March 10, 2016

Sequencing risk: the order of things

As financial advisers, we talk a lot about risk, so what is sequencing risk? Let’s begin with an example… Jennifer and Sue each contribute $20,000 per year to their superannuation funds for 10 years. They both earn an average return of 5% per annum, after tax and fees, and from Years Two to Nine they earn identical returns each year. The only difference is that Jennifer’s portfolio returns 8% in the first year and -8% in the last year; whereas Sue’s returns are -8% in Year One, and 8% in Year Ten. This doesn’t seem like much of a change, […]
February 25, 2016

Mortgages, personal debt and retirement

Ideally, we would enter retirement with our home mortgages paid off and completely free of any other kind of debt. That would give us the capability to use our retirement savings to finance (or help) finance our standard of living in retirement. Yet many retirees are, of course, reaching traditional retirement ages with outstanding mortgages and other debts. And often these retirees may decide to use at least part of their super to fully pay off their debts, reduce debt or to direct part of their super pensions to keep making repayments. Other debt-reduction options include remaining in the workforce […]
February 11, 2016

Financial planning for women

While we may be stating the obvious by saying there are distinct differences between men and women, when it comes to money, there definitely are! It has never been more important for women to obtain personalised financial advice. Consider the following – 84% of single parents are women; 52.1% of professionals in Australia are women; more than one-third of business operators are women; at least 80% of women will spend at least a decade on their own; women are nearly four times more likely to reach age 100 than men; women make up 54% of all people aged 65 years […]