If you’re already retired or on your way to retiring, have you been obsessively checking your portfolio balance and dreading the next piece of news that might cause it to dip further? Or have you been keeping up with the news as you usually do, but confident that your portfolio will largely weather the volatility it is currently experiencing?
If you nodded at the former, it’s a good indicator that you may need to revisit your asset allocation; it’s likely that it is no longer aligned to your risk appetite and thus unlikely to achieve the goals you’ve set out in the time horizon you have.
If you said yes to the latter, good on you – you’ve likely set yourself up well. But whether or not you’re feeling comfortable with how your portfolio is doing, it is important to regularly think about the risks that you face as a retiree (or a soon-to-be-retiree), and put in place strategies to mitigate them.
Without a regular pay check to counterbalance capital losses, retirees inevitably feel it more when market volatility is in play. But while you cannot control the market and what it returns, you can control your discretionary spending. Temporarily reducing your spending could help alleviate financial stress through this momentary dip. And spending plans can resume once markets are back in the black.
Inflation continues to be a hot topic but the risk it brings is nothing new. Planning for inflation should be part of your investment strategy. Also don’t get caught out during your retirement planning process – using ‘real returns’ rather than ‘nominal returns’ is important when punching in the numbers.
Australians are living longer than we ever have. According to the Australian Bureau of Statistics, the average person can now expect to live past 81 if you’re male, or 85 if you’re female. You should plan for your retirement savings to last you at least 16 years and possibly up to 30 years, assuming you retire at 67. And if you’re retiring before 67, plan accordingly. Don’t forget to factor in expenses to account for health issues as you age.
History has shown that investors who remain invested in the financial markets despite troubling headlines are rewarded when the market eventually picks up. As such, maintaining discipline and focusing on the long-term will help you navigate the years ahead.
If you’d like to discuss your retirement goals, call us on 1300 79 80 38.
If you would like assistance getting your accounts under control as we approach the end of financial year, call us today on 1300 79 80 38.
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At Assure Wealth we specialise in helping busy, successful families structure their finances to achieve greater wealth and financial peace of mind.
Disclaimer: The information provided on this website has been provided as general advice only. We have not considered your financial circumstances, needs or objectives and you should seek the assistance of your Walker Lane Pty Ltd Adviser before you make any decision regarding any products mentioned in this communication. Whilst all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly neither Walker Lane nor its related entities, employees or agents shall be liable on any ground whatsoever with respect to decisions or actions taken as a result of you acting upon such information.
Assure Wealth Pty Ltd ABN 31 965 466 780 Corporate Authorised Representative no. 1244817, Patrick Casey Sub-Authorised Representative no. 1244748 of Walker Lane Pty Ltd ABN 70 626 199 826, an AFSL holder No 509305.