With many years of working a professional career and investing a portion of your income behind you, it’s time to finally realise these financial gains.
You may already be familiar with the ASX share-selling process, but for those needing a refresher, this guide will walk you through the steps to properly sell your stocks to get the highest gains.
The process of selling shares as an incoming retiree, in particular, has its fair share of nuances and complexities that you should consider.
For one, you’ll no longer have an active income to put into your accounts constantly, but instead rely on savings and dividends to fund your new lifestyle.
It’s one thing to liquidate your shares, but it’s a whole different ball game to sell it most optimally to fund your lifestyle and retirement aspirations.
So buckle up, this article will give you some insights on how to sell shares of stocks found in the ASX in preparation for your upcoming retirement.
Let’s jump right into it.
3 Ways to Sell ASX Shares as A Retiree
There are multiple ways you can liquidate your stock portfolio and reap gains.
The method you’ll end up choosing will influence the final amount you’ll reap, the ease of the trade, tax filing management, and other factors. Let’s look into these various ways you can sell shares in more detail.
1. Contact a Full-Service Stockbroker
Don’t want to sell shares without guided supervision?
If you’ve relied on a stockbroker to manage your investments over the years, then it may be ideal to stick with them in this new phase of your life as well. And if you don’t have a trusted broker yet, you can always hit one up before selling your ASX shares.
These financial services hold a high level of expertise in the economy and market movements. They also have their finger on the pulse of developments across multiple industries in the Australian landscape.
Moreover, they are also very familiar with the execution of buy and sell orders for all sorts of asset classes within the ASX, from stocks and mutual funds to equities held in a superannuation fund.
If you’re overwhelmed with the whole process of trading stocks and shares, consulting with these exports is a great way to ensure that your stocks are properly handled in accordance with your goals.
They’ll take a small cut from your profits in exchange for their consultations, but this will usually end up as a negligible amount if you’re entrusting a large capital to them.
Many full-service brokers charge using a percentage fee-based structure, typically valued at about 0.5 to 2% of the trade value.
Just be sure to communicate with them thoroughly on the matter. This is to ensure that you both are on the same page regarding your investment decisions and make the most out of your partnership.
By relying on a full-service broker, you’ll be able to passively invest and reap the profits of the investment with an element of human touch. This can give you peace of mind knowing that your money is handled by a licensed professional.
2. Use Online Brokerage Platforms
Prefer to handle the sale of shares yourself? You can independently sell your ASX shares if you’ve signed up for online brokerage platforms that cater to the Australian market.
There are many such platforms that allow you to manage trades independently, like CommSec and Halo Technologies. Besides offering investors the chance to buy and sell shares, they also provide real-time access to market data and intuitive trading tools to facilitate a full-access trading experience.
While selling shares on the Australian market with ShareSalesDirect is an effective way of retaining control over your portfolio, it’s essential for you to hold at least a moderate degree of awareness of market conditions.
You should set up stop-losses to prevent your investment from falling far beyond what’s comfortable, as well as make an exit strategy to ensure you actually get to reap your profits.
Regardless, using an online brokerage platform can be a great way to sell your ASX shares. You simply have to sign up for an account, sell a stock share when the market is open, and withdraw the amount to your bank account of choice.
If you value autonomy and independent trading, as well as a bigger portion of the share value returning to you, then this mode is the way to go to meet your retirement needs.
3. Sell on Super Fund Trading Platforms
If you’re based in Australia and are employed by an Aussie company, then you’re bound to have some funds in your super that have been growing throughout the years.
Depending on how you’ve chosen to manage your super fund, you can also use your retirement as an opportunity to realise the gains from this decades-long savings activity.
For self-managed super funds, you can sell ASX shares independently using trading platforms that cater to super funds. These tools allow you to trade your shares directly, which you can then use to reinvest in other asset classes or pay off immediate expenses for post-retirement activities and costs.
That said, keeping some shares is also an optimal choice as it can reap a nice dividend yield and give you access to tax-free earnings. Most retirees adopt a hybrid strategy and sell a small amount and keep just enough to live off of dividends.
Your circumstances will dictate the best course of action, so be sure to consider all options (with a financial advisor, preferably) to know the best breakdown for your needs.
4 Considerations When Selling Shares as a Retiree
The importance of market timing has never been more magnified than when you’re approaching your retirement years. Choosing the moment to pull out of an investment will underscore your financial security for years to come.
As such, be considerate about the following factors before selling your ASX shares.
Your Financial Situation
The first thing to consider before selling your shares is whether it’ll be good for your overall financial well-being.
Is your stock portfolio the only passive investment income you’re accumulating? Or do you have other means of growing your cash flow, like rental income or pensions?
Your next course of action will depend on your answer. Selling shares is a great way to immediately gain funds, but it also removes or reduces the opportunity for you to grow your dividends or stock value.
Make the compromise following your financial vision post-retirement.
Tax Implications
Another key consideration to make before selling your shares on the ASX is the tax implications of the move. Shares sold on a profit will incur a respective capital gains tax charge.
This amount differs based on the percentage of profit and type of investment you’ve made, but generally, holding a share for more than a year reduces how much you’ll end up paying. So ideally, accumulating and holding a stock for years will lead to better-realised gains.
Shares sold within a super or in a pension are also taxed at a lower amount. You can also reduce your tax liability by offsetting gains with capital losses if some of your stocks are unprofitable.
That said, be sure to talk with a tax consultant or an accountant to ensure that you’re optimising your strategy properly.
Lifestyle
Your lifestyle goals also play a big role in influencing the best time to sell shares. Do you intend to live your retirement years lavishly with a sizable amount of savings? Or would you prefer to have just enough to scrape by and live a quiet and comfortable life?
Determine your lifestyle aspirations and figure out a good numerical goal to strive for to achieve it. Selling your shares can help you liquidate and enjoy your life at the present, but it also comes with the drawback of losing out on value over time due to inflation.
Given this, it’s essential to take some time to truly reflect on your individual circumstances before selling shares. This is especially true if you have dependents who rely on you to finance their daily living.
Market Conditions
Finally, assess the present and foreseeable state of the market before deciding the right time to sell your stocks. Selling during a market downturn can make you lose out on potential money, but it may help you get more favourable tax benefits.
Conversely, selling in a strong market can help you maximise your profits. As such, it’s important to consider selling your ASX stocks while keeping in mind the current market conditions.
While no one can 100% predict market movements, there are ways to strategically up your chances of reaping a profit through strategic fundamental and technical analyses.
We hope this article will help you in your wealth accumulation journey towards retirement. Happy investing!
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