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 
Wednesday, February 06 2008

CPA Australia released their third Superannuation - The Right Balance report on Tuesday.  The report provides some pleasing news in that it suggests that the superannuation system in Australia has improved significantly since their first report was commissioned in 2001.

 

However the report provides reminders for the general public that:

  • the recent changes apply mostly to people on average or higher incomes,
  • adequate retirement savings will only be a reality where individuals have 40 years of compulsory super contributions and can make voluntary savings, and
  • the majority of Australians will have less income in retirement than they are used to during working life.  (Media Release, 5th February 2008)

These conclusions drawn by the authors of the report provide a reality check.  Our viewpoint is that there are three key lessons hidden in these findings for everyone:

 

  • Every extra dollar that can be saved, through investing with lower fees and smaller tax consequences (i.e. reduced levels of trading), will provide a more comfortable retirement.
  • Every extra dollar that can be earned through increased investment returns will provide a more comfortable retirement.
  • The earlier people prepare for retirement by putting away extra savings the better off they will be in retirement.

 

I know this is not rocket science but it is a message that needs to reiterated.

 

Of course these lessons do not solely refer to the superannuation environment.  If you want/need access to surplus funds before retirement than use an investment portfolio, with the proviso the funds do need to be put away rather than eaten up by general expenditure!!  Of course, for many, superannuation is the most tax effective place for these investments.

 

Basically what we are saying is don't just leave your superannuation / investments sit ideally especially if it is in a high fee environment.  Get it into an environment that will further benefit your situation through lower fees and strategic investing to reduce tax consequences.  Similarly, keep a careful eye on your asset allocation.  The longer away you are from retirement (or more appropriately from your life expectancy as your superannuation / investment assets will need to last until then), the more comfortable you should be in exposing your investments to growth assets such as Australian shares, international shares and listed property.  Historical analysis shows that over the long term these assets will provide greater returns than cash and fixed interest.

 

If you would like more information on these issues or want a "Superannuation Stress Test" please get in contact.

 

Regards,

Scott Keefer

Posted by: Scott Keefer AT 08:21 pm   |  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