Baby boomers to boost super

Published in the Retirement Lifestyle, August 2008 by Dale Gillham

More than 4.1 million baby boomers are due to reach retirement within the next few years and an imperative action for many is to look at boosting their super and retirement income.

That is the opinion of Wealth Within Chief Analyst, Dale Gillham who said, many imminent retirees will be asset rich but cash flow poor.

“One of the reasons for this is the fact that compulsory superannuation at current levels has been the norm for the past 10 or so years.

“Other contributing factors include the current economic climate, the shortfall in pensions and a higher standard of living,” Mr Gillham said.

Instead of just jumping into share trading and investing to boost their retirement fund, Mr Gillham’s advice to those nearing their golden years is to adopt specific strategies relative to their situation.

“My number one rule for anyone investing or trading in the share market, and notably retirees, is to reduce risk because how much you make in the market is very much dependent on what you don’t lose.

“Many people play in the share market trying to win big and because of this they take huge risks, but this usually results in big losses.

“Smart investors and traders, on the other hand, look at the potential risks and invest accordingly so that the profits take care of themselves.

“As I always say, it is not how much you make on any one investment that makes you wealthy, it is how much you don’t lose over time.

“Many people in the past 12 months have suffered un-necessarily because they failed to sell shares that were falling heavily in price,” Mr Gillham said.

Mr Gillham believes another important aspect in the long term viability of an investor is to always have the majority of capital invested in safe investments.

“Often I have seen people in or nearing retirement, who make bad investment decisions and take higher risk in order to achieve higher returns.

“What many don’t realise is that with a little knowledge they can still take low risk and achieve superior returns,” he said.

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