Family & Finance: Spend your retirement wisely

When I worked as a financial analyst at Macquarie Bank in the late 90’s, there was a particularly gruelling professional qualification that we were encouraged to go for, called the CFA, that many attempted, and few succeeded. I read this week that 140,000 people have sat the exam this year, and only 35% have passed. And the number of people with the qualification has increased seven-fold in 20 years. Why tell you this? Well, consider all the financial professional horsepower looking for opportunities in investment markets, all day, every day. Are you the sort of retiree who wants to compete with that? Is this the best way to spend your retirement?  

If you think you should do something with your savings, besides leaving money to languish in the bank, there’s a range of very effective (and relatively cheap) ways to get your money working harder. Huge sums of money are managed by teams of highly qualified people. This is something you can take advantage of. Spending hours looking over investment data yourself is also likely not a great use of your time, and it could even work against you making a return on your savings. If doing this makes you happy, go for it, otherwise, give the money over to experts.

While it is easier than ever to have your money invested with expertise and at low cost, you still have plenty of work to do. A networked and numerate investment genius doesn’t know how much you need to fund your retirement, nor will they help you establish a plan to have a good time and worry less. They won’t be tracking opportunities to place more money into super if you sell your house, keeping you in the loop of upcoming changes to make contributions to super as you age, or looking for more cost-effective ways of managing your savings. Neither can they work out your eligibility for the age pension, how this may change over time as your situation changes. An investment genius probably doesn’t have an eye on aged care options near you or your children and how you might keep this contingency in your plans. 

Nearly half of the Northern Beaches population over 66 gets a full or part age pension (that’s close to 19,000 people), and about 8,500 Northern Beaches residents have a Commonwealth Seniors Health Card. That is a lot of people interacting with the system of government. And if you are taking full advantage of all entitlement options available, an age pensioner has access to at least another 25 rebates, subsidies, offsets, schemes, or outright freebies. So, it clearly makes great financial sense to be fully up to speed with all these savings possibilities. You won’t find this in the finance section of the newspaper.

Keeping this organised, helping you get all you are entitled to, and letting you know what rules apply to you (instead of just pointing you to the rulebook) – is the financial advisor analysis that is the most helpful and instantly applicable.