with different views on affordability and what standard of care is needed.
Important retirement planning lessons benefit from actual experience, given that life does not follow a predictable pattern and many people can’t work forever. Planning is vital but so is making adjustments.
A retirement financial plan must consider longevity, health and liabilities, making it far more complicated than the simpler investment strategy in the accumulation phase.
Annuities now come in different structures, overcoming many of the past objections. Despite low interest rates, they have become more popular with senior investors based on cash flow, social security and tax needs.
Our retirement savings system is supposed to encourage financial independence but there is a ‘Retirement Trap’ due to the reduction of age pension entitlements as assets and income rise.
Handling extreme winners is a complex task. Conventional wisdom such as “you never go broke taking a profit” often leaves a lot of money on the table as strong growth stocks continue to run.
An active manager of cash and fixed interest funds can achieve higher returns than the cash rate through a selection of other securities while managing both liquidity and income for clients.
Differences of opinion make a market, and hybrid specialists disagree on the likelihood that NAB will call one of its hybrids early. It makes a major difference to the expected return on NABHA.
The best way to preserve your SMSF’s favoured status is to make sure the fund’s annual return reaches the ATO on time. There are new rules this year that every SMSF trustee should know.
Investors worried about an overvalued sharemarket and low interest rates on term deposits and bonds are focusing on alternatives. What are they and how are they used by leading asset allocators?