Smart Investing
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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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It seems that some SMSF trustees won't learn their lesson. They keep running into trouble with the tax office in its role as regulator of self-managed super.
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The number-crunchers at the Australian Bureau of Statistics have come up with the actual number of Australians who had fully retired but have since either returned to work or are planning to look for work.
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The chief executives of Australia’s large super funds were recently asked to nominate the five big issues now facing their funds. These superannuation bosses – participating in the National CEO Thinktank held during the annual conference of the Association of Superannuation Funds of Australia (ASFA) – came up with a list that is worth a close look.
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News & Commentary
The other end of the scale 26 Jul 10
Last Wednesday, Smart Investing looked at the struggle of Generation Y to kick-start their savings.
Those who entered the workforce in the past decade or so – in other words, Generation Y – need look no further than many of the baby boomers who are in their final years before retirement or in early retirement for telling illustrations of the need to save.
Sadly, the savings of numerous baby boomers are inadequate to provide a reasonable standard of living in retirement.
The Australian Securities and Investments Commission (ASIC) has an excellent, straight-to-the-point feature on its website for baby boomers who intend to retire soon.
ASIC’s tips do not contain any surprises. These are just commonsense measures that many near-retirees would no doubt neglect.
Here are a few of the tips:
- Try to boost super savings during whatever time is left in the workforce.
- Prepare a retirement budget before retiring.
- Begin comparing retirement-income products. And think about what diversification of assets would be most-appropriate for you, given your personal circumstances – including needs and tolerance to risk.
- Consider obtaining quality financial planning advice. This can be a time when expert advice is particularly vital.
Other practical tips from ASIC include: find out about any social security entitlements, watch for scams – particularly targeting retirees, and understand the implications of reverse mortgages (financial products that enable retirees to drawdown on equity in their homes).
Much of the debate about super to date, understandably, has tended to focus on the accumulation of retirement savings. Yet with the rapid ageing of the population, post-retirement concerns are increasingly gaining prominence.
* Written by Robin Bowerman, Head of Retail at Vanguard Investments Australia.
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