The nine golden rules of investment with Jamie Nemstas

Jamie calls it a 'secret sauce' for investing in retirement

Getting ready for retirement and wondering how to make your investments work harder? Today I’m talking with financial adviser, Jamie Nemstas, one of the two authors behind the book The Golden Years: How to plan a happy and secure retirement.

If you're nearing retirement, have capital to invest and are wondering how to make your money work as hard as you did, Jamie's got nine golden rules of investment he thinks everyone should know and understand. Buckle up for a ride through the do's, don'ts, and golden nuggets of retirement investing from a guy who does it for people with much larger super balances than average.

LISTEN HERE:

• LISTEN ON APPLE PODCASTS

• LISTEN ON SPOTIFY

Highlights of our conversation: the nine golden rules

1. Defining the game you're playing: Jamie kicks things off with a bang, stressing the importance of knowing your financial goals. Are you in it for the long haul or playing it safe? Let's get that strategy locked down!

2. Accepting that things will go wrong: Market crashes, unexpected expenses – Jamie says bring it on! Learn how to stay cool calm and collected when markets don’t do what you expect them to.

3. Not betting the house on the base case: Diversify, diversify, diversify! Jamie dishes up a big lesson on spreading your investments to keep your nest egg safe and sound.

4. Income plus growth equals total return: Who doesn't love a good combo? Jamie explains how mixing income-generating assets with growth investments can turbocharge your retirement fund. And, how to measure and account for your total returns.

5. Being agnostic to product: Forget brand loyalty or having what your friend has – as you head into retirement it's all about the best fit for your goals. We work through how to pick investments based on what they bring to the table, not just their label.

6. Smoothing the ride: Let's smooth out those financial bumps! Some tips for making your investment journey as smooth as a jazz sax solo.

7. Considering asset allocation paramount: The secret sauce to investment success? Asset allocation! We talk about how to balance your portfolio like a pro.

8. Remembering that beta is free: Beta what now? Jamie simplifies this geeky term and talks about how you can ride the market waves without extra costs. And, you can use the word ‘Beta’ too, after this!

9. Embracing the power of rebalancing: Along the path you’ll need to take the time to tweak that portfolio! Jamie explains the importance of rebalancing to keep your investments in tip-top shape.

My favourite - Jamie’s numero uno rule: "Define the game you’re playing." Whether you're in it for steady income or big-time growth, knowing your goals is step one to financial success. Get clear, get confident, and get cracking on your retirement plan! Make it epic!

---

But wait - there’s more

Hey Primetimers!

This is my only midweek newsletter now. The single weekly, (and huge) Epic Retirement Newsletter comes out on Sunday. But Primetime is a little bit different. It’s for ALL the people interested in living well in the second half of life - not just those who are approaching or in retirement. So we’re building out the Prime Time emailer too.

So, to up our game I want your help with two things today!

1. We want to feature your letters on this email, every week. So, send them in to bec@primetimers.net and we’ll get to replying with useful answers and interesting information to help you navigate your prime time years. Our Prime time is anywhere from about 48 - to the point where we hit passive retirement. The best years of our lives.

2. Tip us off on a great topic or story to tell. We want to mix up the types of stories we tell, some as lessons, some as conversations and some as case studies. So, if you know of a wonderful case study, lesson or story we should be telling - tip us off. Again, email me on bec@primetimers.net.

Now, help us learn more about you… really!

Here’s a great letter from Mark to get us started on the letters:

Selling a house and putting money into super

Hi Bec, Thank you for your book. And, finding "The Epic Retirement Club" via Facebook recently could not have come at a better, more opportune time for me.

I have a question regarding putting funds into a superfund following the sale of a house. I simply need to know maximum amount I can put in before penalties apply.

Who would you recommend to answer this question?  I have spoken to my accountant but his answers seemed very vague – he said ask superfund. I asked my superfund and the answer they gave was an exerpt from somewhere (don’t remember from where), Thanks Mark

Hi Mark,

Great question. I’m saddened and surprised that noone will give you a straight answer that at least gives you the facts to consider.

I can only give you general advice, so it’s all in facts - no personal advice here. But it should send you to the right places to look deeper.

Here's what you need to know:

If you are someone over 55, you have several options for contributing to your superannuation fund without incurring penalties.

1. Non-Concessional Contributions (NCCs):

   • You can contribute up to $110,000 per year as non-concessional contributions. These are taxable at your marginal rate.

   • If you're under 75 and meet the work test (if between 67 and 74), you can use the bring-forward rule, allowing you to contribute up to $330,000 over three years, provided you haven't already triggered this rule in the previous two years. This cap changes at 1 July to $120,000 so there are some clever strategies that can be used in the next couple of years to maximise contributions.

2. Downsizer Contributions:

   • Given your age, you can make a downsizer contribution of up to $300,000 (or $300,000 per person in a couple) from the proceeds of selling your home, provided you meet certain criteria. This contribution is in addition to the regular non-concessional cap.

3. Concessional Contributions and Carry-Forward Rule:

   • The concessional contributions cap is $27,500 per financial year. This includes employer contributions and salary sacrifice contributions.

   • If your total super balance is less than $500,000 as of 30 June of the previous financial year, you can use the carry-forward rule. This allows you to carry forward any unused portion of your concessional contributions cap for up to five years. For example, if you haven't used your full concessional cap in the previous years, you can contribute more than $27,500 in the current year without incurring penalties, up to the limit of your unused cap amounts from those years.

Example: If you haven't made any concessional contributions for the past three years (which is probably not the case) (2019-2020, 2020-2021, and 2021-2022), you could potentially contribute up to $82,500 ($27,500 cap x 3 years) plus the current year's cap of $27,500, totalling $110,000 in concessional contributions for the 2023-2024 financial year, provided your total super balance is under $500,000.

You can combine concessional contributions with non-concessional and downsizer contributions to maximise the amount you can put into your super fund. Just ensure you don't exceed the individual caps for each type of contribution.

To ensure you maximise your contributions without breaching caps, I recommend consulting a financial adviser who specialises in superannuation. They can help you navigate the nuances of these rules and provide clear, actionable advice based on your specific situation. Your super fund is a great place to start. They usually offer intrafund advice for no extra cost - you already pay for it in your member fees. They love to help you get money into super!

Hope this helps!

Make your prime time count!

Bec Wilson

Author, columnist, retirement educator, podcast host and guest speaker

PS. If you’re preparing for retirement, our Epic Retirement Flagship Course kicks off TODAY at midday on the 6th June. More info here. Or, there’s another one in 8 weeks time.