Brexit: is your retirement in danger?

Font Size:

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.


Making the transition to retirement

Brexit has left many people wondering about travel and passports but what about the really important

Noel Whittaker answers your questions on super

Noel Whittaker answers your questions on changes to superannuation.

Written by Noel Whittaker


Sign-up to the YourLifeChoices Enewsletter

continue reading

Superannuation News

Is your super fund heading for a double-digit year?

One year ago, the prospect of superannuation funds recording double-digit returns seemed inconceivable, but that it exactly where a lot...


Napping could help you stay mentally agile

We all have nights when we fall seriously short of the recommended eight hours of shut-eye, and the following day...

Health news

Link found between pro-inflammatory diets and 27 chronic diseases

Meghan Hockey, Deakin University and Wolfgang Marx, Deakin University Almost half of all Australians live with a chronic disease, which...

Aged Care

Friday Reflection: Why did I wait so long?

I'm ex-RNAS and ex-RNZN. Widowed, six years back, our bedrooms upstairs. Perfect, while both active. However, isn't there always a...


National Cabinet to fast-track COVID-19 vaccination for over 50s

Australia will fast-track its COVID-19 vaccine rollout for people older than 50 next month, as National Cabinet seeks to reset the...

Health Insurance

Six reasons your health fund won’t give you a better deal

Do you trust your health fund to give you a better deal? If you think you’re paying too much, it...


Monoclonal antibodies useful for fight against COVID variants

Monoclonal antibodies could prove a game changer for COVID-19 prevention after a trial found they reduced the risk of coronavirus...


Friday Funnies: Science says

  Here are five of the funniest jokes of all time. If you disagree, don’t blame us. Professor Robert Dunbar...