Three Chain Financial Planning

A very common risk for retirees when funding retirement income from Superannuation is sequencing risk.

Sequencing risk refers to the impact that the order of investment returns has on outcomes, particularly during drawdown.

Negative returns early in retirement, combined with regular withdrawals, can permanently impair portfolio sustainability—even if long-term average returns are strong. Managing asset allocation, withdrawal strategies, and liquidity is critical to reducing this risk.

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Vanguard have recently released the 2025 Index Chart showing the importance of staying the course with your investments & capturing 30 years of Australian and global investment market history.

Three ways to plan for your 30s

1. Don't neglect your super! The more focus you put into your super now will reduce the heavy lifting you need to do nearing retirement. Remember compounding interest is your best friend.

2. Protect your assets and yourself! if you have people in your life who rely on you financially, it’s important to consider how they would cope if something unexpected were to happen to you. Meeting household living expenses, mortgage or rent payments, plus increased care and medical costs may become more difficult without your ability to earn an income

3. Spend less than your earn! While it sounds pretty simple, putting aside a small amount on a regular basis could make all difference over the longer term.

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An advantage of investing via your super fund is that your money is essentially locked away until you reach a condition of release, usually your retirement. During your super accumulation years you are more or less locked into staying the course.

Yet staying the course, and not being distracted by short-term market noise, is just as important in your pension phase as it is at any other time. What happens in the financial markets day to day typically has minimal impact over the longer term.

As such, it’s always important to focus on the things you can control in retirement.

This includes reviewing your spending regularly and making sure you’re invested in products that have low management costs. After all, the lower your investment costs the more money you get to keep.

And finally, stay diversified. Diversification will offset the risks of being too exposed to one asset class.

In times of falling asset prices, some investors overreact by selling riskier assets and moving to government securities or cash equivalents. But it’s a mistake to sell risky assets amid market volatility in the belief that you’ll know when to move your money back to those assets.

While past returns are not an indicator of future performance, they do give a fairly good indication of the differences in returns between different types of assets.

Shares are renowned for being more volatile than other asset classes, however they have typically delivered the best returns over longer-term periods.

Share markets invariably recover their lost ground over time. So the best strategy is always to stay on your course, irrespective of sudden market jolts.

What's most important is to have a long-term investment strategy and diversified asset allocation plan, and to not to deviate from that plan, even when markets do fall sharply.

If you’re really not sure about what to do now, or your overall financial direction, feel free to give me a call for a free consultation.

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Market Index recently released an article with some information around market corrections and bear markets since 1980. For those of you concerned about the current market climate and what this means for your superannuation and savings the below table may put things into perspective.

For those of you who would like to read the full article the link is down below.

Credit: https://www.marketindex.com.au/news/the-asx200-is-getting-smashed-but-is-now-the-big-opportunity-youve-been

Students can look forward to a further 20% off their Higher Education Loan Program (HELP) debts before indexation
is applied on 1 June 2025.
Around 70% of people repaying a HELP debt are 35 or younger, which is a key time for saving, buying
a home or starting a family. If passed, this one-off discount will benefit more than 3 million Australians.
A Uni graduate with an average debt of $27,600 will have $5,520 shaved off their outstanding loan.

As a student, you will only be asked to start repaying your loan once you earn $67,000. And this will be based on a portion of your income, not your total income. This is up from the current repayment income threshold of $54,435.

Anyone earning less than $180,000 will also pay lower compulsory repayments. These reductions will
kick in on 1 July 2025.

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As people get older, they may start to think more about their retirement and how much money they will need. However many working-age Australians and retirees are still uncertain whether their retirement savings will last, with those concerned about running out of money perhaps more at risk of underspending in their retirement years.

1 in 2 retirees do not know how much they can spend each year in order to not outlive their savings

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Inflation News: New data shows the quarterly consumer price index dropped to 2.8 per cent over the year to September, down from 3.8 per cent in June.
That's the lowest level since the March 2021 quarter, during the outbreak of COVID-19.

Free Superannuation Review Promotion:

If you want to get a completely fee and obligation free report showing your super funds fees, performance, & any hidden charges give me a call now!

Vanguard released some damning statistics recently showing:

- 2 in 3 Australians are not aware their super fund charges them multiple fees.
- One third of Australians have never reviewed or compared super fund fees.

If this is you don't hesitate to reach out, you have nothing to lose and everything to gain.

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During the last quarter Australian & US Equity markets reached all time highs and these continue to be pushed day by day as we speak.

If your someone who does not know what's happening inside your superannuation you like most people might be missing out on thousands, if not hundreds of thousands of dollars in retirement.