Will You Ever Be Able to Afford to Retire?

That is the question on the lips of many older Australians, who are being forced to reconsider their financial positions going into retirement. Whether this is just fearmongering in the mainstream media or an actual issue is something we will try to unpack today.

It seems that with the cost of living constantly rising in Australia, teamed with record-low interest rates punishing savers and a higher life expectancy, worries are surfacing that retirees might not actually have enough money in their super accounts to last them through retirement.

But are these worries completely unfounded? That may be the case, according to a new report just published by the Grattan Institute. The report claims that the superannuation lobby has been ‘creating false belief retirees haven’t saved enough’, according to The Guardian. The report’s authors argue that a recent rise in think-pieces on the topic across Australia’s newspapers is, essentially, just the super industry talking up its own book.

After the report’s release on Tuesday, a variety of news sources quickly back-flipped on prior claims that Australians are dangerously underprepared for retirement.

There’s nothing more liberating than taking control of your own financial destiny. Find out now if a self-managed super fund is the right move for you. Get your free report today.

The Sydney Morning Herald has named the whole fiasco ‘the Great Super Lie’. Many are calling the superannuation lobby a ‘fear factory’, taking advantage of vulnerable Australians which may be worried about their financial future. From The West Australian earlier in the week:

Australians nearing retirement are being scared into believing they will face a life of penury when many will be better off than during their working lives, a report out today suggests.

Compiled by the independent Grattan Institute, the report argues plans to lift the superannuation guarantee to 12 per cent should be abandoned and tax increased on superannuation accounts.’

The super industry has its own, obvious, reasons to want more Australians to put more of their cash into their super. They are paid their management fees on every cent, however well or poorly your portfolio performs. You can choose which fund manages your money, but you can’t choose to opt out of the system entirely — unless, of course, you’re willing to put in the work to run a self-managed super fund of your own. Something that a mere 4% of Australians do.

So any lift in super contributions, whether voluntary or legislated by the government, benefits super managers. 

Be careful who you listen to…

However, while you should be suspicious of super managers trying to frighten you into handing over more of your cash, that doesn’t necessarily mean you should trust the newspapers telling you not to worry and just to ignore your retirement savings, either…

The important thing to take away from this debacle (and the misinformation that comes with it), isn’t that we will actually have enough money to retire on. That will depend on your individual circumstances, and a newspaper (or e-letter) article talking about nationwide trends can’t address your unique situation.

Here at Markets & Money, we don’t pretend to have all the answers. Instead, we argue that you should take control of your own finances. We believe that every investor should understand their own investments, and make decisions for themselves. We’ll offer up our best ideas and research, and the rest we leave to you.

Stock picking veteran and economics expert, Greg Canavan, does just that in his investment advisory, Crisis & Opportunity. He looks for stocks which can carry your wealth unharmed in periods of economic uncertainty, and he hunts for beaten down value to benefit from the recovery. But most of all, Greg takes a humble approach. He makes sure his readers understand the thinking behind each of his recommendations, and the risks as well as the potential rewards. Greg wants to make sure that you go into each of the stocks he recommends with your eyes wide open. A level of transparency you won’t often see from the big players in the financial industry.

The latest macro trend Greg has been looking at is how to tackle the current energy crisis in Australia (with an alternative energy source we naturally have in abundance). To find out what his potential solution is — and how you could make money from it — click here.

This week in Markets & Money

On Monday, Selva noted that casual work is on the rise in Australia. The economy is moving away from mining and manufacturing and shifting towards service industries where casual work is readily available. So what does this mean for the future of making a living in Australia?

To read the full article, click here.

By all appearances, Uber Eats is doing well. It’s prevalent in popular culture, and it’s hard not to come by one of their take away bags while walking the streets of Melbourne. But as Selva wrote on Tuesday, all is not what it seems within Uber. With the company facing increasing competition from other ride sharing services, they haven’t been able to turn a profit. So, what’s next for Uber?

To find out, click here.

While stock markets were tanking in October, US consumers remained quite optimistic about the economy. With unemployment low, US consumers see a bright future in regards to future business, income and jobs. However, US consumers are basing their expectations for the future on past performance. And as Selva wrote on Wednesday, this is a dangerous mind-set.

To find out why, click here.

Australia ranks sixth in the world when it comes to fuel affordability. A litre will set you back only 0.68% of your daily wage. On the other hand, Spain ranks number 27 and a litre will cost 1.75% of a day’s wage. But as Selva wrote on Thursday, with oil prices rising, Australia could be in for more hard times yet.

To learn more, click here.

How can you raise rent if rents are falling? That’s the question Selva asked on Friday. The answer is that you can’t. Unless, you rent in a completely different market. That is, instead of renting long-term, you rent short-term by using sites like Airbnb. And if Selva’s right, that may be the way of the future for the property market…

To read the full article, click here.

Best wishes,

Julija Zivanovic,
Editor, Markets & Money

Markets & Money is unlike any other finance newsletter. Our mission is to look at the world of investments and finance in a sceptical and contrarian way. Our editorial team looks beyond the headlines and obvious explanations to bring you what we think is really moving the market. More importantly, we’re trying to show you where the next big opportunities and where the big risks are that you might not be aware of. In Markets & Money you’ll read about the state of the Australian housing market, the future of the commodity boom, China’s rise to an economic superpower, the fate of the US dollar, and of course a whole lot more.

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