Talking about risk and retirement is a little like talking about debt and retirement. We may be aware that we need to confront this, but words like risk and debt can have negative connotations. This means many of us will avoid ever ‘going there’. But this can be a mistake. It’s usually only by managing debt and understanding risk that we can fully maximise our later life income.
In search of an easier way to tackle these thorny issues, it occurred to me how much most of us love a makeover. Whether it’s a farmer in search of a wife, a ‘grand design’ for a renovation or a bootcamp in the jungle to fast-track fitness, most of us love to see the foundational work-in-progress which is necessary to create better outcomes.
How does this foundational work translate to managing money? Not as a quick fix, that’s for sure. But creating strong foundations by understanding investment risk is a very useful strategy. It starts with self-knowledge and then applying this understanding to the way you invest and the settings you choose. Today we explore this topic and look at a ‘makeover’ that could lead to $100,000 extra in retirement savings, should Bevan and Anne make this choice.
