29th Jun 2016
Brexit: is your retirement in danger?
Brexit: is your retirement in danger?

Brexit has left many people wondering about travel and passports but what about the really important issue? We ask Noel Whittaker for his take on Brexit and your retirement.

Has Brexit ruined your retirement? The good news is that your retirement is not ruined due to forces beyond your control, but you do need to understand that every investment decision you make has a downside as well as an upside. If you choose to put the bulk of your money in cash, you will never have a worry when stock markets fall, but you will be taking the high risk that you will outlive your savings.

I strongly believe that shares will continue to be the best asset class over the coming years, but that anyone who invests in shares needs to understand that their prices are volatile, and it's normal to have four negative years in every 10.

In the next few months there will be much talk about Britain in the news, but bear in mind the media tends to focus on the negative. If you watched the 6pm news on Friday you may well have been scared. We were told that millions had been wiped off our superannuation as markets fell, oil prices plunged, and the British pound had suffered one of its biggest losses in history. Yes – this was all true, but they did not mention that when the All Ordinaries index fell three per cent, it had simply taken back the gains of the week before. Similarly, Japanese shares were down eight per cent on Friday, but they had risen five per cent over the previous five days.

If your money is in superannuation, it's almost certainly going to be spread between cash, property, cash bonds, and local and overseas shares. Usually when shares fall, bonds rise – this gives you an inbuilt safety buffer.

And it's simply not practical to convert your assets to cash and then hope you will be lucky enough to pick the bottom of the market. History tells us that this is impossible to do consistently.

My advice to worried investors is to make sure you have at least two years planned expenditure in cash so you are never forced to sell when the market is having one of its normal downturns. Then, hopefully, you can sleep at night knowing your portfolio has time to enjoy the inevitable recovery.

Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance. His advice is general in nature and readers should seek their own professional advice before making any financial decisions.

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    COMMENTS

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    Swinging voter
    29th Jun 2016
    10:46am
    Whenever there's a downturn, older people have far less time to spend waiting for the inevitable recovery. As for Brexit. The media and polls all got it wrong again. Never underestimate the quiet majority. Maybe unscrambling a rotten egg will take a while with a few ups and downs. For me, the expected initial turmoil of Brexit will be worthwhile in the longer term. At long last, they got their country back. Money just doesn't buy some things.
    Tom Tank
    29th Jun 2016
    11:57am
    Nice to see "Swinging Voter" your support of Scotland's argument for their independence.
    Swinging voter
    29th Jun 2016
    12:20pm
    Hi Tom. I'd just say good luck to Scotland when the dictators across the Channel force them to change their currency to Euros. I doubt the stoney-faced overpaid bullying unelected Brussels personnel will set up a UK equivalent pension fund for them either.
    When push comes to shove I very much doubt Scotland will get serious about breaking up the United Kingdom. Nicola Sturgeon - goodness what a self-important blathering bandwagon attention-seeker. Although I am a woman, I've got no faith in women who occupy top political jobs. They're mostly all talk what do they call it: all arse and no class.
    Swinging voter
    29th Jun 2016
    12:21pm
    Sorry to re-post. My husband just said the Europeans can send all their immigrants to Scotland.
    niemakawa
    29th Jun 2016
    2:36pm
    There is massive discontent in the whole of Europe. The citizens of Europe have had enough of the Dictators in Brussels and MERKEL. Brexit is a defining moment in history and the groundswell will take root all over Europe. The EU Political elite have underestimated the will and resolve of the people and hopefully The EU in it current form will be dismantled and get back to basics, Trade.

    http://www.express.co.uk/news/world/684131/brexit-eu-referendum-tsunami-france-italy-netherlands
    MICK
    29th Jun 2016
    3:49pm
    Europe is a mess niemakawa but you can hardly call Merkel a dictator. Dictators control the media (the coalition?) and close down dissenting operations (ABC and SBS?). And then dictators jail and kill people who talk against them.
    Merkel has done none of the above....but the eurozone is a tightly regulated group and that probably needs to change. Had Britain been able to control its borders then it would likely have remained.
    niemakawa
    29th Jun 2016
    4:03pm
    Mick, in fact Merkel has restricted free press in Germany; she demanded that Facebook not allow any perceived derogatory remarks or comments about Muslims; She ignored the violence and sexual abuse of not only women but young girls and boys that were committed by muslims in Germany. She has instructed ( commanded) that her citizens are not allowed to rent out rooms ( AirBnB is one example) She says they are needed for "new arrivals". She demanded that other EU States must not put up fences at their borders.She takes unilateral action on EU matters without consultation with other Member States. The Greece/Turkey solution on illegals, another example. In my view her actions are those of a dictator.
    Swinging voter
    29th Jun 2016
    4:23pm
    niemakawa, I do agree on all of the points made. I thought Merkel is wholly responsible for the last straw in the minds of the British due to her encouragement of hordes of people onto unseaworthy boats, flooding into Europe where host taxpaying citizens now feel displaced, frightened and unworthy in comparison with what is being made available for foreigners, many of whom will not wait too long before making religious, cultural and social demands. I saw a math chart that showed how many muslims now have EU citizenship plus young men recent arrivals - when they take wives and breed 3-5 children - well Europe will be, as promised, conquered. As for pensions I bet those drones sitting around the big auditorium laughing/heckling Nigel Farage. I smile to think it was mostly one man's persistence this time who rid the UK of all those foreign dictators. Hallelujah.
    niemakawa
    29th Jun 2016
    4:29pm
    Without Nigel Farage there would have not been a referendum. Cameron took the bait and risk to get re-elected in 2015. He misjudged the people and lost. That is democracy. The EU project is most certainly not a democratic institution. Britain is well out of it. Yes there may be challenges ahead but you cannot put a price on FREEDOM.
    MICK
    29th Jun 2016
    5:34pm
    Not aware of any of this niemakawa. Are you on the ground in Germany?
    We were in Germany a year ago and rented an apartment. No problem. Not a "room" though so not sure about that one.
    Not too sure if Merkel could enforce compliance though (I'll make some enquiries) and the young women you mentioned caused a huge outcry in Germany and the rest of the world so was not hushed up.
    I am going to do a bit of work with this one as I have a vested interest in the information you provided. Thanks.
    niemakawa
    29th Jun 2016
    7:18pm
    Mick, I was in Europe for an extended period 2015 and know people in Germany. Much of what was occurring at that time was was seen by the public but not reported in the German press. t. You may have heard what happened in Cologne, many women were sexually assaulted by immigrants, but Merkel sided with the migrants and made no public apology to the victims of these horrendous crimes. Most of the reports came from outside of Germany as the press and media there were severely hindered by The Government to inform the German people and beyond of the facts. There were reports of immigrants (men) masturbating in front of children in public swimming pools. Again no action taken by the German Government. Merkel even spoke on German TV and said that Germans should go to church more often instead of complaining about muslims and Islam. Surely these reports were shown in Australia?
    MICK
    29th Jun 2016
    8:59pm
    Only the one about molestation and rape on New Year's Eve, unless I missed it.
    niemakawa
    29th Jun 2016
    9:12pm
    Mick there are many incidents in Europe that have received little attention by the mainstream media here in Australia. You will have to go to European websites to get more information on what is happening there. RT news I would suggest, they have TV broadcasts here in Australia 2 or 3 times a week. DW ditto.
    Radish
    30th Jun 2016
    7:49am
    On a couple of occasions on this site I have tried to draw attention to what was happening in Europe (Germany in particular) but was derided by some. I was a scaremonger.

