Smart Investing
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The Chinese calendar says this is the year of the dragon. Less auspicious perhaps but for Australian investors this is shaping up as the year of fixed income.
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By taking a few simple steps, super fund members can both boost their retirement savings and legally minimise tax on their super – for themselves and their beneficiaries.
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Self-managed super funds seem set to remain by far the preferred superannuation choice among higher-balance members – particularly those in retirement.
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This is a question that many investors are, not surprisingly, asking themselves. But what might surprise some investors is that the answer is not as elusive as it may at first seem.
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Changes to the ASX operating rules to allow fixed income Exchange Traded Funds (ETFs) to trade on the Australian market will open a new means for investors to efficiently, conveniently and inexpensively diversify their investment portfolios.
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News & Commentary
Super trouble for women 12 Mar 10
As federal politicians debate over paid parental leave, the plight of women''s superannuation savings has been highlighted once again this week with the release of a report, Superannuation Savings Gap for Women, authored by superannuation consultants and actuaries Rice Warner.
The report, commissioned by the Investment & Financial Services Association (IFSA), presents a sorry picture that cannot be reinforced too many times – particularly given the rapid ageing of Australia''s population and the widespread inadequacy of retirement savings.
The issue of women withdrawing from the paid workforce for a period to raise children and the inadequacy of their retirement savings are indelibly linked. And that is yet another reason why the current parliamentary debate over parental leave is so interesting.
In painstaking detail, Rice Warner sets out how and why women typically will end their working lives with much lower superannuation savings than their male counterparts.
The combination of interrupted working lives, typically lower pay than men doing the same work, and the financial impact of caring for children following divorce take a tremendous toll on the ability of many women to save for retirement.
Women not only enter retirement with much lower average super balances than men, they really need more super than men to allow for their great longevity.
Rice Warner''s report presents some fascinating scenarios or case studies, illustrating in stark dollar terms how women''s super is really handicapped. Read the report (PDF).
There seems little doubt that the state of women''s retirement savings will become an increasingly hot issue during 2010.
In coming weeks, Smart Investing will examine some innovative ideas being put forward to assist women to boost their super savings.
* Written by Robin Bowerman, Head of Retail at Vanguard Investments Australia.
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