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Stand the test of time It is essential to speak to a professional about the level of funds you will need in retirement and even more important to have a portfolio designed to stand the test of time.
See Portfolio Design and Management in the Wealth Creation link. Portfolio design and management is even more crucial at retirement. The last thing you need in retirement is to be worrying about your wealth being eroded by volatile market conditions and the fear of your retirement money running out early and having to go back to work or rely on the government age pension.
A properly designed portfolio will ideally reduce your risk and maximise your return in relation to your risk tolerance and goals and objectives. See the link effects of outperforming – pension phase in the wealth creation section.
* Based on 2000/2002 life tables.
Structure
Superannuation will ideally play a significant role in providing your retirement income since it is very tax effective and has favourable government legislation. The structure of your retirement funding needs to be closely considered prior to retirement and is very much based on an individual’s situation, goals and objectives. Therefore it is best to seek professional advice.
Prior to and even during retirement you need to structure your investments in a manner to enable you to get the most income from your investments in the most tax effective manner whilst being exposed to the least risk possible.
For example an investment property that may have $400,000 worth of equity may only be providing you with $10,000 worth of income after tax and expenses (not much of a lifestyle). Assuming this investment property is your sole source of retirement funding you may be better to look at investing into different property sectors such as commercial property via unlisted property trusts and/or listed property trusts.
This way you could receive income in the vicinity of $32,000 p.a. and not have to worry about managing your property or whether the tenant is going to pay on time or the concern that you may have to fund some costly repairs/maintenance etc. One of the other major advantages of utilising listed property and/or unlisted property trusts to fund your retirement is that they significantly reduce the tenancy risk.
This is because they have a large number of properties and numerous tenants which, means your income wouldn’t be as affected if a tenant left. Compare this to residential investment property where the loss of a tenant may lead to financial trouble.
Other
- Centrelink planning
- Capital guaranteed pension
- Income streams
- Estate planning issues
CNP Financial Innovation is a corporate
authorised representative of the Australian Financial Services Licensee
WealthSure Pty Ltd. License No 238030. 34 Hasler Road, Osbourne Park WA
6017.
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