Register to receive our free weekly newsletter including editorials.
3 July 2024
Recently trending
Reader: " Finding a truly independent and interesting read has been magical for me. Please keep it up and don't change!"
Reader: "I subscribe to two newsletters. This is my first read of the week. Thank you. Excellent and please keep up the good work!"
Ian Silk, CEO, AustralianSuper: "It has become part of my required reading: quality thinking, and (mercifully) to the point."
Australian Investors Association: "Australia's foremost independent financial newsletter for professionals and self-directed investors."
Noel Whittaker, author and financial adviser: "A fabulous weekly newsletter that is packed full of independent financial advice."
Jonathan Hoyle, CEO, Stanford Brown: "A fabulous publication. The only must-read weekly publication for the Australian wealth management industry."
John Egan, Egan Associates: "My heartiest congratulations. Your panel of contributors is very impressive and keep your readers fully informed."
Reader: "Love it, just keep doing what you are doing. It is the right length too, any longer and it might become a bit overwhelming."
Reader: "The BEST in the game because of diversity and not aligned to financial products. Stands above all the noise."
John Pearce, Chief Investment Officer, Unisuper: "Out of the (many many) investmentrelated emails I get, Cuffelinks is one that I always open."
Reader: "Carry on as you are - well done. The average investor/SMSF trustee needs all the help they can get."
Reader: "Is one of very few places an investor can go and not have product rammed down their throat. Love your work!"
Professor Robert Deutsch: "This has got to be the best set of articles on economic and financial matters. Always something worthwhile reading in Firstlinks. Thankyou"
Scott Pape, author of The Barefoot Investor: "I'm an avid reader of Cuffelinks. Thanks for the wonderful resource you have here, it really is first class."
Steve: "The best that comes into our world each week. This is the only one that is never, ever canned before fully being reviewed by yours truly."
Rob Henshaw: "When I open my computer each day it's the first link I click - a really great read."
Andrew Buchan, Partner, HLB Mann Judd: "I have told you a thousand times it's the best newsletter."
Reader: "It's excellent so please don't pollute the content with boring mainstream financial 'waffle' and adverts for stuff we don't want!"
Don Stammer, leading Australian economist: "Congratulations to all associated. It deserves the good following it has."
Reader: "Great resource. Cuffelinks is STILL the one and only weekly newsletter I regularly read."
Reader: "An island of professionalism in an ocean of shallow self-interest. Well done!"
Ian Kelly, CFP, BTACS Financial Services: "Probably the best source of commentary and information I have seen over the past 20 years."
Reader: "Best innovation I have seen whilst an investor for 25 years. The writers are brilliant. A great publication which I look forward to."
Reader: "Congratulations on a great focussed news source. Australia has a dearth of good quality unbiased financial and wealth management news."
Eleanor Dartnall, AFA Adviser of the Year, 2014: "Our clients love your newsletter. Your articles are avidly read by advisers and they learn a great deal."
David Goldschmidt, Chartered Accountant: "I find this a really excellent newsletter. The best I get. Keep up the good work!"
Reader: "I can quickly sort the items that I am interested in, then research them more fully. It is also a regular reminder that I need to do this."
Reader: "Keep it up - the independence is refreshing and is demonstrated by the variety of well credentialed commentators."
In September 2019, Treasurer Josh Frydenberg announced the Retirement Income Review, with a public consultation paper to be released in November 2019 and a final report to the Government by June 2020. One of the three panel members is Dr Deborah Ralston, who in her previous roles, has written several articles for Firstlinks.
As a general guide to what Dr Ralston may be thinking, we republish an article from 2013. At the time, she was Executive Director of the Australian Centre for Financial Studies (ACFS), which published the Pension Index in conjunction with Mercer. We have often republished past articles by leading authors, accepting that their thoughts may have developed further.
ACFS is now the Monash Centre for Financial Studies, which is part of Monash Business School. Coincidentally, the 2019 Melbourne Mercer Global Pension Index has just been released, linked here, ranking Australia third in the world, behind only The Netherlands and Denmark, as we were six years ago.
The release of the latest Melbourne Mercer Global Pension Index earlier this month once again confirmed Australia as having a world class retirement system, coming in third out of 20 countries behind Denmark and The Netherlands.
In the past, employees lucky enough to be in a defined benefit scheme (and the majority weren’t) were guaranteed a retirement pension traditionally linked to their years of service and salary. But with the advent of compulsory superannuation in 1992 and defined contribution schemes, the onus shifted to the individual to be responsible for their retirement income.
What do these retirees seek? The report identifies the ongoing financial needs of retirees as a 'trilemma' which includes:
Quite obviously, this combination of different needs facing individuals over the course of their retirement means there is no ideal solution. Even an indexed annuity will not meet every individual’s varying financial needs during their different stages of retirement.
