t working out how long your money might need to last is only the first part of a two part conversation. The real question is the rate at which you can and might spend your savings.
James Coyle
James has over 35 years experience in financial services with particular expertise in two of the key components of retirement finance - Superannuation and the Age Pension. He is passionate about providing the guidance and support that can help older Australians enjoy their best possible retirement.
He lives in regional Victoria surrounded by dogs and chooks.
How safe are your savings?
Cash is often viewed as a ‘safe’ form of investment. It’s tangible – you can actually withdraw it in wads of notes, so it feels more ‘real’ than, say, shares or indexed funds. Theoretically your capital value will not go down – if you have $500 invested, then that is the amount of money you genuinely own. And given the current stock market volatility, whereby a shareholding worth $500 yesterday might the next day be worth $470, or $530, cash looks very stable.
Knowing how long you will live … is the best way to plan
The one piece of advice missing from your birth certificate is the expiry date. Yet this would be the single most helpful number for all retirees. If only we knew this date, we’d be able to do our retirement income sums so much more quickly and accurately. And we’d know exactly how much we could spend each year.