Recent research from the Australian Securities and Investments Commission (ASIC) shows that almost half of Australians aged 50-66 worry that they will outlive their savings, despite Australia having one of the largest superannuation systems in the world, now totalling over $4.2 trillion.
Only a third of people in this age group feel confident they will be financially comfortable in retirement. For many, the shift from accumulating wealth to drawing an income is unfamiliar territory, especially with a backdrop of volatile markets and economic change.
The current war in the Middle East is the latest disruption to ripple through global markets.
Senior investment adviser at Morgans Ballina, Leo Senese, told The Echo that the international political situation is creating a lot of uncertainty for retirees and investors, particularly surrounding energy, but sees opportunities amid the challenges.
‘You’ll notice that US markets in particular, have hit all-time highs just recently. They’re actually ignoring the war,’ he said.
‘If you look back historically, wars tend to have short term impacts on markets, because markets are always forward-looking, and we’re looking at larger trends that are occurring, including AI, data centres, and all the investment around that.
‘A lot of what we’re seeing is short term noise,’ said Mr Senese. ‘The big drivers of economies going forward override this short term uncertainty.’
He says Morgans’ local clients tend to invest in good quality stocks. ‘Given the client base and the demographic here in the Northern Rivers, which are predominantly self-funded retirees, they like their dividends and franking credits. But on top of that, we do look at various emerging opportunities, particularly in growth markets overseas.’
Morgans Ballina have been helping Northern Rivers locals with their financial planning decisions since 1987, with principals Leo Senese and Kai Hansen heading up the team here since 2009.
Experience and expertise
Financial adviser Litsa Makrangelos has been in the financial services industry since she was 21, originally working in the government superannuation office in Victoria. Her focus at Morgans is on personalised advice and strategy, and she has a particular interest in special needs children, aged care and retirement planning.
‘Market risk, inflation risk, longevity risk and lifestyle risk are all interconnected,’ she said. ‘Decisions around when to retire, whether to keep working, how much income to draw and how to invest along the way can materially shape the retirement experience. Without a clear strategy, volatility can feel overwhelming.’
Ms Makrangelos says ASIC research shows that many Australians report low financial literacy and limited confidence in managing their finances once they stop working, with essentials such as housing, health care and insurance all weighing heavily on retirement budgets, even as superannuation balances appear larger on paper than ever before.
Despite these factors, it seems that many older people in the Northern Rivers remain broadly optimistic about retirement. Flexible work arrangements and better health also mean many are choosing to remain in the workforce for longer.
With the help of good financial planning – which goes beyond predicting markets and avoiding volatility – Morgans suggest retirement can take the form of a series of stages, blending lifestyle and financial decisions over many years, rather than being a single fixed event.
As Litsa Makrengelos puts it, for many people approaching retirement, preparation may be the difference between fear and lasting peace of mind. She told The Echo it’s important not to get caught up in short term doom and gloom crisis thinking.
‘Remember 9/11 and COVID? There’s always the storm, but there’s the sun that comes through at the end as well.’
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