Investment advisor’s are predicting older Australians’ will be moving savings to the share market to boost their income.
This will come after the official interest rate was slashed to a record low of 1.75 percent this month, and is predicted to go even lower come August.
What does this mean for retirees living off nest egg interest income?
A significant reduction in those funds, leading to a poorer quality of day to day living. This could see many Australians’ accessing less of their savings, and dipping heavily into capital.
As of December, Super assets held in Australia totalled $2 trillion, with only $166 billion being cash investments. This is a small proportion when compared to the amount of retirees holding investments such as Managed Funds, Property, Bonds and Term Deposits.
Shares have previously been known as scary ground for the older generation, who have seen a long list of companies bite the dust. The most recent of these being our very own Dick Smiths.
But with a current yield from most stocks of approximately 5%, we could see a shift and tilt in the minds of retirees towards this type of money management.
When changing to a stock portfolio comes generally cheap and easy, alongside the boosts that markets get from having a lower interest rate, money invested in shares will be a sunny place to grow prosperity.
For more detailed information on how this market change could affect you, please contact on 07 5444 1022 or email info@gpla.com.au.