5 Important Health-Checks for your Retirement Portfolio in 2024

Retirement portfolios are like small businesses. They generate income from their assets, pay all kinds of bills, and make income payments to their beneficiaries. Some perform well and others languish, depending on their strategy and the broader environment.

Like small businesses, retirement portfolios come in all shapes and sizes. Some are conservative, highly diversified, and really quite boring. Others are geared to the gills, invested fully in mining town rentals bought sight unseen, or neck-deep in crypto and micro-cap stocks.

Reviewing your retirement portfolio

From a financial planning perspective, the most important ‘health checks’ for your retirement portfolio are as follows:

  1. Do your investments align with your risk profile?
  2. Is there a sensible amount of diversification?
  3. Is there sufficient cashflow and liquidity to fund ongoing and unexpected expenses and pension payments?
  4. Are your assets “high quality” and priced sensibly?
  5. Is your portfolio aligned with the times and the broader market environment?

2024 looks like a challenging year for small businesses around the country. Rising prices and a more cautious consumer make some business models unviable, particularly if they have large operating debts. Insolvencies are on the rise and many ‘zombie’ companies are finally being put to the sword after years of low rates and government intervention.

This flows through to retirement portfolios directly. It influences the type of investments that are likely to perform well and those that will struggle. But it also applies more practically to the ongoing management of retirement investments, particularly as it relates to cashflow and liquidity.

Like any good small business owner, investors need to have contingency plans for unexpected setbacks and periods of underperformance. “Hope for the best but plan for the worst” comes to mind in this instance. While we’ve enjoyed strong investment returns over the last six months, the year ahead promises to take many unexpected turns. Point #3 in the checklist above is a key consideration in our view.

If you would like to book a complimentary appointment with one of our Financial Advisers to review your retirement portfolio, please get in touch.

About the author

PJ_Cameron - Financial Adviser Launceston Tasmania

Peter-James (PJ) Cameron
Financial Adviser

PJ provides proactive, strategic advice to help you invest with confidence, structure your affairs intelligently, and get the most out of your unique circumstances. Contact us today and ask to speak with PJ. 

Peter-James Cameron is a Sub-authorised Representative (#1266801 ) of Synectic Wealth Pty Ltd (ABN 24 615 317 194) which is a Corporate Authorised Representative (#1250871) of Alliance Wealth Pty Ltd (ABN 93 161 647 007 | AFSL 449221) www.centrepointalliance.com.au. Synectic Wealth Pty Ltd is the financial services division of Synectic. Learn more here.

This information has been provided as general advice. We have not considered your financial circumstances, needs or objectives. You should consider the appropriateness of the advice. You should obtain and consider the relevant Product Disclosure Statement (PDS) and seek the assistance of an authorised financial adviser before making any decision regarding any products or strategies mentioned in this communication.

Changes to TBAR reporting requirements for SMSFs

A self-managed super fund (SMSF) must report events that affect a member’s transfer balance account to the Australian Taxation Office (ATO) via Transfer Balance Account Reports (TBAR).

Due dates for reporting used to be determined by the total super balances of an SMSF’s members. However, this distinction has been removed.

From 1 July 2023, all SMSFs – regardless of their total balance – must report transfer balance account events to the ATO quarterly. Therefore, you must lodge a TBAR within 28 days after the end of the quarter in which the event occurred. Some circumstances mean these events must be reported sooner.

Common pension events that require a TBAR include:

  • Pension commencements
    When you start getting money from your super fund for retirement (starting a retirement phase income stream). This includes if you get money from someone else’s super fund after they pass away (death benefit income stream).
  • Pension commutations
    If you take money out as a lump sum, stop your pension account, or decide to move the money to another super fund instead of keeping it in your SMSF. (Note, regular pension drawdowns are not reportable.)

Other events relate to limited recourse borrowing arrangement (LRBA) payments, compliance with a commutation authority from the ATO, and personal injury (structured settlement) contributions.

What do you need to do?

This reporting requirement underscores the critical need for proactive communication between SMSF members and administrators. Whether initiating pension payments or making significant lump sum withdrawals, it is vital to promptly inform your SMSF administrator of these transactions.

By keeping us abreast of any pension events, we can help generate the necessary documents and ensure timely reporting to the ATO. Unfortunately, failure to comply with these reporting deadlines can result in nasty penalties and legal repercussions.

Contact us

About the author

Kerrie Stephenson SMSF Accountant Tasmania

Kerrie Stephenson
SMSF Client Manager

Kerrie has almost 15 years’ experience specialising in self-managed superannuation funds (SMSF) administration. She is passionate about helping our clients to meet their compliance obligations with ease and grow their SMSF. Contact us today and ask to speak with Kerrie. 

Contact us

Review your financial situation for 2024

New Year’s resolutions often fade away, but the commitment to pause, reflect and review your financial situation each year is one that should endure. At Synectic, we encourage you to make this your top priority early in 2024. To get started, consider the following:

Read more

$3.5 Trillion -The price of “Equity and Sustainability”

Our Superannuation system is getting more “1984” by the day.

The Government is trying to legislate a “shared purpose” for superannuation that introduces a requirement for “equity and sustainability” to the existing legal requirement to grow member benefits for retirement.

Read more

The Power of Property Valuations in your SMSF

As a trustee of a self-managed super fund (SMSF), your role is not just about compliance and ticking boxes. It’s about maximising the potential of your investments and securing a prosperous future for your fund and its members. Amidst a diverse array of possible assets and investments, one asset class demands special attention: property.

Read more

Benefits of Direct Australian Share Investments in Superannuation

There are significant benefits associated with taking an independent, individually managed approach to investments in Superannuation. This is particularly true as investment balances grow and retirement planning commences.

Australian Superannuation funds are under the spotlight as the retirement system adapts to ageing demographics and longer life expectancies, and the retirement savings pool grows to become an increasingly large asset on the Nation’s balance sheet. The Superannuation Guarantee (SG) was introduced over 30 years ago and the system has matured. Funds under management have since grown to $3.4 trillion (as at the end of December 2022).

Read more

International shares for Aussie investors

Many Australian investors prefer to invest in Australian shares rather than international shares. It makes sense for a range of reasons:

  • it’s a good rule of thumb to invest in what you know;
  • franked dividends provide tax-effective income; and
  • the Australian share market has performed strongly over the long-run, outperforming broad international share markets (MSCI World ex-Australia) by around 2% p.a. over the last 20 years.
Read more

Investment decisions in a time of inflation risk

“I don’t want my super going to zero,” said a prospective client during a recent risk profiling discussion. “I want conservative investment decisions that won’t lose money over time.”

In uncertain economic times it’s tempting to avoid investment decisions and hold onto cash. This is opposite to the temptation to chase investment returns while everyone else is making money hand over fist (think 12 months ago).

Read more

Financial planning in the new financial year requires a long view

Bill Gates famously quoted that, “Most people overestimate what they can do in one year and underestimate what they can do in ten years”. Regardless of your view of Bill Gates (and whacky conspiracy theories abound), the adage captures something inherent in human nature. We’re impatient to achieve our goals and equally, we aren’t accurate long-term thinkers. This doesn’t bode well for robust financial planning.

Read more

SMSF Investments

Recently I’ve had a number of clients enquire about the pros and cons of setting up a Self-Managed Super Fund (SMSF). They have an instinct to get more control over their investments in Super. But they’re hesitant about the additional work involved in running a SMSF and are unsure of the costs.

There’s no perfect answer to the question, assuming one has sufficient funds to make it cost-effective. Anecdotally, I have seen a broad range of SMSF outcomes.

Read more