Aussies urged to check finances ahead of possible rate cut

Australians should be focused on how to protect their long-term financial security ahead of the Reserve Bank of Australia’s interest rate decision tomorrow.

The RBA is expected to cut interest rates from 1.5 per cent to 1 per cent, the first interest rate move in over two years, and there could be a second cut later in the year.

Head of advice at Dixon Advisory, Nerida Cole, said there were concerns whether this move would be enough to stimulate the economy.

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 “With the federal election result decided we should be able to see some early action to help give the economy some support. Government action may be required in the form of continued spending on infrastructure to counter stagnant private sector investment.”

She urged investors to make sure they considered the impact falling interest rates would have on their finances; a rate cut would be good for borrowers but put pressure on retirees and pensioners.

As well as the RBA meeting, Tuesday would also see the release of retail sales results which were expected to be muted as more customers shop online. This was then feeding through into jobs and property as there were fewer in-store positions and demand for large warehouse spaces to process online orders rather than stores.

“The signs are pointing to the need for investors and super fund members to prepare for an ongoing slowdown of the economy in 2019. The cost of retirement is one of the biggest challenges all Australians face so getting the right advice is critical.

“Looking at how your investments are holding up against a slowing economy can help you decide which investments you want less of and what investments you want more of into the future – particularly as you get closer to retirement,” Cole said.

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