    We need to wake up, take note, and thankfully we have at last taken back control of "our" borders. How long this will last will depend on the outcome of the election. We know that there are parties/people that would like open borders and quite prepared to let anyone and everyone in.
    MICK
    30th Jun 2016
    9:35am
    I have put the questions to German relos and I await their response. We'll see if the allegations are legitimate in the next couple of days niemakawa. Cheers.
    marls
    1st Jul 2016
    3:39pm
    mick
    there was hundreds of post re the rapes in europe on fb Germany, sweden, denmark and not to mention hundreds of violent clashes being shown my family reside in the alps in italy and they never allow their children to be unescorted as all the invades want is sex, sex, sex
    Old Geezer
    29th Jun 2016
    10:56am
    The biggest negative I can see out of Brexit is lower interest rates in Australia for longer.

    Big positive is that my future trip to the UK just got a lot cheaper.
    MICK
    29th Jun 2016
    3:53pm
    Tell me when you are going and I'll get you a (one way) ticket. One less troll is always a good thing.
    Anonymous
    29th Jun 2016
    5:53pm
    labor mick was that comment necessary, it just showed your true nature, you can't help yourself, an other laborite disciple shooting from the hip.
    MICK
    29th Jun 2016
    9:00pm
    Ja wol mein Fuhrer. Could not resist it.

    29th Jun 2016
    11:01am
    Q: What was one of the factors causing the referendum in the first place? A: IMMIGRATION!
    Doesn't this tell you something? To say any more on this site would be to have my comment removed.
    sidney70
    29th Jun 2016
    12:01pm
    Make no Mistake Fast Eddie,We are going down the same path. I have no doubt that our Government has plans down the track to unite with Asia and China the same as the EU. This I hope will be a wake up call. I agree that the Refugee,Immigration is a major problem. We can not see it but if you go to the Sydney Western Suburbs you will see the problem. We in Australia live in the best Country in the world with free handouts. Why would you not want to come here.
    Anonymous
    29th Jun 2016
    12:44pm
    sidney70, what would law enforcement authorities do if public streets and thoroughfares were blocked to vehicular traffic by praying Baptists, Christians, or Jews? Yes, you guessed it, so why do others get to do it without the slightest interference? Is this equal justice for all? Does my comment deserve to be deleted because I have stated a true situation? We will see. Watch this space.
    niemakawa
    29th Jun 2016
    3:16pm
    You must not give into PC, say what is on your mind and if any comment is deleted then keep trying. For instance you should have used the word muslims in your last post, because isn't that what you mean?
    Anonymous
    29th Jun 2016
    3:30pm
    You betcha!!
    MICK
    29th Jun 2016
    3:58pm
    Seriously guys I think BOTH sides understand that voters do not want to be flooded with more economic migrants crying 'refugee'. Of course now we are seeing the Immigration Department scandal where people are coming by plane rather than boat. You cannot tell me nobody knew and that the current government was not told. I actually am wondering if there may have been political donations flowing into Liberal Party coffers from the criminals making the big bucks. We'' all see in time I guess.
    niemakawa
    29th Jun 2016
    4:06pm
    Mick I am also wondering if there may have been political donations by human traffickers flowing into Labor coffers from these criminals making big bucks.
    Anonymous
    29th Jun 2016
    4:36pm
    It wouldn't surprise me in the LEAST if BOTH of you (Mick and niemakawa) were right. These people wouldn't hesitate at ANYTHING to fill their pockets while in a government position. Pathetic!
    Grateful
    29th Jun 2016
    4:42pm
    UK been there officially since 1800, now destroyed without a bullet being shot. Major victory for someone!!!!!!
    MICK
    29th Jun 2016
    5:35pm
    Labor is currently not in government niemakawa. The coalition is and the coalition would be in a position to not act. Not Labor.
    Migrant
    29th Jun 2016
    11:02am
    Good advice Noel.especially having at least two years expected outgo readily available in CASH. If you chose a Bank which offers a deeming rate you should match the Centrelink rates, but watch this as the Bank may decide at their option to break your contract and not to match changes in the deeming rates. The other advice I would give, unless you want to spend time on your shares, is to spread your share investments, by investing in AFI or a similar quoted LIC , and let the experts look after the day to day investments at a very low expense rate.
    Interesting how the Scots voted against independence because the proponents did not have a clear plan of what they would do if they won, and did the same again with Brexit as the 'leave' team had no idea how they would proceed if they won. Yet the English voted to leave without knowing what the repercussions would be !
    Migrant (glad he is an Aussie, and does not hold an EU passport.)
    Old Geezer
    29th Jun 2016
    11:07am
    I hold about 3 years planned expenditure in cash or cashable products.

