FAQs (click to open/close)
How much income will I need when I retire?
To maintain your current lifestyle, and allowing for events like downscaling, you will need something like 75% of your current family income per year. So for example, in today's money, a family on $85,000 per year would need around $956,250 assuming a retirement age of 65 and a life expectancy of 80. Depending on how many years you have to go on your mortgage, you may need to plan to pay out the mortgage.
Why do you say I need to protect my income - I've got insurance and super?
Your income is your greatest asset. Yet insuring yourself may cost less than insuring your car. It's a sad fact that many Australians will receive more money for their damaged car than for themselves after a major car accident. And don't forget, Income Protection is generally tax deductible.
How much super is enough?
Well your contribution should depend on your age and income, but on retirement you will need enough investments, including super, to give you a similar level of income as in the first question. If you have non-super investments these may make up for a lower amount held in super, but the two together should provide the annual income required multiplied by the number of years to be spent in retirement. Again, you may need to cover paying out your mortgage.
What does the 'ideal' investment portfolio look like?
Really the secret is to have a mix of investment types. The 'old wisdom' is to have at least three major types of investment: securities/shares, property and guaranteed return investments (eg Government bonds). What suits an individual investor will depend on a number of factors such as assets/liabilities, income, risk tolerance and the person's stage of life.
Do I need life insurance if I'm covered in my super?
The question is how much cover is in place and under what conditions it would become available to you. Many super funds trust deeds do not allow for funds to be released, even if you were in dire financial need. So if you were to suffer a permanent disability and be unable to work, your super insurance would not necessarily be available until retirment age. The second aspect to this is that there may not be sufficient cover to guarantee your lifestyle. Many people don't even know under what circumstances they are covered or for how much! The average lump sum insured in super funds is just $70,000.
Should I use managed funds as investment vehicles or do it myself?
Many factors underpin this decision. How much time you have, whether you want to keep some or all of the portfolio under your own control, your understanding of the stock market and trading, etc. It's a personal choice. Some prefer to have most of their funds in professionally managed funds, while keeping a relatively small budget to experiment with their own (perhaps higher risk) shares. In general managed funds will have more opportunities to offset risk and achieve their projected growth targets than a single operator.
I can't afford to lose my retirement nest-egg. Are there investment options for me?
Many retirees and investors were stung when the stock market plummeted recently and are feeling badly burnt! The answer is 'Yes, there are'. Several product platforms are available which allow potential losses to be limited. These options can be excellent for people in the Wealth Management/Wealth Protection stages of their investment life. Call me to explore further!
Did you know...
That one in three men and one in four women will be diagnosed with cancer in the first 75 years of life?
That 345,000 new cases of cancer are diagnosed in Australia each year?
That two out of five people will suffer a critical illness before they reach 65 and that we are 2.5 times more likely to suffer a critical illness than die before the age of 65
That only 14% of consumers have life insurance?
That of the working population, one in six men and one in four women are expected to suffer a disability from the age of 35 to 65 that causes a loss of 6 months or more from work?
That 89% of consumers have motor vehicle insurance but only 2.5% protect against trauma?
That around 1.7 million Australians aged below 65 are living with a physical disability?
That only 6% of consumers protect arguably their most important asset, their income?
(Information provided on this site is indicative only and does not constitute advice as it does not take into account your personal circumstances or requirements.)
