Financial Planning
When you retire, keep your money working
For many years the conventional wisdom was to put your money into growth investments when saving for retirement and transfer to income investments after retirement.
However, this is now widely acknowledged as a risky approach to investment.
The risk is that, over time (and retirement is typically 20+ years these days) the purchasing power of your investment income will fall, together with your standard of living.
So you really need a mixture of growth and income to stave off this slide and maintain the real value of your retirement income.
Keeping your balance
This means investing across a range of investments such as company shares, property trusts, term deposits and cash accounts, either investing directly or in a managed investment. The balance of your investment portfolio - the proportion you put into each type of investment - will depend on your particular needs, also taking the state of investment markets fully into account.
From shares, for example, you may receive dividends twice a year and also capital growth as the share price increases. The dividends represent the company profits that are distributed to shareholders and the growth reflects the increase in value of the company - and your share in that company! And if the dividends are franked you may pay little or no additional tax on the dividends received, or even receive a tax refund.
Carefully selected share investments, in combination with other investments, can make a major contribution towards preserving a comfortable lifestyle throughout your retirement.
To find out how a Bridges Financial Planner can keep your retirement investments work harder for you call Police Credit Union on 131 PCU
(131 728) today.
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