Many retirees will settle on a combination of income that includes superannuation, savings and access to the Age Pension.
For some, however, this balance may not be enough to achieve true financial independence or meet the rising cost of living. If you are seeking a regular inflow of money beyond your current status quo, you may wish to consider additional investments.
When your earnings from work come to an end, investments have the potential to take over as a new source of regular income — but it’s a topic that can easily overwhelm a newcomer at first glance. If you’re just starting out in the world of investments, here are some important factors to consider.
One of the founding principles of investing is to start early and contribute regularly to your investments.
Superannuation contributions make this initial starting point an easy one. While super can be a great and tax effective vehicle for investing, you may also wish to invest some of your wealth held outside super.
It’s important to take a diverse and holistic approach when investing for retirement. The motivation of investing is often two-fold: you want a strong capital base so that you can generate income while maintaining access to a lump sum should you need it.
All investments carry risk; that’s why diversifying rather than putting all of your assets into one basket is a good idea. It mitigates some of the risk and enhances the overall stability of your investment portfolio.
Working out the right mix of investments across cash, fixed interest, Australian and International shares, property and any particular investments you already hold is going to come down to your personal risk tolerance, financial goals and how close you are to retirement.
Deciding the right asset allocation is not a “set and forget” thing; you should review it at least annually and any time there is a significant change to your situation to make sure it still meets your needs.
When researching your investment options, understanding your appetite for risk, and working out which investment vehicle may suit you best, you may wish to explore ways to benefit from the expertise of seasoned investors.
La Trobe Financial is a leading Australian alternative asset manager that has been trusted by Australians for more than 70 years. Their 12 Month Term Account has been awarded Money magazine’s ‘Best Credit Fund – Mortgages’ for 15 years in a row.
La Trobe Financial aims to help its customers achieve financial independence by delivering them low volatility, regular monthly income from a highly diversified portfolio. Their 12 Month Term Account currently offers investors 6.65% p.a*.
Avid travellers can also enjoy extra bang for their buck; as part of a partnership with Qantas, eligible investors can earn 250 Qantas points for every $1000 invested when they invest a minimum of $10,000 in their 12 Month Term Account**.
In many cases, investments can complement your age pension in providing you with the income you need to fund your desired lifestyle.
The age pension is means tested, using both an income and assets test. Currently under the income test your investments are deemed to earn a relatively low rate, with 2.25% p.a. being the maximum amount. You can earn more than the deeming rate, giving you more income to spend, without losing your pension.
By investing early, you harness the potential for substantially more growth over time. Even modest, regular contributions can accumulate into a substantial nest egg, providing a good foundation for your retirement. The power of compounding cannot be overstated.
If you’re concerned about the increasing cost of living, investing early can also make you less vulnerable to inflationary pressures, as the value of assets also tends to rise over time.
If you are eager to explore alternative investment options sooner rather than later, La Trobe Financial’s 12 Month Term Account can help you hit the ground running, offering a transparent and conservative investment strategy honed over seven decades of property credit experience. Learn more here.
*The rate of return on your 12 Month Term Account investment is current at 1 December 2023. The rate of return is reviewed and determined monthly and may increase or decrease each month. The applicable distribution for any given month is paid at the start of the following month. The rate of return is not guaranteed and is determined by the future revenue of the Credit Fund and may be lower than expected.
An investment in the Credit Fund is not a bank deposit, and investors risk losing some or all of their principal investment. Past performance is not a reliable indicator of future performance. Withdrawal rights are subject to liquidity and may be delayed or suspended.
La Trobe Financial Asset Management Limited ACN 007 332 363 Australian Financial Services Licence 222213 Australian Credit Licence 222213 is the issuer and manager of the La Trobe Australian Credit Fund ARSN 088 178 321. It is important for you to consider the Product Disclosure Statement for the Credit Fund in deciding whether to invest, or to continue to invest, in the Credit Fund. You can read the PDS and Target Market Determinations on the La Trobe Financial website or ask for a copy by calling them on 13 80 10.
Past Performance is not a reliable indicator of future performance.
To view La Trobe Financial’s Awards please visit the Awards and Ratings page on their website.** Terms and conditions and eligibility requirements apply, see www.latrobefinancial.com.au/loans/qantas/disclaimer for further details .To earn 1 Qantas Point per $4 invested you must invest $10,000 or more in the 12 Month Term Account. You must be a Qantas Frequent Flyer to earn and redeem Qantas Points. A joining fee usually applies, however, La Trobe Financial has arranged for this to be waived for new customers who join here. Membership and points are subject to the Qantas Frequent Flyer program Terms and Conditions.
To the extent that any statement in this article constitutes financial product advice, that advice is general advice only and has been prepared without considering your objectives, financial situation or needs. You should, before deciding to acquire or to continue to hold an interest in the La Trobe Australian Credit Fund, consider the appropriateness of the advice having regard to your objectives, financial situation or needs and obtain and consider the Product Disclosure Statement for the Fund.
When considering whether to acquire or to continue to hold an interest in the Fund, you should remember that (1) an investment in the Fund is not a bank deposit or a term deposit, and is not covered by the Australian Government’s deposit guarantee scheme. Investing in the Fund has a higher level of risk compared to investing in a term deposit issued by a bank and (2) there are other risks associated with an investment in the Fund. The key risks of investing in the Fund are explained in section 9 of the PDS.
IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.
An investment in a low volatility fund can provide a regular source of income in retirement. Understanding your risk appetite and then investing in a diversified portfolio such as the La Trobe Australian Credit Fund can help on your way to achieving financial independence.
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