Consider this your ‘planning for retirement tool kit’.
In relation to shares or super it is the daily movements in the share price of the underlying investments. They move each day and minute that the markets are open because it is a free market.
A good way to think of it is the lowest price someone is willing to sell their shares for. That is what the purchaser is paying.
Most movements in share prices come from outside events from the world in the short term and over the medium to longer term they should come from the characteristics of the company.
If I asked our retirees 10 years into their retirement what they wish they knew/did earlier, the most common answers would be:
Let’s break this down into a few categories:
If I asked our retirees 10 years into their retirement about when to retire, most would say that they should have done it years earlier.
When is right for you though?
You need to do some planning before you retire. BUT, how?
Firstly, I would love to hear from our retiree community as to the changes they’re seeing within their own communities.
What shifts have we as a firm noticed over the past few years? When Covid hit and lockdowns were implemented, the majority of the population felt isolated and the retiree demographic lost a couple of prime years for enjoying this important life stage. Depending on where retirees lived and the rules in your particular area, not to mention personal health status’, some retirees were able to emerge from lockdown sooner than others. We saw the majority jumping straight back into their original plans, making up for lost time – which was great to see!
The short answer is yes, I think going forward it would be in households’ best interests to base their spending habits on there being a slowdown. People will need to review their cash flow and change their spending habits from what they’ve been used to over the last few years.
The million-dollar question – how much do we need in retirement?
Obviously, there is a not a one answer fits all approach that can be provided as there are so many different factors that need to be considered on an individual bases.
It’s been a month since our last show and inflation continues to be a big issue. However, there has been a halt to rising interest rates for now.
Freight cost has also continued to drop and remain low and building companies are struggling under the huge increase in wage costs. Materials have stabilised but wages are now an issue; we have seen lumber back down to 387 after a spike to 1,500, which means we’re finally back to pre-2021 prices.
Governments are still trying to either stop or slow spending, or increase taxes. In Australia they will cease the rebate for incomes up to $120,000.
Most commodities have decreased in the last 12 months and we believe that mortgage stress in Australia could be on its way once we see many households coming off fixed rates towards the end of the year.
See below for further market commentary and graphs.
It has been a big month since our last show.
Inflation continues to be a big issue along with rising interest rates. The Government is still forced with trying to either stop or slow spending or increase taxes.
The main talking point though at the moment is around superannuation changes. The government has managed to unsettle Australians about super and just like trying to curve inflation, sometimes governments need to do what is less popular. Spend less of all our money!
The Keating government introduction of compulsory superannuation passed in 1992, initially at 3.0% of Australian wages and now at 10.5%. This has been very successful and is arguably the envy of retirement savings around the world.
Balanced funds can have negative returns but it is important to remember that they are longer term investments.
We have collated some interesting facts and statistics about last year and in reviewing these it certainly was a year with many unknowns and ups and downs…
General advice warning:
The information contained in this report is information only and makes no recommendation or gives any opinions. Accordingly, it is not financial product advice and should not be relied upon as financial product advice.
Is 2023 going to be the year to get your financial world in order?
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