A dynamic approach to retiree spending and drawdowns

Here's a critical question for retirees and those nearing retirement: How much are you intending to drawdown and spend each year from your retirement savings? Historically-low yields, expected muted portfolio returns and growing life expectancies can make this a particularly challenging question. Many retirees try to balance the competing priorities of maintaining a relatively consistent level of annual spending while increasing or preserving value of their portfolios to finance future income...

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Dealing with the 'housing wealth effect' – to your advantage

Are you feeling wealthier, less wealthy or somewhere in between? You may be experiencing what is sometimes called "the housing wealth effect". Movements in house prices, up and down, can affect how we feel about the state of our wealth and our willingness to spend, suggests a Reserve Bank paper* published several years ago. Under this theory, if house prices are up, we may tend to feel wealthier and willing to spend more on consumer goods including new cars. And when house prices are weakening,...

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An important conversation

None of us likes to consider our own mortality. For our older loved ones, it’s an even more confronting topic and difficult to discuss. When Lindsay became ill, his family’s priority was to support him through his treatment, and keep him positive and as comfortable as possible. Typical of his generation, Lindsay had always been very private, never sharing personal information – not even with his nearest and dearest. After he passed away, it dawned on the family that nobody knew whether...

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Reverse mortgages: Short-term gain, long-term pain

Residential property has long been a major store of wealth for average Australians. The home remains the primary assets for the majority of people and the property market - particularly in major cities - has generally been kind for those who were in the market over the past decade or so. But with the ageing of the population, the percentage of wealth locked up in residential property ($500 billion in home equity is held by people over 65) is both a blessing and a challenge. According to the last...

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