Southern Advisory Financial Planning Sydney
(02) 9524 6711
  • Home
  • About Us
    • Sean Thomas
    • Kade Anthony
  • Services
  • Insurance
    • Life Insurance
    • Income Protection Insurance
    • Trauma Insurance
  • Investment
  • Wealth Management
    • Superannuation
  • Blog
  • CONTACT US

The income reality check

28/1/2015

0 Comments

 
Picture
The start of a new year generally brings with it a sense of optimism and fresh activity. Hope springs eternal for the sports fan with the prospect of a new season while for investors the start of a new year offers similar opportunities and concerns.

Will last year's performance be repeated? Where will next year's strong performers come from?

For the record last year was a pretty good one for a balanced investor - the Vanguard Balanced Index fund delivered returns of 13% - while the average growth super fund returned a respectable 8.6% after two years of double digit returns.

In their more rational, reflective moments sports fans know that no amount of zealous support or one-eyed optimism supersedes a genuine understanding of where your team really ranks. The scoreboard soon enough provides the hard reality check.

For investors that equates to understanding both where your portfolio is invested and where you need to get it in order to fund your retirement lifestyle.

In basic terms it comes down to the value of having a financial plan that takes into account your individual circumstances - in particular your income needs.

People who have their own self-managed super fund tend to be more engaged and aware of where their super is invested than typical super fund members where engagement level is understandably lower.

In many ways the SMSF sector will lead the way as the superannuation system matures because almost half of SMSFs are already in pension mode and increasingly members will be drawing money out of their fund to pay themselves a pension rather than contributing extra to the fund.

Yet the discussion around superannuation still tends to be centred around the level of account balance at the time of retirement.

Perhaps this is just a reflection of the super system not being fully mature but there is a growing sense of urgency that superannuation needs to be a retirement income system more than an accumulation vehicle.

In financial planning terms this translates to having a better understanding of what income your super portfolio can generate and whether that is enough to fund your retirement lifestyle.

Investing for yield is certainly nothing new for many SMSF trustees - it at least partly explains the heavy exposure to Australian dividend paying shares in SMSF portfolios - but that cannot not be the answer for all super fund members.

So when you are looking at your super fund statement showing the account balance for the period ending December 2014 take the time to look at it through the frame of how much income it can provide.

That is super's equivalent of a scoreboard reality check.


Source: www.vanguardinvestments.com.au

0 Comments



Leave a Reply.

    Author

    Sean Thomas - Financial planner 

    Archives

    September 2024
    June 2024
    December 2023
    October 2023
    March 2023
    November 2022
    August 2022
    July 2022
    May 2022
    February 2022
    November 2021
    September 2021
    July 2021
    May 2021
    March 2021
    December 2020
    June 2020
    March 2020
    January 2020
    September 2019
    July 2019
    April 2019
    March 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    April 2017
    March 2017
    February 2017
    January 2017
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    January 2016
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    March 2015
    February 2015
    January 2015
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    March 2014
    February 2014
    January 2014
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013
    April 2013
    February 2013
    January 2013
    September 2012
    August 2012
    July 2012
    June 2012

    Categories

    All
    Insurance
    Investment
    Superannuation

    RSS Feed

Powered by Create your own unique website with customizable templates.