Retirement planning – will you outlive your savings?

Retirement PlanningAs you think about your retirement planning, here’s the good news: there’s a great chance you will live longer than you think you will! The results of a UK survey show a strong tendency amongst retirees to underestimate how long they believe they will live. So, for instance, respondents thought that of 10 men in good health at age 65, only two of those would live to the age of 90. In reality, that number is closer to four – and rising.

That has to be good news doesn’t it?

Well yes, to a point. The good news starts to lose its shine when we look at the typical retiree’s financial situation.

Many Australians don’t allow enough savings for retirement

The reality, according to a report released just this month by National Seniors Australia, is that the retirement planning of around a quarter of Australians doesn’t sufficiently allow for their finances to last as long as they’ll need to.

There are some – quite a lot, in fact – whose retirement savings are insufficient from the outset. Another UK survey suggests that 67% of people are ‘somewhat or very likely to work part-time in retirement’. There’s no reason to think this number would be significantly different in Australia.

And then there are those who have carefully planned their retirement savings using some questionable assumptions.

First, there are those, as mentioned, who underestimate how long they will live, and therefore how long their savings need to last.

Then there are those whose retirement planning fails to factor in likely higher costs of living in later life. According to National Seniors, 61% of retirees plan to spend a steady amount throughout their retirement.  Thirty-six percent plan to spend more in the early years of their retirement in later life. Both these groups underestimate the potentially high costs of their care in later life.

Retirement Planning 1
Having clarity about the real cost of living is important

Quoted on the IFA magazine website, National Seniors’ research director Professor John McCallum warns that many retirees need to be clearer about how their plans align with likely reality. “Medical and aged care bills tend to get higher as we get older and few people are ready for this”.

The overall message of all this is that professional guidance is always a good idea. This is the case even if you think you have plenty of savings to protect your future. At the very least every retiree should have someone with ‘distance’ from their situation who is willing to give them a reality check.

Comprehensive analytics and research

We invest a great deal of time and effort researching the best tax-effective investment strategies for our clients. We have developed a number of systems to manage and track the marketplace.

The investment landscape always evolves and it is more important than ever to consider your investments and superannuation funds carefully. We pride ourselves on being experts in researching opportunities, investments, and strategies that fit in with your retirement goals. We want, our clients to get on with enjoying their life rather than worrying about money.

For an obligation-free conversation about your financial future, please contact us on 03 9603 0072 or at

Phillip Richards and Robert Rich
Endorphin Wealth Management

Financial Advisor Phillip Richards
Phillip Richards is a qualified Financial Advisor with over ten years’ experience. 
Contact Phillip today to discuss how you can build your own wealth and plan to reach your retirement goals.

Financial Advisor Robert Rich
Robert Rich is a qualified Financial Advisor with over nine years of personal investment experience. 
Contact Robert today to discuss how you can build your own wealth and plan to reach your retirement goals.



This information is general in nature and does not take your personal situation into account.

Contact Us for quality financial advice so you can feel good about your future.

Federal Budget 2016

BudgetThere’s always an added sense of excitement for Federal Budgets handed down in an election year as the government attempts to balance the books whilst balancing the expectations of a nation.

We’ve taken a close look at the budget itself and the expert commentary on the proposed changes to our financial system and compiled a list of the most relevant items to most people.

The Federal Budget details the government’s intentions for revenue raising and expenditure for the forthcoming year and it is important to note that it is still to be considered by parliament before the new financial year.

$500,000 Lifetime Non-Concessional Cap to replace current $180,000 per annum Cap

After tax contributions made to your superannuation are currently restricted to $180,000 per annum (or $540,000 under the three year ‘bring forward’ provisions). The government has proposed to introduce a lifetime cap of $500,000 and this may restrict a number of existing re-contribution and Centrelink sheltering strategies.

Reduction of the Concessional Contributions Cap

Currently set at up to $35,000 for clients over 50, the before tax contributions usually through salary sacrifice has been a very valuable way to make contributions to your superannuation account whilst saving on tax. The government intends to reduce the amount to $25,000 regardless of your age.

