Having managed a team of planners for a number of years, one of the common mistakes I have seen with both advisers and retirees is the assumption that a 12%pa average return in equities is better than a fixed return of 7%pa from cash.
For the most part, that’s not a bad assumption to make as we know that sharemarket returns are typically volatile but tend to outperform cash over the longer term.
As financial planners we are taught to expect that clients in retirement should take less risk
