Retirement dreams and the global pandemic

Although it’s now 2021, the impact of coronavirus continues to have a ripple effect in every country around the world, and we are still navigating volatility within global markets. During these challenging times, the pandemic has not only shaken societal norms but has also made some Australians rethink their plans for retirement.

Allianz Retire+ conducted research during the height of the pandemic here in Australia. The research surveyed 1,007 retirees in May 2020 to understand how the economic impact of COVID-19 was affecting them and their retirement dreams.

The survey showed that only one-third of the respondents felt confident in their financial position and nearly half were monitoring their investments much more closely due to COVID-19.

While the results indicated that the surveyed retirees were lowering their retirement expectations, here at First Financial, our clients have been able to maintain a positive outlook.

We spoke with Principal Brad Jackson about how our unique Investment Philosophy has helped clients to continue feeling confident in their financial future.

Retirement perceptions

Retirement perceptions

While the Allianz Retire+ survey indicated that COVID-19 has affected over 1,000 current and prospective retirees’ lifestyles, investment actions and retirement perceptions, Brad believes that this isn’t the case for our clients.

“I can understand how some people would be feeling like this, but I believe if we surveyed our clients and ask them the same questions, we would get incredibly different answers. I actually think that the majority of our clients are feeling really good… especially considering where they’ve been.

Yes, there has been market turmoil, but they haven’t changed their retirement dreams – because they haven’t needed to!

The three bucket approach we utilise as part of our Investment Philosophy has ensured they have sufficient retirement income when markets are in pain. While the portfolio value can fluctuate, their day to day income is secure within bucket one, so there has been no forced selling from bucket three.”

Brad also recognises that most First Financial clients have fortuitously benefited on the returns front when reviewing the 2019-2020 financial year in comparison to the 2020-2021 financial year to date. He continues:

“Broadly speaking, the returns they received in the full financial year 2019-2020, no matter how negative, have been completely unwound by the strong positive returns they have received in the seven and a half months this financial year to date.

With such positive returns since 1 July 2020, clients are being rewarded for holding their nerve through the grief they experienced when the pandemic first hit investment markets. It just shows us all again how perilous it can be to try and predict market movements in the short term.”

The value of professional advice

The value of professional advice

Another element within the study found that 79 percent of the surveyed retirees did not seek financial advice during COVID-19. This is an unfortunate figure, as we know it can be extremely beneficial to have a trusted financial adviser – someone who knows your personal situation and can help you navigate uncertainty with sound advice and assurance.

Professional knowledge and support can be powerful tools in helping you maintain focus on financial goals. With an adviser’s help it’s even possible to continue building wealth during the most unsettling times.

Support now and into the future

Support now and into the future

While the impact of COVID-19 has brought instability for some, First Financial clients have benefited from the experience and professionalism of our dedicated team.

We take great pride in offering our clients financial advisory services appropriate to their unique circumstances. We also assist with estate planning and can help you build a stronger financial position.

Our Financial Advisers are here to support you now and well into the future. If you’d like to discuss your current financial situation, please contact us today. Read more Retirement Planning articles.

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