    29th Jun 2016
    11:11am
    Yes, great advice, except how the hell do you plan and have two-years' cash in reserve when the government changes the rules without warning, dividends collapse without warning, and putting substantial money into cash smashes your income totally because you have to get better than 7.8% return on EVERY dollar to be as well off as if you didn't have anything at all! What a bunch of MORONS we have deciding policy in this country!
    Old Geezer
    29th Jun 2016
    11:20am
    Any money in the bank is cash or cashable so it is not hard to do at all.

    Those latest capital notes for the 2 of the big 4 banks have returns greater than 7.8% Rainey. So it's not hard to get better than 7.8%.
    Anonymous
    29th Jun 2016
    11:37am
    Good rate Old Geezer I have a fair go at the stock market but these bank notes do worry me a little as the banks can do what they like with them at any given time and there capital value does fluctuate a bit, just like shares.
    Old Geezer
    29th Jun 2016
    12:16pm
    I'd rather own the bank shares myself but I did buy a few. With such low interest rates and looking to go lower I expect them to list at a premium so with enough premium I'll probably take a stag profit.
    HarrysOpinion
    29th Jun 2016
    12:17pm
    Dear Rainey,

    'TRUST US", we'll change the rules as we see fit for the benefit of the upper class elite people, corporations and foundations that support us financially. We don't care about the rest. If you have a problem with this, deal with it on 2 July.

    Have a fabulous day.

    The Current (Morons)Government.
    Old Geezer
    29th Jun 2016
    12:25pm
    HS you have got it very wrong. They don't change the rules for the upper class elite etc. They make rules and the upper class elite etc pay their learned friends to learn those rules and find ways they can benefit from them. Anyone can do this by learning the rules and playing the game. It is only when the government realises too many people have learnt these rules and are not playing as intended that they change the rules again. It is a cat and mouse game.

    Unfortunately by the time the masses work it out it is all over.

    No matter who rules this will always happen.
    HarrysOpinion
    29th Jun 2016
    1:16pm
    Whatever, Old Geezer. The masses have had a lot of time to educate themselves about all the political parties rather than to listen to the dribble that's been coming out contending politicians recently.If they vote in LNP watch the turmoil and misery for the next 3 years or less. If they vote Labor watch the interesting socio-economic times and probable 'f--ck-ups'. If they vote for the Greens, "God save the Nation" because the Greens will not !
    Anonymous
    29th Jun 2016
    1:48pm
    It IS for pensioners who have struggled through major disadvantage and educational deprivation, Old Geezer. This is the point the privileged decision-makers and the selfish who endorse their policies miss. My mother wouldn't know what a ''capital note'' is, let alone how to invest in one, and at 90, I don't think she should have to learn in order to protect her tiny little nest-egg of savings accrued through 9 decades of frugal living with the goal of leaving something to her disabled great-grandson.

    This society has become self-serving and uncaring in the extreme, and totally unreasonable in it's expectations of the disadvantaged.
    Old Geezer
    29th Jun 2016
    2:04pm
    LNP sounds like the best of a bad bunch then.
    Old Geezer
    29th Jun 2016
    2:36pm
    Sounds like more excuses Rainey. I now of many people in their 90s who are very involved in investing their own money. One fellow I know the doctors tell me that is all that keeps him alive. Age is no barrier to knowledge.

    Society has not become self-serving and uncaring. People have become very lazy and blame everything and everybody but themselves for anything that goes wrong in their lazy lives. Most now fail to even think for themselves and follow others at their peril.

    Many people would call me disadvantaged but I'm not about to let that stop me doing the things I need to do to get the things I want in life.
    Oldman Roo
    29th Jun 2016
    3:19pm
    Old Geezer , While I can only say Good luck to your fortunate position of good health generally . What you are not considering is that many of advanced age , or even younger , no longer have the mental and physical capacity to making astute decisions and suffer illnesses quite often due to having worked hard all their life . I know of many who just struggle to stay in their home and their life revolves around frequent visits to their Doctors , Specialists or Hospitals .
    So go and tell them their misfortune has something to do with being lazy , self serving and uncaring .
    I have been involved in aged care in my time and can only consider your generalising attitude as an insult to many elderly .
    Old Geezer
    29th Jun 2016
    3:54pm
    Ha ha I find that ironic as I am writing this from a hospital bed. Don't I know about one's life revolving around doctors, specialists and hospitals. However my misfortune doesn't stop me from managing my own affairs. I consider you comments an insult to me as it sounds like you expect me to be like your stereo type of the elderly.
    MICK
    29th Jun 2016
    4:13pm
    Cash is cash Rainey. You will have an issue withdrawing any amount approaching $10,000 as banks do not want people hording cash. I recently did this got the third degree.
    Given the precarious nature of the financial system don't think your money is your money if the system tanks. There are already bail in arrangements set in place and banks can and will simply take a big part if not all of depositor money to recapitalise themselves.
    We live in unsure times but there is one thing certain: banks are 'too big' to fail and governments will not stop the Cyprus solution from happening here or in any other western country.
    Old Geezer
    29th Jun 2016
    4:24pm
    Mick I don't think there is any trouble getting Aussie dollars but I hear there is a big shortage of British pounds at our banks.
    Oldman Roo
    29th Jun 2016
    4:41pm
    Old Geezer , Following replies by others to your ignorant point of view , I now regret having wasted my time just to get another example of hogwash . I am sure the Liberals must be proud of you .
    Old Geezer
    29th Jun 2016
    4:50pm
    No Oldman Roo you have just stereo typed me into a hole where I just didn't fit and you now shift the blame back to me by called it hogwash. People need to take responsibility for their own actions and not blame others.
    Oldman Roo
    29th Jun 2016
    5:32pm
    Old Geezer , If you have not figured out yet , just what hole you fit into , by the various responses you had from other participants , I think there is no point in further discussion .
    MICK
    30th Jun 2016
    9:32am
    Did not want to weigh in here but I am thinking Oldman Roo may be referring to your troll activity. Along with your alter ego (Frank) it is pretty obvious your comments and often not comments but rather propaganda. As I have been saying for some time: argue issues on the merits. Not BS from party HQ. People see through that.
    Old Geezer
    30th Jun 2016
    11:56am
    Mick I am simply on a different level of thinking as I don't have a welfare mentality. I do agrue issues as I see them which is odds with how you see them. You agrue from a personal point of view of what's in it for me whereas I am not concerned with what's in it for me but what's in it for the my kids and grandkids future.
    MICK
    30th Jun 2016
    5:18pm
    Funny Old Geezer. With a week to go to the election you SUDDENLY appeared. The White Knight for welfare reform.
    If you were concerned about future generations you would be speaking against giving a huge corporate tax cut at a time when we have debt. YOU KNOW as well as I do that average Australians are going to get tax increases to pay for this. Tell me about your grandkids.

