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Notice: Function _load_textdomain_just_in_time was called incorrectly. Translation loading for the wordpress-seo domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /var/www/html/wp-includes/functions.php on line 6114 Warning: Cannot modify header information - headers already sent by (output started at /var/www/html/wp-includes/functions.php:6114) in /var/www/html/wp-includes/rest-api/class-wp-rest-server.php on line 1893 {"id":1238,"date":"2022-06-29T07:26:32","date_gmt":"2022-06-29T07:26:32","guid":{"rendered":"https:\/\/horvats.com.au\/backoffice\/?p=1238"},"modified":"2022-06-29T07:26:32","modified_gmt":"2022-06-29T07:26:32","slug":"thinking-retirement-think-again","status":"publish","type":"post","link":"https:\/\/pma-prod.horvats.com.au\/thinking-retirement-think-again\/","title":{"rendered":"Thinking Retirement? Think Again"},"content":{"rendered":"\n

There is so much confusion out there when it comes to trying to understand your best investment strategy in retirement.

Let me tell you, much of this confusion is deliberately caused by those who stand to gain the most by looking after their own profits rather than yours. \u00a0 The rest is a combination of complicated, and forever changing retirement policy as well as a lack of common sense advice and education. \u00a0 There is little wonder that too many retirees are left in the dark or just become resigned to the fact that their fate is not in their hands.

This should not be the case.<\/p>\n\n\n\n

If you simply focus on your own circumstances (you should have a fair idea of what they are), than the first thing to do is ignore \u201cgeneral advice\u201d.

There is no standard formula which will provide you with a solution.

The whole nonsense of determining your risk profile and than somehow allocating you with a suitable pre-packaged solution is just plain lazy, unprofessional and outright reckless. \u00a0 Yet, the majority of retirees will get exactly that type of treatment from their so called advisors.<\/p>\n\n\n\n

To start of with, Australian retirement savings are significantly over exposed to growth assets (mainly local and international shares). \u00a0This is illustrated in the following article;

http:\/\/enews.threeware.com.au\/articles\/get\/1325\/317817<\/a>

I am frustrated by listening to the garbage of how retirees should continue to hold exposure to an unreasonable allocation of growth assets in order to justify wrong advice.

If somebody could rationally explain to me how the majority of retirees who have experienced zero or minus returns over the past five years (have a look at returns for balanced\/default funds to 31 December 2011, where most of this \u201clazy\u201d money sits), should continue to hold their position I am willing to listen.<\/p>\n\n\n\n

The simple fact is, retirees draw income from a fixed source, mainly allocated\/ account based pensions. \u00a0There is no new money going in, so their only chance of retaining\/prolonging capital invested, is by having a positive return on their investments. They must draw a certain amount, it\u2019s required by law and it\u2019s their living money. \u00a0 So, if there has not been a positive return on their investments and they drew out 4-5% per annum and paid fees (typically in the range of 1-2% per annum), \u00a0I\u2019m at the loss to understand how this position is maintainable much less justifiable.<\/p>\n\n\n\n

Many retirees have fared much worse than this. \u00a0They have had negative returns, and are now drawing 6-7% of the current balance to maintain their cost of living as well as continuing to pay the 1-2% in fees. \u00a0 Just to further add to their misery, if they are in receipt of a government pension, their allocated pension payments may be impacting the income test further reducing the government entitlement. \u00a0 This is despite the fact that they are making losses on their allocated\/ account based pension investments.<\/p>\n\n\n\n

And yet, advisors continue to spruik the fact that you may miss out on growth, that you may not keep up with inflation, \u00a0and that historically, the growth allocation has outperformed cash and term deposits and direct bonds.

What history are they talking about? \u00a0Clearly not the past 5 or even 10 years! \u00a0This period for investment purposes may indeed be \u00a0a short time frame for a 20 year old starting employment and with 45 years to retirement. \u00a0It is although, of no value to a retiree.<\/p>\n\n\n\n

Why?

Well because retirees need a secure, constant and reliable income, each fortnight\/ each month\/ each year for the rest of their lives. \u00a0They need to know that their capital investments, which provide them with their income, are secure, accessible and easy to understand. \u00a0They need to believe that the advisor(s) and the products in which they have placed their faith and lifetime savings into, are not exploiting the confusion and lack of transparency associated with this stage of life to gain profits out of their clients losses.<\/p>\n\n\n\n

If after allocating sufficient capital, to secure their future income streams, any funds that remain should by all means have the option of being invested into more adventurous growth assets. \u00a0Even then, the advice should be totally tailored to specific client needs and desired outcomes.

If you are preparing for retirement, or are retired, don\u2019t assume for one moment that you should stay with the advice that was based on financial jargon you did not, and do not fully understand. \u00a0 Get another opinion or two or three until you clearly understand your options and can regain confidence based on reality.<\/p>\n\n\n\n

We look forward to presenting you with our best alternative for your own retirement solution.

Please be advised that our next information night on Retirement Planning will be at Gisborne Golf Club on the 29th of February starting at 6pm.<\/strong>

We will be holding regular presentations throughout the year. \u00a0If you wish to attend or refer a friend, please let us know by telephoning Maria on (03) 93372233.<\/p>\n","protected":false},"excerpt":{"rendered":"