Retirement

With many economists expecting the Reserve Bank to start cutting interest rates in early 2025, returns on term deposits could feel the pinch. Private credit is an alternative, but those pursuing this investment option will need to do their homework.

A slowing economy has prompted S&P/ASX 200 companies to keep a lion’s share of their earnings by tightening shareholder distributions, with fund manager Martin Currie identifying the resources sector as a real cause for concern regarding future income.

Funeral bonds offer a host of potential benefits, including preferential tax treatment and capped exemption from the Centrelink assets test. But not all funeral bonds are created the same.

Super funds are offering less and less advice services, despite members making clear that they need it more than ever. Fund advice has a relatively attractive price point, SuperRatings’ Kirby Rappell explained, but funds are struggling to explain its value.

The meteoric rise of industry funds has earned them a rightful place at the top of the superannuation food chain. But their standing is not a given, and the failures are starting to mount.

Retirement’s approach requires a profound change in how investors approach markets and construct portfolios, including arranging their income needs around three distinct periods of retired life, the financial advice firm’s founders said.

A joint review conducted by ASIC and APRA was scathing of funds’ collective attempts to meet their new legal obligation to help fund members plan for retirement, and urged them to “address, with urgency, the gaps in their approach”.

There are a range of factors that will determine the fees a member will pay. The difference could have a dramatic effect on the final balance of a retiree’s nest egg.

While the focus of the advice industry groups has very much been around making the day to day lives of those in the industry easier, the likes of the AFCA, Vanguard and several law firms have offered insight into the impact on the consumer.

2022 has marked just the fifth financial year of negative returns since the SG became compulsory in 1992. This should not be a surprising result.

Bringing oversight to a multi-trillion dollar sector was important, but the regulations are far from perfect, with many suggesting they effectively direct industry funds toward an indexed approach, or alternatively, don’t appreciate the nuances of investing for the very long-term.

As share markets fall, superannuation research houses are predicting a negative financial year for both balanced and growth superannuation funds.