    29th Jun 2016
    11:14am
    The only thing which could dampen my retirement would be ill health or death for my wife or me, all the others have been covered. The REAL repercussions of Brexit won't be felt for 2+ years and the effects in Oz will be minimal. People here would be wiser to concentrate their concerns on what is going to happen here this Saturday, and not in the neighbors backyard.
    Fliss
    29th Jun 2016
    2:20pm
    Well said Fast Eddie!!
    MICK
    29th Jun 2016
    4:19pm
    You forget the contasion effect Eddie. Perceptions often are far worse than the issues themselves.
    niemakawa
    29th Jun 2016
    4:24pm
    Mick maybe you mean FEAR rather than perceptions. Politicians , media, bourse, all panic even when a small ripple hits the shores. All for one reason to undermine the people.
    MICK
    29th Jun 2016
    9:02pm
    More likely to get investors to panic and sell out at the wrong time and the wrong price. The herd is easy to spook, and as we have seen easy to control through the media.
    niemakawa
    29th Jun 2016
    11:20am
    BREXIT will prove to be a Godsend for investors in time. The concept of the EU project is flawed, dangerous and evil. Its intention is to control every member State of The EU: One Central Government in Brussels; One tax system; All laws set by Brussels; All States must use the euro as its currency; An EU army ; The EU Superstate will determine where refugees are relocated; The EU ( Superstate) a Dictatorship in the making, which would undermine the Global economy as well as World security.

    Australia and British relationships will continue and trade opportunities abound for both Nations.
    Swinging voter
    29th Jun 2016
    12:22pm
    Couldn't agree more. Same type of cross-Channel oppression, just a different, more subtle modus operandi.
    jeffr
    29th Jun 2016
    1:59pm
    I also agree, the biggest mistake was to join the EU and be ruled by faceless politicians whom they did not elect and who were not British.

    The British now have a chance to rectify this mistake and prosper without being told what to do by other countries.
    Fliss
    29th Jun 2016
    2:21pm
    Agree niemakawa!
    MICK
    29th Jun 2016
    4:21pm
    At least there have been no major wars in Europe for a long time.
    There are benefits too.
    Swinging voter
    29th Jun 2016
    4:37pm
    Mick what a sad thought that the benefit of joining a union comprised of sabre-rattling entities is to stop major European wars. That's like a house-owner leaving his front door unlocked because there would be an even greater mess if someone broke down the door.
    I can't imagine Australia joining a union headquartered in Beijing, with Singaporean, Japanese and Vietnamese un-elected commissioners having regulatory control over trade, immigration, even taxes for God's sake! And paying them a massive amount of money for the privilege. And us with no ability to vote them out.
    MICK
    29th Jun 2016
    5:39pm
    You seem to have some sort of 'union' phobia Swinging Voter. I understand you cannot handle not being in control but people living in cities could (and do) say the same thing about national governments. In the end we need a government which logically and sensibly makes decisions for the greater majority or we remain a feudal system warring with each other with no end ever in sight.
    Steff
    29th Jun 2016
    11:22am
    Scott Morrisons out gunning for pensioners again
    Jilly B
    29th Jun 2016
    11:45am
    Steff, Thanks for making the discussion political!! Some people cannot help themselves. As far as having 2 years ready cash available in the bank that is OK as you can withdraw a certain amount each day/week/month etc. If this was not possible then how would people plan extensive travel and other large expense items.

    A dangerous trend has been established with some older people who keep quite large quantities of cash at their residential premises. Some not all of course tell others including family that they have it and as we know others tell others etc. As people get older they sometimes forget that telling others can be in some instances dangerous even family. Think about it!
    niemakawa
    29th Jun 2016
    11:58am
    Jilly B . And if people on a pension are able to put some aside so they have 2 years ready cash available, then no doubt Centrelink will include that as an asset. The trend as you put it will probably grow overtime. Having said this the Government of the day will surely provide a form of voucher / card system to all pensioners, which can only be used to purchase "certain" items. Probably any residual balance on the card will be forfeited and clawed back by the Government. All major parties are guilty of treating pensioners with contempt.
    HarrysOpinion
    29th Jun 2016
    12:29pm
    niemakawa - Imagine if the people demanded that the government go on a voucher/card system to spend on "certain items" according to an approved taxpayer's Budget that the government can not exceed under any circumstance and any surplus is distributed back to the taxpayers year in year out. Contempt breeds contempt, sometimes it breeds people's revolt.
    Rae
    29th Jun 2016
    3:23pm
    Pensioners on Centreling fortnightly payments don't need two years worth of money set aside as they get paid each fortnight.

    It is those living on investment income that need the cash backup.

    The article was about those living on their own savings and whatever income they can generate from it.

    Those on a fixed income, from the taxpayer, do not have the same level of risk and the worry of losing capital.
    MICK
    29th Jun 2016
    4:23pm
    Pensioners have been made targets because they are an easy mark. They are old and not wanting a fight, they often are suffering the onset of dementia and they are set in their ways. The perfect lemmings who will complain but not act. I know I am not speaking for all though and that is understood.
    Rae
    30th Jun 2016
    7:59am
    I think you are correct MICK.

    I doubt Brexit will really make that much difference.

    Markets are already experiencing huge volatility levels and uncertainty. World debt levels are unsustainable and all Central banks can think to do is throw more debt out there for the speculators to gamble with.

    Into this mix stumble compulsory Australian savings.

    I'm more concerned by the oil fiasco. In our just in time economy we are about 4 days away from chaos. Bankrupting industry after industry in a speculative orgy ,out of control, is no way to fight deflation or the liquidity trap.

