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Retirement income promise relies on spending capital

The Government has taken the next step towards encouraging retirees to live off their capital, and from 1 July 2022 will require super funds - even SMSFs - to address retirement income and protect longevity risk.

Three key outcomes needed from the Retirement Income Review

The Review can stress the value of risk adjusted returns to assist retirees in understanding retirement income products, and clarify definitions of growth and defensive strategies.

Schemes designed to deal with longevity risk

With the availability of large pools of retirees, the law of large numbers will start to see a predictable distribution of lifespans around the mean, allowing for longevity risk products. An important development.

Overcoming loss aversion in retirement income

Loss aversion means some people avoid annuities because a premature death may lead to a loss of capital, but lifetime annuities with death benefits aim to address this problem.

Five challenges for post-retirement products

Enthusiasm for post-retirement investment products is growing, and the Government has just appointed an advisory group, but there are many reasons why the industry has not yet finalised the best outcomes.

The 3 key principles of retirement income

Designing an adequate retirement income system is not only about new products, but personalised assessment of circumstances and good financial advice. There is no one-shot, silver bullet solution.

A defining year for super requires your input

An appeal for interested parties to contribute to the government's discussion paper on post-retirement products, now called 'MyRetirement' solutions, to be offered within the superannuation system.

Leading superannuation members to the Promised Land

The future leaders in superannuation will be those who successfully shift from an accumulation-phase focus to a whole-of-life approach, and there are many different ways of getting there.

CIPRs are coming and that’s exciting

Comprehensive Income Products for Retirement, or CIPRs, are almost a reality and there is much excitement around what this means for superannuation and retirement outcomes.

Retirement income products - what's ideal?

The superannuation industry has grappled with how to offer attractive retirement solutions, but lessons from overseas suggest some form of risk sharing to cover variable life expectancy will be needed.

The comprehensive income product for retirement

The idea behind comprehensive income products for retirement, or CIPRs, is to provide retirees with a product that can generate a good income, manage risks and remain flexible. We need a scorecard to understand them better.

Most viewed in recent weeks

Meg on SMSFs: Clearing up confusion on the $3 million super tax

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. 

Welcome to Firstlinks Edition 566 with weekend update

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.

  • 27 June 2024

Australian housing is twice as expensive as the US

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.

The catalyst for a LICs rebound

The discounts on listed investment vehicles are at historically wide levels. There are lots of reasons given, including size and liquidity, yet there's a better explanation for the discounts, and why a rebound may be near.

The iron law of building wealth

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.

How not to run out of money in retirement

The life expectancy tables used throughout the financial advice and retirement industry have issues and you need to prepare for the possibility of living a lot longer than you might have thought. Plan accordingly.

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