Retirement Planning in Uncertain Times - Government Employee Considerations

Thursday, July 30, 2020

If you are a Government employee close to retirement, these uncertain times may be leading you to think about your retirement options. Sometimes the market gyrations can make people nervous and subsequently hold off their retirement, but these changes may not have affected your investments at all. In fact, there are some worthwhile considerations to keep in mind.

by Maher Digby Financial Planners Sunshine Coast 

If you hold a Defined Benefit superannuation account for example, the advantage is that this will not have been affected by any of the market changes during the COVID-19 experience.

You will most likely understand that your Defined benefit is not tied to the markets but rather calculated by multiplying a number which reflects both your years of service and your contribution rate (your multiple) with your final salary. This is an excellent position to be in.

Retirement Advantage in Market Downswing

There are clear advantages of investing in a market downswing. For example, if you choose to retire, your defined benefit would then transfer to an Accumulation account in which case you then have access to the buying opportunities that are available in the current market.

There are many investments on “sale” at present with Fund Managers focussing on taking advantage of them. You have the benefit of buying when the markets are low, positioning yourself for the upswing, then when this occurs you can experience further capital growth in your investment.

In addition to this, there are investment strategies that will maintain adequate cash flow for your income payments so you do not have to dip into your capital investments while the markets are recovering.

Other Teacher Strategies

Teachers are some of the people that experience added advantages in the pre and post retirement phase. Having specialised in retirement planning for teachers for many years both on the Sunshine Coast and in the Wide Bay region we have worked with many people who choose to extend the front end of their retirement by taking long service as part of their pre-retirement strategy.  In addition, some retiring teachers will keep a small amount of investment in their Accumulation account to keep it open, and then utilise Supply Teaching as a form of part-time income in their post-retirement phase. 

If you are contemplating retirement, we suggest consulting with your Financial Adviser to discuss options and potential strategies to maximise your retirement position. You may have more choices than you realise.

For more Information contact Mark Digby at Maher Digby Securities Pty  Ltd - Financial Advisers – AFSL No. 230559 – Ph: 075441 1266.  This document was prepared without taking into account any person’s particular objectives, financial situation or needs. It is not guaranteed as accurate or complete and should not be relied upon as such.  Maher Digby Securities does not accept any responsibility for the opinions, comments, forward looking statements, and analysis contained in this document, all of which are intended to be of a general nature. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend consulting a financial advisor