    And what do economists know?

    I love John Maynard Keynes 1927 quote, "We will not have any more crashes in our time."

    Compulsory savings was a way of forcing saving for retirement except that you can blow the lot on a world cruise if you want. It treated PAYG earners as idiots. Business and self employed don't have to put 9% of income into markets when any sane person would be out of them and waiting for the dips.

    All the past beliefs about market behaviour are mucked up now.
    What happens at negative yields on bonds when stocks tumble and liquidity disappears again?
    MICK
    30th Jun 2016
    9:28am
    The short answer is consider buying some gold. I cannot ever work out why people buy bonds with a negative yield. Better to stick your cash under the bed.
    Grateful
    29th Jun 2016
    11:35am
    Hey, isn't superannuation supposed to be to provide security and peace of mind when you are at your most vulnerable? Why the government provides huge incentives with taxation benefits to encourage people to invest as much as they can into their super funds to reduce the demand on the welfare system?
    Yet, here we have ANOTHER warning about the vagaries and RISKS associated with the whole system. Add to that the recent warning from the well known financial adviser, Scott Pape, when he sends out in his newsletter, "The Ticking Time-Bomb in Your Super Fund".
    Why should there be such "vagaries" and volatility and "ticking time bombs" in your super fund when it is so vital to society and the economy?
    Don't such words and warnings define superannuation as we know it as being fundamentally flawed??
    The vast majority of contributions into super funds go into real estate and managed funds (predominantly in equities) yet, they are both highly vulnerable to external forces which could (and DO) impact quite horrifically on those investments. Even (safe??)term deposits have been smashed as reliable income producers.
    We have just seen the impact of what really is quite a minor hiccup, but, caused immediate panic, on top of just 8 years ago an almighty crash of all markets which went so close to a repeat of the 1929 depression.
    Think of those people who retired with a lump sum before 2008 after contributing for so many years into their super to see the value of their fund be decimated. People had organized their entire budgets and lifestyle on those funds only to see them dissipate so quickly and their lifestyle altered irreparably.
    Superannuation, by definition, should and must be much more secure than that and probably be based upon the same principles as public servants' superannuation where the payments are guaranteed by the government. Surely a system can be devised along those lines and even similar to the old style "endowment" insurance policies? But, something has to be done to ensure that retirees are not subjected to such frightening risks which are certainly having a very detrimental impact on retirees' stress levels. The ONLY people who are currently guaranteed to make money out of the current system are fund managers and banks!!!!
    niemakawa
    29th Jun 2016
    11:38am
    Buy GOLD.
    Old Geezer
    29th Jun 2016
    11:46am
    People who retired in 2008 would have seen their investments more than recover now and have been paid a lot of dividends along the way. They would have earned a lot more than those who left their money in bank deposits.
    HarrysOpinion
    29th Jun 2016
    12:52pm
    People had organized their entire budgets and lifestyle on those funds only to see them dissipate so quickly and their lifestyle altered irreparably.
    - So the government is in the business of stuffing up people's plans, it empowers the government when it does.

    People who retired in 2008 would have seen their investments more than recover now and have been paid a lot of dividends along the way.
    -That's if they dared to invest on the stock market. Many retirees are not gamblers despite the fact that investing on the stock market is in favour of the odds rather than gambling against the odds, for instance, such as pokies, casinos, gallops, trots sports betting etc. How many retirees have been taken to the cleaners by fraudulent financial advisers working on commission for Macquarie Bank, CBA, ANZ and NAB? It's a can of worms that the Liberals don't want to open with a Royal Commission into Banking practices and unconscionable conduct.
    Old Geezer
    29th Jun 2016
    2:42pm
    I could never understand how people could invest their life savings into something they could not understand. Some personal blame has to be levied here because they let greed take over from their better judgement. That is the only way I can understand their actions in doing this.
    Grateful
    29th Jun 2016
    2:48pm
    Come on. Not everyone wants to preserve their lump sum into perpetuity so as to maybe get some pats on the back from their beneficiaries.
    Some people say that that super nest egg is MINE and very hard earned and budget to not only use the dividends to support their retirement but actually SPEND some of it on those little luxuries that they have missed out on while bringing up their families and saving for their future. How are those European river cruises paid for??
    Life IS too short, but, when your super fund buys CBA shares for $95 with a yield of less than 5% and now see them at $71, how do you think they feel?
    That is a 25% LOSS OF CAPITAL in anyone's language. Cash investors in term deposits for example have seen their income drop by over SIXTY%.
    And, who gets the cream, the untouchable banks and fund managers!!

    So let’s talk about the GFC, and the heart palpitations and wealth destruction it caused retirees who had all their savings tied up in the one very unbalanced bucket.

    Guess which country suffered the biggest losses on retirement savings during the GFC?

    Iceland.

    Guess who was the second biggest loser?

    Australia.

    Yes, the Organisation for Economic Co-operation and Development (OECD) found that our superannuation funds lost a larger share of their members’ funds than any other pension system in the world -- with the exception of Iceland.
    And you can GUARANTEE that these negative blips in markets WILL continue. How can retirees with modest funds in their super (the vast majority) sleep easily not knowing what happens overnight??? Not everyone has a financial buffer and nerves of steel. Most rely on the advice of their banks and fund manager and you know who's interests they have most at heart!!!!
    Old Geezer
    29th Jun 2016
    3:06pm
    If you can't sleep easily at night and stand negative years then why are you invested in these assets?

    It matters little to me if CBA is $95 or $71 as long as I get that nice dividend every 6 months. If you have enough cash in reserve to meet you expenses for next 2 or 3 years then the volitity of shares should not be a concern. A loss is only a loss when you sell. If Australia had second biggest losses then a lot of people must have realised those losses.

