So after the COVID March crash
and only partial recovery, a lot of retirees, a lot of people, who are
preparing for retirement are really worried what is going to
happen to my superannuation? What's going to happen to my savings?
How can I prolong life of my pensio fund? So this is the topic I wanted to talk about today so, let's dive in. My name is Katherine,
I am a Certified Financial Planner and my job is all about money and all about retirement. So on this page I would like to share my experience and my knowledge and I hope you will pick up a lot of extra information how to be better prepared for your retirement. So okay let's start how to prolong life of your investments, of your pension, of your super. Number 1 – Improve your starting balance. What I mean by that, is
especially if you're a person who is coming closer to the 50s or maybe past 50s, you are five to 10 years before
retirement or maybe even closer, find out all the specific possible ways,
all the strategies how you can actually increase value of your superannuation, how you can keep on contributing to this.
Not only superannuation is a very tax
driven type of investment environment but at the same time, once you have money transferred to your pension fund, this is where the tax heaven starts, so you really want to create this big nestegg of tax free environment where you keep majority of your savings. So that's number 1 improve starting
balance of your superannuation and your pension.
Number 2 – each year, if you have a pension fund,
each year draw the minimum amount. On the first of July of every single financial year, your trustee will be recalculating value of your fund and will send you a letter advising
what the minimum pension payment is for the upcoming year that you need
to draw. Now, you can draw more than that, but
really if you stick to that minimum year after year, after year, after year –
your pension fund is designed to last you for your life expectancy. So you really are allowing your pension fund to participate in the market for as long as possible, you draw the least possible, therefore, your fund will be able to provide you with ongoing income for as long as possible, make sense.
Number 3 – reduce any capital withdrawals. Again what do I mean by that? I always suggest keep an extra additional account elsewhere, which is for your emergencies. That should not be part of your superannuation, should not be part of your pension strategy. And if you have sufficient funds sitting
there this way you can minimize any capital withdrawals hence, you can prolong life of your pension of your super. And number 4 – improve your fund performance. What do we mean? Well, here create a beautifully
diversified portfolio of investment products that really work together and complement each other. There is a lot of research that you will have to do here, but don't just accept a default fund.
They are there, because the Superfund has to provide you with one but they are not the best form of keeping your money, saving your money and having your money invested for a long time. So you have to really create this portfolio that is very well diversified between different asset, classes, geographically between different investment philosophies, there is quite a lot of
information behind that. But that's the idea so create
diversified investment portfolio. And number 5 –
don't be too conservative. I've created additional video,
so check it out a video that explains longevity and how long are we supposed
to be living in retirement and our retirement is getting long, long, really longer retirement which is fabulous news, providing that we are looking after our
money, and the money lasts us for as long as we do.
So, don't be too conservative because then you're really cutting down on the life probability of your fund. And number 6 – watch out for all those fees and charges. Now, some of them are necessary you have to pay for the trustee of the fund, you have to pay for administrator, you have to pay for fund managers, for their performance and if you have financial planner, please
pay for your financial planner. This is the person that provides you with
strategies, with good diversified portfolio, provides some degree of security of your portfolio, so you don't lose money when the market drops in value, but you can actually participate when the market is rising. Comes back to you with strategies: how to improve your Centrelink age pension for example or any other benefits that the financial
planner may find. You should see your financial
planner at least once a year if you have an annual service agreement.
If you don't then change your financial planner. But yes this is a very very beneficial relationship. But there are other fees, like for example administration fees in your super or pension fund. I can't really figure it out every single
super fund or pension has exactly the same job and yet one will charge you 1%
of the balance of your fund and the other one can do the same job for 0.2%. Go figure. So, there are certain fees that you can reduce or dump altogether.
And there are others that you just should accept, if you want to have the best relationship and if you want to have the best quality of your fund. So those are my suggestions
and I hope it will help you to make sure that your superannuation and your
pension will live as long as you will. If you found that video informative please like it, share it, sign up to my page and hit that little bell so you are
notified every single time a new video is coming out. My name is Katherine and I will be talking to you next week and in the meantime take care – Bye!