As countries around the world isolate from globalisation, we’re ​seeing an increasingly fragmented global economy. While ​governments manage their economies in response to local and ​global pressures, they’re pushed and pulled in different directions. ​Some countries, like the USA, appear to be thriving, while other ​regions, like Europe, are struggling. Three overarching themes look ​set to shape the global economy in the year ahead: ​transformational technology, geopolitical conflicts, and the actions ​of central banks to win the war against inflation.

Productivity-boosting technologies

In recent years, we’ve witnessed ground-breaking developments in ​generative artificial intelligence, life sciences and sustainable ​energy.

If you’re old enough to remember, we’ve seen times like these ​before. The 1990s was also a transformative decade when the rise ​of the world wide web and the widespread take up of personal ​computers and mobile phones reshaped the global economy. We ​saw increased productivity, new jobs and the birth of a new digital ​economy.

Today’s technological advances could also unlock higher growth ​and deliver long-term productivity gains as they roll through ​industries across the world. However, with US companies – ​specifically the ‘magnificent seven’– driving most of these gains, ​the benefits won’t be evenly distributed.

Heightened geopolitical ​temperature

For many commentators, geopolitical tensions are at their greatest ​heights since the end of the second world war. What’s more, ​tensions percolate across several fronts: the Middle East, Europe ​and among China, it’s neighbours and the USA.

As people, we’re naturally concerned about these conflicts. ​However, it’s important to note that, as long as factories continue to ​produce and trade continues around the world, the global ​economic engine will keep turning. Where we could see economic ​risks is if geopolitical deterioration makes it hard for major ​economies to operate, or leaders make politically motivated ​decisions that are harmful to their nation’s economic interests.

On a positive note, geopolitical tensions aren’t always negative for ​investors. Certain assets can perform strongly, such as assets that ​support energy-independence or strengthen cybersecurity.

Central bank actions to rein in ​inflation

Although inflation is coming down, it has proven to be stickier than ​expected and interest rates have remained higher for longer. ​Around the world, high interest rates have significantly eroded the ​savings of households and businesses and have increased debt ​levels. The longer central bankers wait to cut interest rates, the ​greater the risk of recession and financial instability, with adverse ​consequences for households, businesses and the broader ​economy.

In summary, the global economy faces a bumpy road ahead. The ​three issues to watch include the timing of central bank interest ​rate cuts, the resilience of consumer spending and whether ​productivity-boosting innovations can offset geopolitical ​headwinds. Tensions between these drivers makes forecasting ​difficult, with likely outcomes ranging between continued growth, ​flat growth or a recession that brings financial instability.

Fortunately, there are three ways you can seek to protect your ​retirement savings from an uncertain global economy.

• Take a long-term view. When there’s a lot of political and ​economic news, it’s important to take a medium to long-term ​view and avoid making knee-jerk investment decisions.
• Diversification. Spreading your investments across regions, ​assets and companies is a strong defence against geopolitical ​uncertainty, volatility and dispersion of returns.
• Expert investment management. Professional investment ​managers watch events closely, monitoring geographic and ​sector risk to smooth out negative impacts while also ​positioning for the opportunities that emerge.
  

How we can help

If you have any questions about how ​technological innovation, geopolitical ​risks or interest rate changes are ​impacting your investment portfolio, talk ​to your Count Financial adviser.

They’ll be able to advise you on whether ​any adjustments to your portfolio are ​warranted, taking into account your ​financial goals.

02

Four ways to ​psychologically prepare ​for retirement – before ​you leave work

Retirement can feel like a shockwave, ​particularly if life’s circumstances or a ​redundancy means that you don't get to ​choose the timing. We outline below how to ​set up healthy habits and structures now ​and set out why having a financial adviser ​can help smooth your transition.

Leaving work is one of life’s biggest changes. It’s on the scale of ​other big transitions like adolescence or new parenthood. This is ​because retirement forces us to reset where we fit in the world and ​find our sense of meaning in new ways.