    All a bit odd to me as I thought we got through the GFC very well compared to many other countries.
    MICK
    29th Jun 2016
    4:26pm
    Superannuation was sold as the dream. But it is controlled by vested interests nibbling away at the perimeter and the blue sky figures rolled out by salesmen were then money as opposed to now money. They never mentioned something called inflation.
    ex PS
    30th Jun 2016
    8:23pm
    Gratefull, I can only speak for myself but I managed to retire at 55 an am a self funded retiree. My main source of income is superannuation, and thanks to a few decades of stability in that market I will probably not need to take a part pension, although I would not hesitate to take one if needed.
    For 75% of my working life I was on average wages but towards the end of it I was paid better and was able to salary sacrifice into my fund and increase the earning potential. Along with paying off my house 10 years before retirement and being debt free for those years I was able to use long term planning to reach my goal.
    And that is the difference between now and then, the current and previous governments have introduced so much uncertainty into the super environment that no one in their right mind including myself would take the chance of using super as a long term retirement plan.
    The fund I signed up for allowed me to access my money at the age that I predetermined at the start of the contract, I could take it as a pension and manage the tax side or take a lump sum and pay a tax penalty or choose a mixture off both. In other words it was my money to manage how I pleased.
    Looking at the plans that this government has for super you are looking at locking your money up for a non specific time as the government wants to link it to retirement which it wants to determine to suit itself, it wants to stop lump sum withdrawals and fold any unused funds into consolidated revenue. I can't fathom how anyone would choose to put any thing but the bare minimum into such a fund.
    This government has virtually destroyed the Super Fund industry.
    Mar
    29th Jun 2016
    12:29pm
    It's not Brexit that worries me. It's the future if this government gets back in with another plan to rob the poor to give to the rich. Showing their true colours again, with yesterday's so called "savings" by persecuting the poorest in society under the guise of "welfare fraud".Do they think people are so stupid and naive to believe their rhetoric.
    Sundays
    29th Jun 2016
    12:46pm
    I saw that, and thought the same thing!
    Old Geezer
    29th Jun 2016
    12:50pm
    OK these people might owe this money but what chance have they got in getting it paid back? Most cases it is probably prosecute them and send them to jail or community service. I'd be writing it off as a bad debt not savings.
    HarrysOpinion
    29th Jun 2016
    1:01pm
    Do they think people are so stupid and naive to believe their rhetoric?

    -Obviously, Morrison has no faith in Centrelink's administration and ability to reject pensioners who do not qualify or who have applied with false information to qualify. If profiling was made public then there would be less fraud from some segments within our society.
    MICK
    29th Jun 2016
    4:26pm
    Ditto Mar.
    Sundays
    29th Jun 2016
    12:51pm
    I find it interesting that 17 million voted and now 1 million don't like the outcome,so they want a re-vote, also 64% of 18-24 year olds didn't bother to vote but also aren't happy with the result. Lesson for Saturday, although we have compulsory voting, make yours count!
    niemakawa
    29th Jun 2016
    3:12pm
    I will make my vote count and neither Lib/Lab/ Green will receive my primary vote. In the Senate ballot I will put their candidates in the last 3 of my selection.
    MICK
    29th Jun 2016
    4:27pm
    The right never changes. Remember Tony Abbott after Gillard won office? Every other day he called for an election.
    Mar
    29th Jun 2016
    1:04pm
    Absolutely Sunday. We all need to think very deeply about the issues at stake, not just voting for the person. It's important to ignore all the ridiculous propaganda and hype and vote for what we believe is best for our country as a whole. Don't waste your vote. That's what happened with Brexit.
    MICK
    29th Jun 2016
    4:28pm
    Did mine today. Liberal last.
    Anonymous
    29th Jun 2016
    6:03pm
    did mine today, labor last
    PIXAPD
    29th Jun 2016
    1:06pm
    BREXIT = Escape from STALAG EU
    Blondie
    29th Jun 2016
    1:14pm
    Wow!There certainly was no class in Swinging voter's description of women in top political jobs!As Retired university lecturer, I am always amazed at my generation's appalling and dismissive attitude towards women. The young women of today,I find to be well educated, well informed, and capable, in balancing careers and family.The shockwaves that will emanate from Btitain leaving the EU, will continue for some time. 'Getting your country back' is an archaic view in today's global economy, and smacks, sadly, of empire nostalgia : outmoded, 1950/60's thinking. It may have been another story, if ALL those of voting age had voted.....unfortunately, Britain still has a problem with xenophobia.
    HarrysOpinion
    29th Jun 2016
    1:26pm
    The young women of today,I find to be well educated, well informed, and capable, in balancing careers and family....

    - Some young women, not all young women.

    unfortunately, Britain still has a problem with xenophobia
    - Some people in Britain still have a problem with xenophobia, not all people in Britain.

