Service Tag: Financial Planning

Retirement Strategies

Retirement is just a fancy word we use – but really what most people are talking about is choices.

You want the choice to work or not work, the choice to go on holiday, the choice to help your family or bless others.

Our purpose is about unpacking, building and planning for these options you want in your life, and working different funding and income strategies together to achieve your goals.

The most common tool is superannuation (“super”) but it is just one in a number of tools and strategies to build your income to meet your goals.

Some clients rely a little or a lot on the Centrelink Age Pension (or DVA version), whereas others are sufficiently self-funding.

Building a risk managed portfolio

“Get the best return” – that is usually what people tell us they want from their investments. That is a hard to define goal! We work with you to understand what your purpose is for your nest egg, and then what level of return, and risk, you are willing to accept to achieve them.

Most people want incredible returns with zero risk of loss, unfortunately, if it sounds too good to be true – it probably is!

Investment management is about matching your outcomes and timeframes with the investment options used. If you want to go on holidays next year, you wouldn’t put that money into an investment property! (If that doesn’t sound right to you, either we need to talk more, or you shouldn’t be investing).

Risk and Return go hand in hand

Building a portfolio that matches your goals for long term growth usually involves marrying defensive and lower risk assets with more growth and higher risk assets to blend a suitable level of risk. 

Many people experienced (or have heard stories from) the GFC, and it had a terrible impact on some people’s retirement and lifestyle plans. Most of this is because the risk levels they were taking didn’t line up with their goals for needing to live of the funds. That is why we spend so much time working with you to understand, and develop your goals and education about risk before building a portfolio.

Self-managed super fund (SMSF)

A self-managed super fund (SMSF) is super you run yourself. That means – you’re the boss! You get to make all of the investment decisions, and (importantly) take all of the responsibility!

It’s not for everyone, generally we recommend an SMSF for client who have a purpose to invest differently to what their previous fund can offer – often this is to purchase commercial property for example. If you are wanting to manage your super more closely, you may not need to take this step (consider this the advanced level).

Borrowing to invest in property

Using an SMSF is one of the few ways you can pool your assets together, and borrow to invest in property. There are many promoters of this type of scheme, we do not encourage doing this blindly. There are serious risks and legal considerations, and potential pitfalls in this strategy.

We strongly recommend you get advice from someone not connected with the property or developer, to ensure the strategy is actually going to work out in your best interests (and not just theirs).

Remember – it is far easier to have missed “the big one” and wish you had, than it is to lose it all and wish you hadn’t…