Getting psychologically ready for retirement means we must face ​up to what we lose: the steady pay cheque, status, collegiate ​relationships and a highly structured week. We need to proactively ​replace these losses with new gains, such as pleasurable activities ​and relationships that give us meaning and purpose. Here are four ​ways to prepare:

1. Dial down your work hours

Consider gradually withdrawing from full-time work by shifting to ​part-time work or consulting before you retire. By easing into ​retirement, you’re better able to diffuse the shock that comes from ​no longer working. And by reducing your work hours, you’ll free up ​the time and mental energy you’ll need to invest in social ​connections and initiate new activities.

2. Dial up your non-work activities

The pleasure of endless leisure time can quickly turn to boredom ​when you’re retired. So, in the years before you retire, build a ​scaffold of new activities. When you have a motivating reason to ​get up each day, it’s much easier. You’ll strengthen your sense of ​purpose, meaning and identity for your post- work life.

Start by developing a portfolio of personal activities in the same ​way that you might diversify your investment portfolio and use ​these activities to create structure and rhythm. Volunteer, learn a ​new language, take up a sport, find new hobbies, write a book, ​deepen your religious practice or set up a business. Be brave and ​proactive in exploring your options rather than waiting for activities ​to come to you. Use activities to strengthen your identity and boost ​your self-worth so that when you meet someone for the first time ​you can confidently describe yourself without referring to your ​career.

3. Dial up your social life

Without regular contact with colleagues, loneliness is a common ​problem retirees face. No one’s calling, no one’s emailing, no one ​needs your help. Use the time leading up to retirement to develop a ​full social life. It can be helpful to surround yourself with people on ​the same journey. Consider joining community groups, advocacy ​groups, men’s sheds, senior sporting groups, choirs, walking clubs ​and book clubs before retirement. Invite people over for a meal and ​build community around your neighbourhood or your personal ​interests.

As much as possible, set up a rhythm of regular social ​commitments. That structure will help to replace the discipline of ​going to work.

Another reason to invest in a social network is to prevent ​overwhelming your close relationships. Because if, after a long ​career, you’re suddenly spending a lot of time at home, you risk ​disrupting your partner’s rhythms. Plus, being socially active will ​relieve any pressure your partner might feel to keep you busy.

4. Plan your finances

It can be psychologically challenging to leave the certainty of a ​regular pay cheque. And when you’re accustomed to your ​superannuation and other savings growing year on year, it can be ​hard to spend what you’ve saved.

Having confidence that your finances are in good shape makes the ​transition to retirement much easier. That’s why it’s critical to have ​a financial plan. You’re then able to retire knowing how much you’re ​able to spend – and that your finances are in safe hands, whatever ​the future holds.

[1] Australian Bureau of Statistics

[2] Australian Bureau of Statistics

[3] Australian Bureau of Statistics

[4] Australian Bureau of Statistics

[5] Australian Bureau of Statistics

Talk to your Count Financial adviser

If you’re planningto retire in the next ​five years, talk to your Count Financial ​adviser about how to put in place ​plans to set you up for financial, social ​and psychological success in ​retirement.

The numbers

This document containsgeneral advice. It does not take accountof your objectives, financial situation or needs. You should considertalking to a financial adviser ​before making a financial decision. This document has been prepared by Count Financial Limited ABN 19 001 974 625, AFSL 227232.Count is 85% owned by Count ​Limited ACN 126 990 832 (Count) and 15% ownedby Count MemberFirm Pty Ltd ACN 633 983 490. Count is listed on the Australian Stock Exchange. CountMember Firm ​Pty Ltd is owned by Count Member Firm DT Pty Ltd ACN 633 956 073 which holds the assets under a discretionary trust for certain beneficiaries including potentially ​some corporate authorised representatives of Count Financial Ltd. Count and Count Wealth Accountants® are trading names of Count. Count Financial Advisers are ​authorised representatives of Count. Information in this document is basedon current regulatory requirements and laws, as at 1 September2024, which may be ​subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its relatedentities, agents and employees for any ​loss arising from reliance on this document.Count is registered with the Tax Practitioners Board as a Registered Tax (Financial) Adviser. Howeveryour authorised ​representative may not be a Registered Tax Agent, consequently tax considerations are general in nature and do not include an assessment of your overalltax ​position. You should seek tax advice from a Registered Tax Agent. Should you wish to opt out of receiving direct marketing material from your adviser, please notify ​your adviser by email, phone or in writing.