Investment solutions for retirees

CommercialTuesday 25 November 2014
Property-Blog

As many people approach retirement, their thoughts turn to how they are realistically going to maintain the lifestyle they have become accustomed to, once their regular pay cheque stops arriving. These concerns are only heightened for many with data from the Australian Securities and Investments Commission stating that for a modest lifestyle in retirement, a single retiree will require $446 a week, and a couple will need $642 a week – figures many retirees will fall well short of. So what type of investments will yield the best returns for retirees?

Superannuation pensions

Pensions are a regular income paid by an individual’s superannuation fund up until the money and investment balance has run out. Some of the features of this type of income stream include:

  • – Access to extra funds if/when needed
  • – Any growth in the investment becomes tax-free once funds begin to be paid as a pension
  • – Individuals have the choice of how often payments are made and can choose an option which best suits their lifestyle – weekly, fortnightly, monthly, quarterly, annually etc.
  • – The amount paid can be impacted by a poor investment return.

Annuities

You may choose to pay a life insurance company a lump sum upfront, which they will then pay you as a regular income for either the rest of your life, or a fixed term – generally 10 or 20 years. Some key features include:

  • – Payments can either be arranged so that all of the investment is paid back by the end of the fixed term, or an agreed balance can be paid
  • – Investors have the peace of mind that they will receive a regular income
  • – Investors can choose to have their income indexed each year to tie in with inflation
  • – It’s important to note the initial lump sum invested normally cannot be accessed

Property

Property can be a good option for investors who are looking for a reliable income in their retirement. While many retirees immediately think of investing in residential property, commercial property is also a viable option. In most cases the commercial tenant is responsible for the everyday costs of maintaining the property such as rates, water consumption and general upkeep. When it comes to the type of commercial property to invest in, retail is often considered to be a good choice.

Service stations, supermarkets and convenience stores are all good retail property options, as they are always in demand due to their supply of essential everyday items, and when located in the right area, they are likely to offer solid returns.

But before you start hunting for shops for sale, service stations for sale or supermarkets for sale, or make any other investment decisions, it’s important to seek professional guidance. An experienced property and investment consultant can provide advice and assist you in choosing the right property for your needs.

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