Avoid the pension pitfalls

Navigating the super-in-retirement landscape alone is virtually impossible given its complexity and the financial perils of getting it wrong.

While access to affordable advice is the obvious answer, that’s easier said than done. Most Australians muddle along as best they can, unable or unwilling to pay for financial advice. Only 10%-15% of people have a financial planner, mostly those with lots of money.

These shortcomings are laid out by actuarial firm Rice Warner in a recent submission to the Australian Securities and Investments Commission (ASIC).

“It is useful to consider the circumstances of a couple approaching retirement, who want assistance on the complex environment of superannuation, tax and social security. At this stage, the couple will need to deal with longevity and investment risks and might need to use home equity later in life for aged care or income support,” the submission says.

“They will need to hold funds in liquid form for pension payments and will need to hold money in growth assets for inflation protection (and to benefit from ongoing investment returns), and they will also