1.First Question
At sixty-three, I plan to retire in two or three years.
I am currently seeing slower growth because I switched my super into a cash investing option due to market instability.
I have roughly $570,000 left. Leaving super in a higher growth choice and riding out any market changes is the advice I see everywhere. The phrase "in the long term" is always used before this counsel, though, and it is aimed at those who are 40, 50, or younger.
Given the volatility and unpredictability of the present market and the short time until my retirement, what advice would you give someone my age and situation?
First of all, it is exceedingly challenging to try to time the market for when to convert to cash. Then, it is equally challenging to try to time the market to return to growth or balanced choices. Making both choices correctly is really challenging.
AustralianSuper gave the following example to illustrate this. It depicts a person who, when COVID struck and the markets first plummeted, moved from their balanced option to cash. The Balanced option, as you can see, recovered rapidly, and after a little more than five years, the difference is $173,341 (from a starting balance of $350,000).
On to your second point, which is that you plan to retire in the coming years. On average, a 65-year-old man can anticipate living for another 20 years; that is, 50% of men will live longer than that. Additionally, women often outlive men by a few years.
I hope you are making plans for your super to outlive you. As a result, most money should be invested with a long-term perspective.
Speak with your super fund to discover a viable alternative that suits your risk and return profile, and one you will be comfortable continuing with long term.
To set your mind at ease, you might earmark a portion of your super to retain in cash. While most of your money can stay in a better long-term choice, you can use these funds for the first few years of your retirement.
2.Second query
My spouse turns 70 in May, and I am 61. I do not want to retire, but he does.
We have a paid-off vacation home and an unpaid-off home. His super is worth roughly $15,000, while mine is worth about $300,000.
Is he entitled for a partial pension if I keep working full-time? Our two children are still at home and will be attending college for another two years.
Salutations to you,
Your vacation house will undergo an asset test. It might have an effect on your husband's age pension, depending on its worth.
Until you turn 67 or enter a pension, your super will not be deducted from your age pension.
According to the assets test, he would be eligible for a full age pension if your assets (such as your vacation house, his super, bank accounts, etc.) were less than $481,500.
His age pension would begin to decline if his assets exceeded this amount. If assets reach $1,059.00, it becomes zero (keep in mind that these amounts are higher if you do not own your own home).
His age pension may be impacted by your earnings.
His pension will not be impacted if his income is less than $380 every two weeks. It then begins to decrease. If your combined income is $3844.40 every two weeks, it is zero.
Whichever of the assets and income tests yields the lower findings will be used by Centrelink.
Your desire to continue working is great. As a result, your financial status will improve. The focus should be on your entire income, not simply your age pension.
Hopefully, your pay and your husband's possible part-time pension will be enough for the time being. In order to supplement the income, you might transfer a portion of your super to a transition to retirement pension, but ideally you are not need to do so and it continues to grow for your retirement.
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