Retirement

Deciding to downsize involves a delicate balance between emotional ties and practical necessities. While the financial benefits can be worthwhile, it’s crucial that retirees approach this move with a clear understanding of their priorities and objectives.

A recent global retirement survey by investment manager MFS shows nearly 60 per cent of Australians are rethinking how they’ll retire because of inflation worries – a bigger hit to retirement confidence than any other recent economic shock, including the COVID-19 pandemic.

Calling for a product modernisation framework to remove barriers that stop investors from moving to better investments, the peak body said current rules keep too many people stuck in dated, underperforming products, costing retirees and the government big money.

Unfortunately, reaching the retirement milestone does not free investors from the vagaries of markets, a constant companion. A diversified portfolio and patience are two prerequisites for peace of mind in our golden years – and being prepared for the unexpected is key.

The Australian stock market has seen a stagnation in returns since 2006, leaving many questioning the wisdom of long-term equity positions. For retirees, it’s a particularly fraught issue, as their financial security depends on how these investments perform.

Superannuation is a big part of most Australians’ retirement strategies, but many also choose to augment their savings with other income-producing investments. Here’s a look at how these options can help retirees maintain their preferred lifestyle and protect against risk.

The approach of retirement requires a profound change in how investors approach markets and construct portfolios, including arranging their income needs around three distinct periods of retired life, the financial advice firm’s founders said.

Higher mandatory contributions and increased pension assets helped Australia improve on its 2022 score in Mercer and the CFA Institute’s annual index and move up a spot in the 47-country ranking, but the research cited room for improvement.

Investing in property within a self-managed super fund offers the potential for substantial tax savings, but it’s not for those lacking property market experience. Sophisticated investors should consider several key factors, including costs and compliance, to ensure success within their SMSFs.

While retirement conditions are improving around the world, Australians are retiring later than their global peers, as higher inflation and cost-of-living challenges drive fears over longevity risk in retirement, recent surveys show.

Generation Life, which specialises in tax-efficient investment solutions, recently unveiled enhancements to its lifetime annuity product in a bid to help more investors plan for a dignified retirement without a fear of running out.

The Financial Services Council commissioned the Retirement Income Policy Roadmap to help the superannuation system put greater emphasis on the drawdown phase. Industry leaders say the biggest hurdle is a deeply entrenched fear of running out of money.