Question: If I began a transition to retirement pension this month (May), how is my maximum pension worked out? Can I then draw 10% out again in July?
Answer (By Paul Rickard): The maximum pension is calculated as 10% of your account balance on 1 July or when you start the pension. So if you commence a pension on (say) 15 May, it will be 10% of your account balance on that date. Unlike the minimum account balance, it is not pro-rated – you can take out the full 10%.
And yes, you could potentially take out another 10% on July 1 (based on the then current account balance).
Question 2: When I compare the stocks that the Switzer Super Report seems to follow i.e. Resmed, Ramsay Health Care, CSL, etc. to the exchange-traded fund iShares Global Healthcare IXJ, the ETF seems to outperform a portfolio of these stocks over most timeframes. I appreciate that IXJ is global but would be interested in your view.
Answer 2 (By Paul Rickard): I would be really surprised to see that IXJ has outperformed CSL or Ramsay over “most time frames”.
For example, IXJ’s five-year return (including dividends) is quoted at 22.2% per annum to 31 March 2015. Ramsay has gone from around $14.00 in March 2010 to close March 2015 at $67.24. Excluding dividends, I calculate this return to be 36.8% per annum.
Also, it looks like IXJ lost about 4.5% in April.
That said, investment in global healthcare stocks has proved to be enormously successful and as such, IXJ is one of the best (if not the best performing) ETF on the market (over most timeframes). As you say – it is global, and you are taking on a currency risk.
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