August 18, 2016

Taking more than you need from your nest egg?

A common way to measure the sustainability of retirement income is to calculate an annual withdrawal rate – the amount of income as a proportion of a retiree’s total capital. For instance, drawing an income of $4,000 a year from savings of $100,000 is, of course, a four per cent withdrawal rate. And a leading topic of discussion in the retirement services industry is identifying an optimal drawdown rate so that a retiree’s capital lasts as long as possible. Recently-published research from Vanguard in the US goes a step further by looking how much of annual retirement drawdowns by retirees […]
August 11, 2016

Loans and encumbrances; a pension minefield

For most people, being debt free in retirement is a priority. Others find the concept of ’good debt’ in retirement less stressful. From an age/service pension perspective the correct structuring of good debt is important to ensure that any entitlement you may receive is not adversely affected. When it comes to the Social Security Act – loans and encumbrances can be complicated and, in some cases, a little illogical. It is very important to understand that the taxation rules relating to debt are not necessarily the same as social security rules. For example; real estate investments can be considered. So […]
August 11, 2016

Is retirement a sustainable proposition?

Over the past week or so I have been reading a couple of articles that painted a rather gloomy outlook for retirees in the coming years. Most Australians will be reliant on the government age pension to meet all, or a part, of their income needs – at least some time in their retirement. That is an inescapable fact. A small number of the population will remain self-funded retirees – for example; having no reliance on government funded income support (except for the Commonwealth Seniors Health Card). However for the most part, at some stage in retirement, we will need […]