This is indeed a complex problem and the best solution for any individual will depend on a range of factors including their total wealth, health and likely longevity, required standard of living, access to the age pension, etc. At the same time, the needs of individuals must be balanced with the public interest so that clear incentives are in place to encourage personal responsibility and avoid over-reliance on the public purse.
For the industry, legislators and administrators, how to solve the trilemma will be the issue in the coming years. So what’s required? The industry needs to provide the right products for an income stream – a portfolio of products that meet individual needs. This portfolio should include features such as:
People need to be educated about retirement, in particular the need to focus on consumption and not investment; it is a quite different phase to the accumulation stage. Research shows that people are typically happier in retirement, but in the immediate years preceding it worry about what will happen and, significantly, often fail to plan for it. The onus has to be on superannuation funds to invest more resources in educating their members about retirement – to literally change their mindsets.
For this to happen the government of the day has to articulate the main objectives of the retirement income system (including the role of the pension). It’s an issue that will encompass social, economic and tax policies and will require strong leadership, coupled with an energetic public debate, to ensure we get the policy architecture right.
Ideally, while the issue can’t be ignored, any policy changes regarding post-retirement income for DC funds will involve an inclusive public debate and a gradual introduction to allow those affected to adjust their expectations and make long-term plans.
Australia has an enormous opportunity to build a world-class decumulation system that gives individuals security and flexibility in retirement. But it will not be easy. The media furore and public angst that preceded the Labor Government’s April 5 statement this year when changes to the tax laws governing superannuation were being mooted highlights the political difficulties. But the longer we delay this debate, the harder it will get – politically, socially and economically.
At the time of writing this article in 2013, Professor Deborah Ralston was Executive Director of the Australian Centre for Financial Studies (now Monash Centre for Financial Studies, which is part of Monash Business School). It publishes the Global Pension Index in conjunction with Mercer. Prior to her appointment on the panel for the Retirement Income Review, Dr Ralston was Chair of the SMSF Association.
Just keep the government out of it and the majority of us will be fine!
Australia has an enormous opportunity to build a world-class decumulation system that gives individuals security and flexibility in retirement, but it's different from the accumulation phase.
Depending on personal circumstances, it may be time to rethink the bias to paying down housing debt over wealth accumulation in super. Do the sums and ask these four questions to plan for your future.
Life annuities is a product with theoretical appeal but it does not gather significant market acceptance. These behavioural reasons need to be addressed before substantial increases in sales occur.
Two commonly asked questions are: 'How much do I need to retire' and 'How much can I afford to spend in retirement'? This is a guide to help you come up with your own numbers to suit your goals and needs.
There seems to be more confusion than clarity about the mechanics of how the new $3 million super tax is supposed to work. Here is an attempt to answer some of the questions from my previous work on the issue.
Washington H. Soul Pattinson is an ASX top 50 stock with one of the best investment track records this country has seen. Yet, most Australians haven’t heard of it, and the company seems to prefer it that way.
We are often quoted life expectancy at birth but what matters most is how long we should live as we grow older. It is surprising how short this can be for people born last century, so make the most of it.
A new report suggests Australian housing is twice as expensive as that of the US and UK on a price-to-income basis. It also reveals that it’s cheaper to live in New York than most of our capital cities.
Here are 10 rules for staying happy and sharp as we age, including socialise a lot, never retire, learn a demanding skill, practice gratitude, play video games (specific ones), and be sure to reminisce.
The best way to lose money in markets is to chase the latest stock fad. Conversely, the best way to build wealth is by pursuing a timeless investment strategy that won’t be swayed by short-term market gyrations.
Australian consumers have held up remarkably well amid rising interest rates and inflation. Yet, there are increasing signs that this is turning, and the weakness in consumer spending may last years, not months.
The nine lessons include there is always a cycle, the crowd gets it wrong at extremes, what you pay for an investment matters a lot, markets don’t learn, and you need to know yourself to be a good investor.
It's that time of year when investors sell underperforming stocks at a loss to offset capital gains from profitable investments. This tax-loss selling is creating opportunities in three quality ASX stocks.
Across the globe, leaders are concerned about the fallout from declining birth rates and shrinking populations. Australia, though attractive to migrants, mirrors global birth rate declines, and faces its own challenges.
Australians are paying almost two billion dollars in credit and debit card fees each year and the RBA wil now probe the whole payment system. What changes are needed to ensure the system is fair and transparent?
Many Australians neglect key retirement planning tools. Investment bonds are increasingly valuable as they facilitate intergenerational wealth transfer and offer strategic tax advantages, thereby enhancing financial security.