Why cash is no longer king

The continuing downward trend of both official interest rates and the Australian dollar suggests that investing in cash may not be the most appropriate strategy for those nearing retirement, so what you should you?

A reliable income stream is a prerequisite for a retirement of choice, having long-term sustainable investment growth is crucial.

However with little chance of rising interest rates in the short term, retirees who do not have adequate income generated by their investments will need to eat into their capital investment base or spend less.

So what should you do?

Firstly, if you have an investment portfolio that is heavily cash-weighted, NOW is the time to talk to your financial adviser and review your investment portfolio in line with the long-term economic outlook.

Then, depending upon your circumstances, you might also consider restructuring your investments to take into consideration more likely growth potential.

Importantly, don’t succumb to ‘paralysis by analysis’. That is, take action and make the most of the current situation and future opportunities.

If you are already retired, you should be thinking about moving out of cash.

If you are planning your retirement rather than leaving your money to languish in low interest savings accounts, redeploy it to pay down debt or bolster your superannuation account, and consider salary sacrifice options.

Ask about our 6-step questionnaire that will help you to identify what’s important at your current stage in life. The team at Collins Mann understands your options are central to you enjoying a retirement of choice not compromise.  For guidance and advice, please call us on (07) 3251 3201.

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