    Some women tend to exaggerate a lot as do some ex-university lecturers of all genders but not all women who are ex-university lecturers.
    Just for the record.
    niemakawa
    29th Jun 2016
    2:27pm
    And some women call men misogynists. Oh the equality !!!!
    HarrysOpinion
    29th Jun 2016
    2:42pm
    And; then there are misandrists, just to balance things off, niemakawa.
    MICK
    29th Jun 2016
    4:34pm
    And too many women in positions of importance are playing the gender card. In the past 2 weeks:
    A female journo cried discrimination when Eddie McGuire was having a bit of fun with his mate at a charity function. I notice the female journo was not participating at the event and in addition she was known to dish it out in her column as. But not me!
    A female politician claimed that she was being vilified on social media. Sorry dear but so a male MPs. They often deserve it and this is wonderful feedback.
    Perspective is against you methinks. And by the way, before you suggest it, I am not a misogynist!
    Sorry.
    Mar
    29th Jun 2016
    1:25pm
    It's sad that some women can still be their own worst enemies in the fight for equality.
    MICK
    29th Jun 2016
    4:37pm
    I'll back equality whenever it is fair. However, I see a lot of reverse discrimination occurring with women looking the other way too and that sort of takes the shine off of it for me Mar.
    HarrysOpinion
    29th Jun 2016
    5:21pm
    Power in the hands of some women is like that shiny star embedded inside a diamond. Diamonds are women's best friend. I was not a misogynist...I had a mother, lots of girlfriends, a wife, daughters and a granddaughter...After divorce there were other women and then I became a misogynist ...(only kidding!) :-((
    PAYEdmydues
    29th Jun 2016
    2:39pm
    How about some the pommies here going back where they came from now that the boom is over? And as UK wants to be an independent nation why and when shall we do the same and become a republic?
    niemakawa
    29th Jun 2016
    2:45pm
    The 'pommies" founded modern Australia. Maybe Australia should become part of The UK.
    Grateful
    29th Jun 2016
    2:57pm
    niemakawa. What U.K.?? It's now just England and Wales because you can bet that the much more canny Scots will see the massive golden opportunity remaining in the EU will bring them at England's expense. What's going to happen to the management and administration of all of those financial institutions in London??
    A shock to some grossly overpriced real estate is looming large.
    niemakawa
    29th Jun 2016
    3:08pm
    Grateful, The Scots can have their referendum I have no argument with that. If they choose to leave The UK, then so be it. England will survive and thrive without Scotland, but I doubt the other way round. Scotland will become a basket case as a member of the EU. It will end up like Greece, Spain, Italy. Nicola Sturgeon, the First Minister, wants to remain part of the EU, but wants to keep the Pound Sterling and has even said there will be no border with England. I think the English will certainly want a border, to stem the flow of her invited friends a la Merkel. Any form of investment is risky look at what has happened in some part of North Western Australia, some properties have dropped in price by 80 % . But that is part of a cycle, same with shares.
    MICK
    29th Jun 2016
    4:41pm
    If you send them home we will be somewhat empty methinks. What I am hearing is that a lot of young pommie professionals are going to arrive as work will dry up in Great Britain. The EU is not exactly going to allow many of the companies in GB to remain operating in GB. Plans for some have already begun. Not sure if the predicted 2 years is going to happen and am thinking this may be sooner rather than later.
    Look out Australia after that. The question is are we going to allow the poms to take our jobs?
    Capn Dan
    29th Jun 2016
    3:12pm
    Brexit was not a declaration of war, it was just normal citizens of a democracy getting rid of a bureaucratic nightmare. Yes, markets went down . . . and some bounced back.
    niemakawa
    29th Jun 2016
    3:32pm
    Par for the course. The world will survive maybe a few hiccups in the next few weeks, but nothing to worry about. There is always some cost associated with FREEDOM and a small price to pay. GO BREXIT, and hopefully many more Countries in Europe to regain their Independence from The EU dictatorial nightmare.
    MICK
    29th Jun 2016
    4:41pm
    Tell that to Brussels Dan.
    Anonymous
    29th Jun 2016
    6:07pm
    wait and see, more countries will follow England's lead, such as France, next year, Holland, etc.
    scud
    29th Jun 2016
    3:16pm
    It's worth reading
    'Lessons from Brexit: the fruits of globalisation must be shared with low- and middle-income groups'
    at the following link:
    http://theconversation.com/lessons-from-brexit-the-fruits-of-globalisation-must-be-shared-with-low-and-middle-income-groups-61663

    A few points to note:

    Brexit voting patterns shed light on the cause: the frustration of low- and middle-income workers. (You're seeing this no only in the UK, but in the EU and US and many other parts of the world including Australia)

    New economic evidence clearly shows that globalisation can harm low- and middle-income workers.

    For workers who lose their jobs, whether through trade, technology, or immigration, the transition to new work is slower than economists had expected. Some are pushed out of the workforce permanently. Many more experience substantial and lasting pay cuts.

    The result is unemployment, wage stagnation, greater welfare dependence, and increased criminal activity – characteristic of many of the communities that voted in favour of leaving the EU.

    Under policies broadly pursued in the West the winners from globalisation have been mainly the rich and especially the extremely rich. In the US, former Treasury secretary Lawrence Summers estimates that around US$1 trillion in annual income has been shifted from the bottom 80% of workers to the top 1%.

    As inequality has continued to rise in much of the West, stagnation has spread from low-income workers to the middle class. Anger has followed, spreading to a critically large proportion of the population.

    The frustration-driven disintegration of the West sends a clear message to political leaders and the moneyed interests that influence them: spread the benefits of economic openness. Political stability depends on it.
    MICK
    29th Jun 2016
    4:45pm
    The divide between rich and poor has been happening in just about every country in the developed world. And still the bastards want more.
    It is well understood that the velocity of money is important. When it sits in the bank accounts of the rich it benefits no society.
    Whilst the rich cry poor and demand ever more for themselves and force ever increasing taxes and lower wages onto the other end the financial system will continue to suffer. There will be a brick wall to hit eventually.
    niemakawa
    29th Jun 2016
    4:47pm
    Mick, in your view what would be the best political system to overcome this "divide".
    MICK
    29th Jun 2016
    8:49pm
    One where Parties are only allowed a finite number of seats and where donations (cash for legislation) are made illegal.
    MICK
    29th Jun 2016
    3:39pm
    No Noel....not yet. But the fat lady is yet to sing and things may get worse before they get better. Certainly the future of the financial system is on a knife edge given debt which can never be repaid unless we have have huge rampant inflation. That'll bring in some money in Capital Gains Tax for investors and put a smile on the faced of the bastards who caused the problem in the first place.
    Old Geezer
    29th Jun 2016
    3:57pm
    I agree Mick things could get worse over next 2 or 3 years as we are now near the peak of a 10 years cycle. Then we will go into the roaring 20s with big gains and inflation.
    MICK
    29th Jun 2016
    4:47pm
    That is what governments with huge debt are likely trying to engineer. So far they have failed. But the fat lady is still lubricating her tonsils.
    Rae
    30th Jun 2016
    8:19am
    I'm convinced we have rampant inflation right now. The prices of housing, shares and bonds are very high.

