With the bitter taste of the GFC still lingering in the mouths of Australian retirees, the ‘once bitten, twice shy’ principle remains a core consideration for many when it comes to financial decision-making.
Investing your hard-earned retirement savings can be a daunting prospect, so where do you start?
Right at the beginning, say the experts, with a clear picture of your superannuation and savings, spending plans going forward and your individual risk tolerance.
In an ideal world, diversification is the name of the game. By spreading your assets across different investment options you’re best placed to ride out the peaks and troughs of the financial markets. Generating higher returns on your savings, however, means accepting greater risk.
Therein, says Chris Grice, General Manager with National Seniors Australia, lies the problem.
Turbulent economic environment
“The passage of more than a decade has done little to allay the concerns of those whose financial wellbeing rests on a knife edge, thanks in no small part to the GFC. For many older Australians gambling on a turbulent economic environment simply isn’t an option.
“Our own research suggests that 23% of retirees cannot tolerate ANY annual loss on their savings portfolio. That’s huge proportion of the retired population who feel financially exposed.
“Retirees are uniquely vulnerable to a volatile market, compared with those still working. It’s that reality which drives many seniors to seek a stable, secure savings option.”
National Seniors’ research also indicates a strong preference within the retired community for income for life and regular stable income over potentially higher income. So, what does a conservative savings option look like?
“Many investors favour term deposits,” Chris says. “The appeal really is their stability and simplicity. You deposit a lump sum for a fixed interest rate over a set period of time. At maturity, the deposit is paid back to you along with the interest earned. No gambling and no nasty surprises.
“They aren’t just an option for conservative savers either. For those who feel they have enough knowledge and a sufficient buffer to manage the risks of other investment options, such as shares or property, it’s still wise to have regular access to cash. By scoping out your needs months and years ahead, you can help prevent the likelihood of having to prematurely cash in an investment.”
Why choose a term deposit?
- Low risk. Fixed rates for a fixed term – unaffected by the highs and lows of the market – and little to no chance of losing your money.
- Low maintenance. Set and forget, until maturity.
- No fees. Just make sure you won’t need to withdraw funds before the end of the term and you won’t incur fees.
For Chris and the team at National Seniors, providing support to retirees wrongfooted by an unstable retirement income system, and left fearful for their financial future, remains critical.
“Many of those who were already retired, or on the cusp of doing so, when the GFC hit have little capacity to weather a further financial storm. There’s no one solution to the problem, which is why we’re taking an holistic approach.
“We actually provide free, independent financial literacy services, so that seniors are better positioned to manage their money and understand their risk tolerance. Join us today to access help with navigating your superannuation, better understand investment options and generally boost your knowledge of complex financial principles.
“We’ve also recently partnered with Auswide Bank to offer savers a low-risk, no-fee, competitive Term Deposit. By saving with Auswide and National Seniors, you won’t just protect your retirement income, you’ll also support our work to improve outcomes for all older Australians.”
Certainty in a world of change
With competitive fixed interest rates and backed by the Financial Claims Scheme, National Seniors Term Deposit offers:
- Competitive interest rates on $5,000 or more
- No monthly account or transaction fees
- Flexible investment terms
- And is Government guaranteed.
To find out more visit nationalseniors.com.au/termdeposit or call the National Seniors Term Deposit team on 1300 342 149.
National Seniors Australia Ltd ABN 89 050 523 003 arranges deposits as an authorised representative (AR 282736) of Auswide Bank Ltd, ABN 40 087 652 060 AFSL 239686. Full details of our relationship are contained in our Financial Services Guide. Any advice we give you about these deposits and any related payment services is general advice and these products may not be right for you. Full details are set out in the terms & conditions which will be provided to you, together with the Financial Services Guide. We recommend that prior to making a decision to invest in a term deposit you consult with a professional financial advisor. This account is protected by the Australian Government deposit guarantee. Up to $250,000 of deposits in ‘protected accounts’ held by an entity with Auswide Bank are covered under the Financial Claims Scheme. Information on the Financial Claims Scheme is available at www.fcs.gov.au
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