Newspaper article Fraser Coast Chronicle (Hervey Bay, Australia)

The Cash Dilemma for Retirees; Add Growth Assets Toportfolio, Say Advisers

Newspaper article Fraser Coast Chronicle (Hervey Bay, Australia)

The Cash Dilemma for Retirees; Add Growth Assets Toportfolio, Say Advisers

Article excerpt

Byline: Donna Picton, Elston Partners

THE rising cost of living is a major concern for all Australians, in particular for retirees who are no longer in the income-producing phase of their life and are reliant on making their money last.

Coupled with the fear of unprecedented global uncertainty and domestic political unrest, it is an unsettling and stressful time for most.

In response to this dilemma, a large majority see the solution as selling growth assets to go to cash for capital stability.

Taking this short-term view can provide piece of mind. However, often overlooked is the long-term risk to their money's longevity by remaining fully invested in cash.

An example of this was a retired couple with $700,000 to retire on back in 1994.

They would have required around $34,000 of income to be in line with the average annual wage (AWOTE).

Through bond interest they were generating an excess to their income needs in year one. …

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