Home' Independence : Independence Vol 36 No 2 Oct 2011 Contents A ‘modest’ retirement allows for a slightly
better lifestyle than the age pension, but
retirees are still only able to afford fairly
basic activities. A ‘comfortable’ retirement
allows retirees to have a good standard
of living, be involved in a broad range
of leisure and recreational activities, and
purchase items such as household goods,
private health insurance, a reasonable
car, good clothes, a range of electronic
equipment and domestic and occasionally
The most recent figures (March 2011)
show that a couple looking for a
comfortable retirement needs $54,562 a
year. For singles, a comfortable retirement
costs $39,852 a year.
By using the ‘drawdown theory’, you can
help to maximise your retirement savings
in a risky market. When following this
theory, you invest part of your pension
account balance in defensive investment
options such as cash or bonds and draw
down first from these options. Defensive
investment options are less affected by
the performance of the market, and while
they may not perform as strongly as other
options during strong economic times, they
provide a more reliable source of income.
By drawing from your defensive
investment options and leaving your
‘aggressive’ options (such as shares and
property) in your pension for longer, you
can potentially reduce the risks associated
with share market cycles. Market
performance is cyclical so if you can
manage to withdraw from your aggressive
investment options only when they are
near the top of the cycle, you will help to
maximise your retirement savings.
While there are still some risks associated
with this strategy (such as running down
your defensive option balance while the
market is at the bottom of the cycle,
and having to draw down from your
aggressive option balance at a lower
price), it does allow for more control over
the process. It is important to review this
strategy annually, as your portfolio will
automatically become more aggressive
over time as your defensive option
Some pre-retirees choose to mirror their
desired retirement asset allocation five
to 10 years before retiring. While this
would not be an appropriate strategy
for everyone, this does allow those
who adopt it to become familiar with
market cycles and how this affects their
1 Suncorp Life (2010) Attitudes to super in
Australia survey. Accessed at http://www.
2 Accessed at http://www.superannuation.asn.au/
This is general information only and it does
not take into account individual objectives,
financial situation or needs. NGS Super members
considering using this strategy should get in
touch with a NGS Financial Planner on 1300
133 177 for advice tailored to their needs.
For information about NGS Super visit www.
AHISA invited its partner NGS Super
to comment on retirement planning in a
volatile financial environment.
Many Australians believe they won’t have
enough money to retire. In fact, a recent
survey1 by Suncorp Life revealed that only
one in 25 Australians think they will have
enough money to enjoy a comfortable
retirement, and of those that believe they
won’t have enough, 41 per cent haven’t
thought about how they will fund their
This fear is likely to increase given the
increasingly unstable global market.
The instability of Portugal, Ireland,
Greece and Spain has raised questions
about the likelihood of another global
financial crisis (GFC). While this may
not eventuate, it is vital that Australians
approaching retirement understand how
to minimise the effect any future economic
downturns may have on their retirement
It is important to get regular advice
tailored to your particular needs, but there
are strategies you can employ that may
have a positive impact on your retirement
savings and minimise some of the risks
associated with market volatility.
How much do I need to retire?
The Westpac-ASFA Retirement Standard2
is a quarterly study which measures
the cost of a ‘modest’ or ‘comfortable’
lifestyle in retirement for singles and
couples, allowing Australians to
understand the true cost of retirement.
RETIREMENT PLANNING: HOW TO MANAGE ANOTHER GFC
lost that aura which once was there.
These are signs it is time to take stock and
to recall that we are each custodians of
our school for but part of its history.
Retirement does not mean being put out
to grass. It is simply a process of retiring
from a particular pursuit and embarking
on a new and exciting part of life. A
successful retirement can also play an
important part in facilitating a sound
transition so that the school which was so
all consuming of one’s being can go on to
Robert Grant AM was Headmaster of Sydney
Church of England Grammar School (Shore)
from 1984 to 2002. In his (active) retirement he
has been interim Head of various schools and
participated in professional development programs
for Heads and other school leaders. He also acts
as a consultant to school boards in Head selection.
He is Executive Officer of AHISA NSW/ACT.
40 Independence Vol 36 No 2 Oct 11
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