    The Central Banks have tossed all those trillions of dollars at the wrong people.
    MICK
    30th Jun 2016
    9:26am
    They tell us we have deflation but the cost of groceries continues to up, the cost of getting a tradesman has gone through the roof, other items cost more and government charges increase well above CPI. And we have deflation? Yeah right.
    Mar
    29th Jun 2016
    4:35pm
    Fear brought about Brexit. Open borders, feeling out of control, economy dwindling, political arrogance. Governed by fear, people make uninformed choices. One thing for sure the Brits are tough. They will make it work.
    niemakawa
    29th Jun 2016
    4:42pm
    As the wonderful Vera Lynn sung ( I think she is still alive 99 +)

    To paraphrase.
    "They'll be blue birds over the White Cliffs of Dover, just you wait and see....."
    MICK
    29th Jun 2016
    4:47pm
    Was she a fat lady?
    Anonymous
    29th Jun 2016
    4:53pm
    If she was, it is well and truly over.
    niemakawa
    29th Jun 2016
    4:54pm
    No she was/is the epitome of all that is British/English.
    MICK
    29th Jun 2016
    8:50pm
    Ahhhh.... Cup of tea and a scone.
    Mar
    29th Jun 2016
    5:14pm
    Eh!!! Be careful! I'm a Welsh Pom. (Been here 51 yrs.) and you won't bl...y send me back. I'm probably more Aussie than some Aussies! By the way Niemakawa, Land of Hope and Glory is far more potent than Vera Lynn's Bluebirds.
    niemakawa
    29th Jun 2016
    5:17pm
    Yes, I listen to Land of Hope on Glory at least 3 times a week. The best anthem in the World. Nothing else comes close.
    flowerpot
    29th Jun 2016
    5:16pm
    All of you writing all this jingoistic twaddle about the UK 'taking back control' or 'getting its country back' should be here in the UK right now as I am. Make no mistake this is a disastrous decision which will see the UK broken up (Scotland will leave) and the new political elite on the far right completely wreck the country. The ordinary citizen will suffer greatly, prices will rise and so will taxes. An the UK will have no clear trade route with Europe. Meet the new boss....much worse than the old boss...
    HarrysOpinion
    29th Jun 2016
    5:25pm
    Is the new boss's name Mustafa by any chance?
    niemakawa
    29th Jun 2016
    5:26pm
    Stiff upper lip old chap, that will see you through. In other words toughen up, Britain is well out of the MADHOUSE of the EU. Australia will relish the opportunity of trading with The UK once again without the constant interference of the despots in Brussels. So do you really want a EU Army, A Centralised Government, to be forced to join the euro-zone, have no say in the relocation and settlement of "immigrants". All laws emanating from Brussels. In short do you want to be part of an EU Superstate, that is the main aim of The EU project. ?Scotland is welcome to go its own way, it is not pivotal to the survival of the remaining countries of The UK.
    Anonymous
    29th Jun 2016
    6:13pm
    flowerpot, put it on your head, no way Scotland will break away from England, they got more brains en know which site of their bread is buttered
    niemakawa
    29th Jun 2016
    6:15pm
    heemserk, forget about the bread let them eat cake. Scotland is not needed by England. More Scottish people live in England than live in Scotland.
    Anonymous
    29th Jun 2016
    6:36pm
    flowerpot, we are having our own "Malex" here, voting to unseat an obstruction to our democratic way of life where everyone is supposed to be treated equally, whether they are a politician or not, where there is equal opportunity for all and not just a minority, and where you can get a "fair go" even if you are retired. AND, what makes our situation EVEN WORSE is that we are being "governed" (this term is being used VERY loosely) by a PM we didn't even vote for!! So, you see, it is not all "beer and skittles" here, either. We shall be in contact post this Saturday, after the enema has been given and let you know if all systems are "go". Cheers.
    MICK
    29th Jun 2016
    8:54pm
    flowerpot: I feel for you all over there. AVerage people always bear the most pain.
    Controlling who you keep out is probably more important than the short term pain and I am sure GB will survive once the uncertainty is over. Scotland and Ireland have long not wanted to be a part of the empire so better to let them go.
    Brexit is not yet a done deal and I have the feeling that Britain may in some way be brought back into the Eu or that the Constitution of the EU may evolve. Not as though other countries are also not having poor nation stress.
    Good luck.
    Mar
    29th Jun 2016
    5:39pm
    It's the Aussie way Flowerpot. "She'll be right mate" Just you wait and see!
    Anonymous
    29th Jun 2016
    6:55pm
    "She'll be right" ONLY if you try to make it that way! Sit back on your duff and you will continue to be "MALtreated"! You get what you WORK for. Don't fool yourself with some silly, hackneyed cliche.
    MICK
    29th Jun 2016
    8:55pm
    A bit of kindness needed Eddie. Mar is not one of the rats you know.
    Mar
    29th Jun 2016
    7:41pm
    Sounds like "we'll all be rooned said Hanrahan" come Saturday.
    MICK
    29th Jun 2016
    8:57pm
    That is the normal response from the Business Council when hourly rates for the lowest paid go up by 50 cents.
    Campbell
    30th Jun 2016
    6:46am
    In 1974 when Australia lost most of it's trade to UK due to them joining Europe the interest on house loans when through the roof here.....up to 19%. I struggled to make payments. I am British and Australian and I say stuff the poms.
    MICK
    30th Jun 2016
    10:42am
    That's a statement and a half.
    Expect a wave of young poms here looking for work in finance as if the split goes ahead a lot of EU companies will be pulling out of London and heading to other EU locations. Poms will come here seeking jobs.
    niemakawa
    30th Jun 2016
    10:46am
    The young poms won't be coming in boats though. They will have to apply through the proper channels.
    MICK
    30th Jun 2016
    11:43am
    Poms have never had problem coming here but it has been harder for Australians to go there.
    When Australians are displaced from finance industry jobs I wonder if you will still be happy to have pons take their jobs. That will hurt the nation as much as corporate tax cuts going to wealthy American investors.
    ex PS
    1st Jul 2016
    5:50pm
    Poms will have no problems, the are the right colour and religion, they could fly, walk, crawl or come by broomstick they would be welcomed.
    niemakawa
    1st Jul 2016
    6:08pm
    ex P S. Do you have a problem with that? What is so wrong being white, that is what you mean is it not? They will be processed and only gain entry on merit. Could be you are referring to those that belong to the RoP ?
    ex PS
    2nd Jul 2016
    6:40pm
    There is no problem with being white just as there should be no problem with being black, Asian or any other colour. But there seems to be with this country. The biggest problem I have is the whites will be processed and given every opportunity to state their case and use the legal system of this country to meet their rights.
    They will not be declared illegal and placed for an indefinite period in a concentration camp to rot.
    Does no one see the difference here?


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