Allowing ‘catch up’ Concessional Contributions

From July 2017, the government plans to introduce a policy that will allow individuals with a superannuation balance of less than $500,000 to ‘catch up’ on up to five years of the new $25,000 cap if you were unable to make the contributions over this timeframe.

Reduction of the Division 293 tax threshold

Currently, high income earners earning over $300,000 are required to pay an additional 15% tax on contributions to their superannuation fund. This threshold is proposed to reduce to $250,000, meaning more Australians will be required to pay the additional tax.

Introduction of a $1.6m superannuation transfer balance cap

Money held in a superannuation fund that is in pension phase currently pays no tax on the earnings it makes within the fund. The government wishes to introduce a cap on the amount that can be held in this environment, meaning that any excess funds will need to be held in a separate account where any earnings will be taxed at 15%.

Marginal Tax Rates

A minor tax cut has been proposed for people with income over $80,000 per year. It will mean a maximum tax saving of $6 per week for people earning more than $87,000 per year.

Taxation on Small Businesses

The government intends to increase the annual turnover for a Small Business from $2m to $10m. They’re also planning to reduce the company tax rate down from 30% to 25% by 2026-27. Initially, small businesses with a turnover of less than $10m will be reduced to 27.5% tax from 1 July 2016.

So potentially a few interesting policies that could have a considerable impact on our client’s financial future. We will of course be in direct contact with affected clients if any of the above is legislated and will affect your wealth moving forward.

For an obligation free conversation about any of these changes or your financial future, please contact us on 03 9603 0072 or at

Phillip Richards

Director and Wealth Advisor

Endorphin Wealth Management

SMSF vs Wraps

SMSF vs Wrap

There is a growing trend towards investors managing their own superannuation ($68.7bn in 2000 compared to $594.8bn in 2015[1]). With so many funds being managed outside of the large retail and industry superannuation funds, careful consideration should be given to the products and structures that hold these savings.

This swift rise in the popularity of SMSFs has brought promotion in the media, and has led to an increasing number of people contemplating if their industry or retail superannuation fund is providing them with the returns and flexibility that today’s modern and savvy investor desires.

There is another option that provides a similar level of flexibility and control to a SMSF, but without taking on the responsibilities of a trustee.

A “wrap” is a platform that acts like a gateway to thousands of wholesale managed funds, direct shares, hybrid securities, fixed interest investments and other asset classes. The wrap provides the investor with a consolidated report on their financial position, and removes the administrative and compliance burdens that come from trading and holding multiple assets within a portfolio.

Even the Australian Securities and Investments Commission (ASIC) has commented that it does not want to see “an influx of (SMSF) trustees who are ill-equipped to cope with the responsibilities and obligations inherent in running an SMSF”[2].

Generally speaking, the products will suit the following investors who:


– Prefer to be ‘hands on’ and dive into the details

– Have over $200,000 to invest due to the costs associated with setting up and annual reporting to the regulator

– Want access to owning residential property and / or alternative investment such as collectibles (artwork, antiques etc) in their superannuation


– Have a small starting balance (although the sky is the limit!)

– Don’t have the time to fulfil the obligations of a trustee

– Are not concerned with the minute details and are happy to work in conjunction with an advisor

Overall, either option can provide an investor with advantages and disadvantages as each client’s circumstances will be different. As with all financial strategies, it is always recommended to speak with a professional about your own personal circumstances to assess the suitability to your own situation.

We regularly provide advice to clients who either hold their superannuation through a wrap account or a SMSF, and we pride ourselves on being experts in both investment styles.

For an obligation free conversation about your financial future, please contact us on 03 9603 0072 or at

Phillip Richards

Director and Wealth Advisor

Endorphin Wealth Management


[1] APRA Statistics Quarterly Superannuation Performance March 2015

[2] ASIC Report 337, SMSFs: Improving the quality of advice given to investors, page 5