Madness of crowds
Recently industry fund Rest announced that it is considering investing its members’ money in cryptocurrency. We think that’s a bad idea. Here are our five reasons why.
Spending in retirement
There are lots of uncertainties when it comes to retirement. While most Australians are working longer, we’re also living longer, so our retirement is longer. In fact, for some of us, retirement can span a period of 30 or 40 years.
A lot can happen in 40 years and it can be difficult to know how much we can afford to spend. How do we balance spending today, and still be responsible for the future?
Secret to Happiness
Over the course of our careers we have helped hundreds, maybe even thousands of local people plan for retirement. Most settle into retirement successfully and enjoy higher life satisfaction as they age. But we have also seen some retirees really struggle with retirement, and never recover their sense of identity outside of their career.
So, what’s the secret to living well in retirement? And is there anything we can do to increase our happiness?
Return of Inflation
Return of inflation
The news that inflation grew more than expected in the September quarter has spooked retirees and homebuyers equally. And rightly so; inflation is bad news for retirees who are trying to balance spending today, while being responsible for the future. And for homebuyers, the return of inflation may mean increasing interest rates and mortgage stress.
So, what has caused the inflation spike? And what will happen if prices continue to rise? More importantly, what can pre-retirees and retirees do now to protect themselves from inflation risk?
Why we all need a Plan B
Over the course of our careers we have met thousands of pre-retirees and retirees. During that time, we have observed changing attitudes to retirement.
Today, most of us are planning on working longer; the average age we plan to retire is now 67. And almost all of us want to transition into retirement, reducing our work hours over time.
But foresight may be vain. According to the Australian Bureau of Statistics “Retirement and Retirement Intentions” research, in reality, the average age at retirement is around 55.
Most of us don’t get to choose the timing of our retirement. It’s forced on us by circumstances and that’s why we all need a plan B.
Evergrande: A timely reminder about risk
Just a fortnight ago, most of us hadn’t even heard of the Evergrande Group. But recent developments have changed that.
Just in case you missed it, Evergrande is a Chinese property developer that has run out of cash. It is probably going to default on its debt obligations. The big problem is, Evergrande is massive and its finances are entwined with financial institutions right across the world.
Hope is not an investment strategy
With local and International share markets at record highs, now might be the time to check in on your investments.
Independence Day
On Monday, 2 August we took a stand and started our own Australian Financial Services Licence.
We are calling it Catalpa Pty Ltd. By self-licensing we can free ourselves from real and perceived conflicts of interests. It enables us to officially provide unbiased advice.
Our reasons for seeking independence are simple. We believe that professional financial advisers should serve their clients and their clients only. There should be no other money flows or vested interests.
Nothing to see: Making sense of the inflation spike
If you’ve been watching the financial news over the past week, you will know that Australia’s inflation rates have now peaked to a 13-year high.
What does that mean for retirees, and should we be doing anything to protect the purchasing power of our nest eggs?
This time its different
Retirees are right to be concerned about the economic impact of the lockdown in Greater Sydney. But that doesn’t necessarily mean we’ll see a repeat of the devastating market freefalls of March 2020.
Dumb things we do
Human beings are hardwired to make poor decisions when it comes to investing. Our natural tendency is to buy at the top of the market cycle and sell at the bottom. Unfortunately, that quickly destroys wealth.
The good news is that financial planning advice can help. Advisers provide structure and discipline that can overcome our natural inclinations and emotions.
Super outcome: Changes finally law
New arrangements for super will mean less members’ money wasted in fees and more accountability for member outcomes.
Upsize your super with a downsizer contribution
Booming house prices in the Central West are presenting unique opportunities for retirees looking to cash in and boost their super.
This month’s Budget announcement that the home downsize provisions are being extended means that younger retirees can benefit with more tax-free super when they need it most.
Federal Budget: What, me worry?
This year’s Federal Budget is a socially responsible, big spending one aimed at embedding the economic recovery. With interest rates already set at emergency levels, it makes sense for Treasury to step up and stimulate the economy.
But that big spending will come at a cost to future generations as the ballooning debt will eventually need to be repaid.
Finding purpose beyond work
Talk to any super fund and they will say that anyone approaching retirement should boost their super balance, but in our experience, there’s more to a successful retirement than having lots of money saved up in your super account. And there are better ways for a pre-retiree to prepare than to just boost their super.
Wealth effect: Future’s so bright, I gotta wear shades
We have some good news. The International Monetary Fund (IMF) has upgraded its global growth forecasts for 2021 to record levels. This news, combined with rising share markets and booming local house prices, should have a positive impact on the confidence of retirees.
Lower for longer: Outlook for interest rates
Despite a bigger than expected economic rebound, interest rates are likely to stay at record lows for the foreseeable future. So, what does that mean for retirees who are trying to live off their retirement savings? And what should they be doing right now to make the most of the economic conditions?
Fork in the Road
Most Australians think that superannuation was introduced by Paul Keating in the early 1990s, but it wasn’t.
Some Australian super funds have existed for more than a hundred years. And if you’re fortunate enough to be a member of an old scheme, it pays to understand your options.
Red herring: Three reasons why Big Super is wrong about retirement
Big Super has launched an expensive and frightening advertising campaign aimed at pre-retirees. Industry Super Australia is trying to tell us that if super contributions don’t increase in the next few years, we’ll all have to sell our homes just to survive in retirement. But’s it’s a red herring argument. They’re distracting from the facts with an irrelevant and false narrative. Here are three reasons why Big Super is wrong.
A rising tide lifts all boats
Most economists believe that 2021 will be a good year for Australian shares.
We have snapped back from the COVID recession, with economic growth of 3.3 per cent in the September quarter. There are several vaccines being rolled out globally in what is the biggest vaccination campaign in history. Across 51 countries, 2.44 million doses a day are currently being administered. Here in Australia, we are looking to start our domestic program next month.