Hi,

Have just retired early (56 years) of age after 34 years with Qld Police. I am currently living in central Qld and now need to determine how to deal with my Super. I am currently talking to a large firm of financial advisors but would like other opinions of the best way to make my money work for me. I am on a defined benefit scheme.

//but would like other opinions of the best way to make my money work for me//

Don't solicit financial advice from anonymous idiots on the internet. These are the sort of people who think the best way to make their money work for them is by investing in Nigerian royalty. Talk to a professional.

Certainly wasn't intending to solicit sound financial advice , as I am currently doing so through a large reputable firm, but just interested in other peoples experiences and ideas. It's a bit confusing this whole thing and some personal experiences might clear a few things up. Thanks for the reply , appreciated

Hello Jinxy

One size doesn't fit all. It really depends on knowledge and education and an interest in financial investing. Some people prefer to pay an expert for advice on everything and leave it all to them, but to get good advice costs money and even the experts get it wrong sometimes. You only have to look at some of the ET Funds to see that after you take off their management fee they sometimes don't even meet the index.
I did have a financial advisor for a time, but found that he was costing me an awful lot of money, so I decided to do it all myself through an SMSF. However I did learn a great deal from him and have an interest in learning and reading as much as I can to develop my knowledge. It's a constant learning curve as market conditions are changing and developing all the time and nothing is simple straight forward and easy. If you take this route my advice is not to be impatient and think you will always make money in the market. As someone said succinctly "it's not timing the market, it's time IN the market that usually creates the best results"
Like anything in life, it takes a certain amount of effort to achieve anything and financial independence is no different. Knowledge is required to monitor your investments and above all read all you can particularly advice from proven investors such as Warren Buffet, Peter Lynch, Robert Kiyosaki (Rich Dad Poor Dad) Benjamin Graham and Jim Rogers. Then pick out what makes sense to you and follow it.

Hi Jinxy, my advice is to talk to anyone but a "professional". My experience in watching what happened when my parents "talked to a professional" is that this is the quickest way of losing money you can find.

One professional, invested their money in two financial organisations, probably because they paid the highest commission, which resulted in the loss of about 20% of their nest egg.

The next advisor put a fair bit in an organisation which did not actually go broke, but got into trouble, & took 6 years to pay back all their investment, with no earning in this time.

I worked for the Telford property trusts resort operating division. Highly recommended by professional investment advisors, they cost thousands of oldies million of dollars. I was there when 4 of the directors of the financial arm went to prison for the way they were handling their investors money.

Learn a bit yourself, & be cautious, & you'll do OK. One word of advice however, be careful of toys. Although one of my classic cars has tripled in value, I am way behind over all with them. My 15 remote controlled aircraft have been a lot of fun & frustration, but a dead loss financially.

However my home on 20 acres some distance out of town, bought to run the kids horses 24 years ago, has increased by 500%, as the city has come out to join me. Wonderful, but only of any real advantage if I sell it.

Best advice, if you have something you always wanted to do, go & blow what ever it takes on doing it. That is what the kids will do, if it's still there when you kick the bucket, so beat them to it.

Get good quality proper advice, don't go to a bank (they will sell you what the bank recommends for them) A good financial planner is worth their weight in gold. Make sure they have at least a CFP qualification or Masters degree and provide a money back guarantee on their advice.
My adviser cant guarantee returns but he guarantees his advice or no charge.
If you have a defined benefit scheme then you are one of the lucky ones.

G'day there JINXY...

Congratulations, you're now eligible to re-join the human race! Seriously, I did a bit over 32 years with NSWPOL retiring as a Detective Sergeant. The job together with the Association, were kind enough to fund several professional consultations with a well known company, who specialised in post retirement financial advice.

My wife and I found it very helpful, though thoroughly bewildering and ambiguous, trying to come to terms with the Government continually moving the taxation goal posts as it were? With certain tax concessions, and the rules being continually amended on specific classes of investments. A most puzzling exercise all round we found?

Moreover I had a 100% war pension, from my military service overseas, paid through DVA. Though not taxed, any income derived from investing that pension, was taxed. So the whole deal proved to be relatively complex for us as I said, we needed to include that income into the equation as well. Anyway, we seem to be OK and I'm in my mid seventies now, and we live quite comfortably to use that old cliche. Nevertheless I would urge caution, whatever you decide to do my friend.

Best of luck to you and enjoy your well earned retirement.

Nobody can guarantee any % return.

As you have no experience with investments, look for something with a government-backed fixed return.

