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The Top 5 Money Issues Facing Retirees

You’ve retired. Now what?

It’s likely that your retirement will be very different to that of your parents.

These days when you retire, it’s likely you’ll continue to do part time or volunteer work. And may even go back to university. To keep enjoying an active retirement it’s important to keep reviewing the plan you had before you stopped full time work.

When planning your retirement, you’ll need to keep making choices about your income and investments, government benefits, your super, tax and estate planning. A financial adviser can be a guide for your journey – and help you manage through retirement.

The top 5 money issues on minds of retirees:

#1 How Can I Make My Money Last Longer?

One way to extend the life of your money is obviously to spend less. But first you should understand how long your money is likely to last. You may find you don’t need to cut back.

Next, review your strategy at least annually with your financial adviser. Rules change, thresholds increase and you may become eligible for Centrelink benefits like a part Age Pension as your capital reduces. Also review your investments regularly. Many people are retired for over 20 years, meaning growth assets like shares and property can still be a viable part of their portfolio.

#2 How Can I Maximise My Income?

Maximising your income means making choices about issues like:

  • the balance between how much income you need, and how long your money will last;
  • the income stream that best suits you – whether it is an account based pension, term annuity, life annuity, collecting rent from an investment property or a combination of these;
  • the investment risk you wish to take – for example, whether or not you include investments like shares in your portfolio;
  • understanding what Centrelink benefits you may be entitled to

#3 Am I Missing Out On Government Benefits?

Retired people may be eligible for numerous benefits from a whole or part Age Pension to concessions on health care and services. These are available through the concession cards; Pensioner Concession Card, Commonwealth Seniors Health Card, Health Care Card and state-based Seniors Cards.

Some retirees who could be receiving the Age Pension miss out, simply because they do not structure their finances to fulfill the requirements of the assets and income tests.

It is also important to understand which concessions you may be eligible for and how the rules apply. As a rough guide, it is estimated that the Pensioner Concession Card alone can be worth $1,000 to $2,000 in benefits per annum.

#4 I want to help out my family – but don’t want to give them or me a big tax bill.

There are numerous ways to help your children and grandchildren financially, depending on your needs and theirs.

Some retirees, for example, set funds aside to help pay for their grandchildren’s secondary or higher education or other needs such as a housing deposit. Again, depending on your family there may be different ways of structuring these benefits and each has its pros and cons.

If you are considering ways to help your family through the direct transfer of assets to the next generation, it is important to be aware of “gifting” and other rules related to estate planning to ensure a tax-effective transfer, and that Centrelink benefits can be retained.

Estate planning is a complex area and specialist advice is important so you make informed decisions.

#5 How Can I Make Sure My Money Ends Up Where I Want It To When I’m Gone?

To make sure your money goes where you want it to, you need to think about estate planning.

Estate planning is more than just having an up to date Will, it also takes into account your superannuation, insurance polices and powers of attorney. The rules are complex and subject to change, and so are your own circumstances and wishes so you need to make sure that you regularly review these arrangements.

Our advisers help retirees make the most of their money and make good financial decisions every day. So, make sure you get the retirement life you want and talk with an adviser today.












Source: iPac

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