Skip to main content
#
A Clear Direction
rss feedour twitterour facebook page linkdin
home
Financial Advisor Brisbane - AdviserScott Keefer - A Clear DirectionBuilding Investment PortfoliosPortfolio Management ServiceUpdated ContentContact Us - Brisbane Financial Planning
A Clear Direction Financial Planning logo

 Financial Happenings Blog 
Friday, May 10 2013

The Association of Superannuation Funds of Australia (ASFA) has just released new data regarding indicative costs in retirement relating to the period ending 31st of March 2013.  The media release suggests that health and energy costs rose over the March quarter whilst food and leisure goods and services fell.

I believe the information provided by ASFA can be useful in 2 key ways:

- assisting clients to determine what their budget should be when reaching retirement
- providing a gauge of inflation for those preparing for or in retirement

The study includes indicative budgets for 4 groups as follows:

A single person with a modest lifestyle                $22,641
A single person with a comfortable lifestyle         $41,169
A couple with a modest lifestyle                         $32,603
A couple with a comfortable lifestyle                  $56,317

When using the breakdown of budgets provided care should be taken in seeing whether they fit your requirements.

In terms of inflation the latest data suggests there has been only slight changes with the two comfortable lifestyle budgets actually falling slightly.  However the annual change was between 2.16% and 3.17% due to a large jump in costs in the September quarter of 2012.

This inflation data can be really useful for assisting with determining what level of total return will be required to meet the goal of making sure assets last long enough through retirement years.

Using this data you can add a required drawdown rate - say 5% - and add the level of fees you are paying - say 1.25% - to work out what you need your portfolio to be generating in total returns - 9.25% using the example data.

This can then be a really useful starting point to see what style of portfolio you require to reach that total return target.  In particular how much risk needs to be incorporated into a portfolio.  In particular, if you are targetting a 9.25% total return, you should be considering what style of portfolio has provided that return through history with the least amount of volatility (risk).

For anyone contemplating or in retirement taking a look at the ASFA Retirement Standard data could be a really valuable use of time and a great starting point for retirement planning.

Regards,
Scott

Posted by: AT 09:21 am   |  Permalink   |  Email
 
Scott Francis' articles in the Eureka Report 
Request for Information 
If you have questions, or would like more information, please go to our Contact page and leave your name and contact information.

Plan Well, Invest Well, Live Well! Financial advice providing a clear direction

A Clear Direction Financial Planning and Portfolio Management ABN 85 147 572 870

Level 19
10 Eagle Street
Brisbane QLD Australia
Ph: (07) 3303 0269
Email: scottk@acleardirection.com.au

Authorised Representative (398444) and Credit Representative (403292) of FYG Planners Pty Ltd AFSL/ACL 224 543.

ASIC - Financial Advisers Register

All content of this website is copyright © A Clear Direction Financial Planning Pty Ltd, 2017

FYG Planners Pty Ltd & A Clear Direction Financial Planning Privacy Policy