Alternatively consider buying a house/unit if you have the funds. If you are a bit handy with tools, buy something that you can improve.

Let/rent it out yourself, set a fair rent, not looking for top rent as moving tenants cost you money.

Give them a deposit book to a rent account into which nothing else is paid. (They will probably use an internet deposit)

Do not expect anybody to live in something you would not live in.

Do your own maintenance if it is within your capability.

You will not become a 'millionaire' but you are unlikely to lose money/capital and you will have an income.

Look around, there may be small towns near you where houses are cheap but rental accommodation is in demand.

Get a good accountant!

I agree with kirby 483.

If you do get an advisor make sure that he is not on a commission with any products he suggests. My original advisor declared right from the start that his income was in no way related to any kick-backs and was only fee based. I could talk to him at any time on the phone and he visited me regularly at home and why I eventually couldn't afford him. Many years ago I walked into my local bank for some advice and quickly walked out again when I realised that only recommended bank products were mentioned. Look at CBA and the millions they have offered to their customers for bad advice after they were found out. For this and other reasons I now do my own research and invest accordingly. I think there are probably some good investment letters out there that do make recommendations following their own research, but these will cost you and of course they tend to cherry-pick their successful investments examples when spruiking their products and expertise.
If investing was easy we would all be rich !

Very interesting replies. I do have a house which is being rented out and the financial advisor has advised us not to pay out the home loan until I reach 60 as the loan amount would be money I can use to increase my wealth whilst the tenant pays off the loan. I will be 56 when I officially retire and can access about $195,000 tax free in January. The rest (majority)of my super will be taxed if used until I turn 60 then it's all tax free. Very interesting times ahead. P.S I already have 3 motorbikes so at least I don't have to spend any money buying one.

As an adjunct to my last two posts I have always been a bit of a fan of Roger Montgomery, who runs his own fund and is often sought for his always very logical reasons for liking a particular stock or his opinion on current market conditions on Sky or similar TV presentation. As an example he can be found here on Youtube expressing his views in a very eloquent and articulate way that shows how his method of investment works for him. I always take note of what he has to say and it might prove of interest to some others here.

https://www.youtube.com/watch?v=HjdU9bqEoFI

An awful lot of people invest in real estate, but like anything else, it doesn't always go up in value. As an ex builder I would not want the worry of tenants and certainly wouldn't want the hassle of constant maintenance. It also means a rather illiquid investment with most of your money tied up in it. However it works for a great number of people so depending on circumstances should be considered as an investment, but bear in mind stamp duty, conveyancing, rates and agents fees.

Jinxy, welcome to the big dilemma.
Look at what assets you are likely to have when you reach pension age.
If you are entitled to the old age pension you may find that the
solution can be quite simple.
For now just open a couple of fixed deposits and think about it.
I can tell you this much; the way things are looking now, no one has
a clue about what to do. My son is a financial advisor and I think he
is looking a bit worried about it all.
He just does not want to talk to me about it.
He knows what I have and he has not suggested any change.

Most advisers are linked to major companies as they generate the
research information for them. When you get your super make sure no
one investment in a bank is over $250k and if it is in large banks
keep it well under that amount in each. Subsidiaries such as St George
are counted with Westpac as one institution.

I do not have the solution and I have been looking for it for years.

I would be asking about and researching about scams associated with retirement etc to make sure you don't get caught out.

If you are going to own investment property, I suggest you buy industrial property.

A small to moderate warehouse office complex will produce a much better return than the same investment in rental housing, & if bought wisely, will be much less hassle to own & maintain.

Don't buy an investment property in retirement,

the only reasons you buy property is for tax benefits and capital appreciation, neither are any good for a retiree looking for income.

In your case you will not pay any tax after age 60, so tax deductions are no good for you, and you can't eat bricks, its all about income.

As for rent on average residential property has a 4% gross yield, Commercial property 7% and industrial 6%.

So a residential property giving you gross 4%, minus insurance, council rates, land tax, management fees and maintenance, you will have a net return of 2.5%. Inflation is running at 2.8%, so you are slowly going backwards.

You could walk into any credit union and get more than 2.5% without any hassles. (not that I would recommend putting al your eggs in one basket) a good diversified portfolio of shares, bonds, property and cash will help even out returns.

In retirement owning residential property does not add up, better returns can be found elsewhere, as I said earlier a good financial planner will help you.

Again, I couldn't fault what Kirby483 says. Everyone has different circumstances, and as I said in my first post "one size does not necessarily fit all"

janelle@highndsitewealth.com

These people are great and deal with retired police officers, they are also qld based