You’re living the high life. No kids, no work, lots of money! How could things get any better?
You’ve been in retirement for a little while now – and it’s not all it’s cracked up to be. There’s not much going on. If you don’t go on holiday once a year, you’ll go mad, but it’s a balancing act between having money for a trip and making sure you don’t use too much.
Making sure your money lasts is a major concern throughout your 70s, along with your health. You’ll find it deteriorates more now. Regular doctor’s visits are no longer a choice, they have become a necessity.
Towards the end of your 70s your social calendar is starting to get booked up. Sadly, it’s no longer parties and pub crawls, but funerals and wakes. Keep your black dress and suit handy! This is also the time where you start to see grandkids – or you may even be lucky enough to be getting yourself some great-grandkids, which makes you sound so old so you’d prefer to be called GG or “Greatpa”. Great-grandkids are particularly good, as no one actually expects you to actively look after these little balls of energy. But they are cute and fun when they come for a visit with their parents. You get to spoil them without consequence.
It can also be a lonely time: maybe you don’t have a partner, your kids live far away, even friends may not visit as often. It would be nice if your kids visited more often.
This is a time where life is pretty good, but why shouldn’t it be? You’ve been busy all your life. Kids, property, mortgage, school – you’ve worked hard, why not enjoy it? Put your feet up, relax. This is your time!
Waiting for family to visit can be lonely. Find things you like to do and keep your mind active. Join a book club, play golf, volunteer.
- YOU’RE ONLY AS OLD AS YOU THINK YOU ARE
Don’t be dictated by your age. Just because you’re 70 doesn’t mean you have to act it.
- MAKE SURE YOUR ESTATE IS IN ORDER
It’s best to ensure that you have a watertight will; you don’t want a family break-up to be your legacy.
- MAKE SURE YOU KNOW HOW LONG YOUR MONEY IS EXPECTED TO LAST AND KEEP TRACK
Now more than ever you need to know, as it’s all you have.
- APPLY FOR AND USE PENSION CARDS
You may qualify for an age pension; if not, many states and territories have senior cards that provide good discounts.
- REVIEW CENTRELINK ENTITLEMENTS REGULARLY
You may become entitled to extra benefits that will help to make for a more comfortable retirement.
Terry Ruttledge is a 76-year-old retired bank manager who firmly believes in saving for a rainy day.
He worked for National Australia Bank for 43 years and, in the final 14 years, he salary-sacrificed up to 40 per cent of his salary into super. He was then earning about $120,000 a year – a reasonable sum then.
When he retired 18 years ago, he had accumulated $1.1 million in super – an amount that remains largely intact, despite having received more than $700,000 from it during his retirement. He also has a waterfront investment unit in Manly that he bought off the plan for $500,000 in 1991 – 92, which has benefited from the boom in Sydney housing prices.
“It has been a nice little earner,” Terry said. He also has a share portfolio of blue-chip companies that provide him with additional tax-effective income and owns his five-bedroom house in Port Macquarie.
As a former banker he could have managed his own financial affairs on retirement, but in 2004 he chose Glen Killen of Strategy Financial Consulting in Port Macquarie to be his financial planner.
“Unlike a car mechanic who fixes his own car or a builder who builds his own house, I knew I wanted someone else to do this job – someone who is a specialist and does it for a living,” he said.
Mr. Rutledge is in a very comfortable space with liquid assets that will see him and his wife, Marlene, into their dotage – and leave something for their four children and eight grandchildren.
His financial planner manages his share portfolio and widened the share mix to a spread of blue-chips, mainly from top ASX list.
“The beauty of Glen Killen is that he gets to know his clients personally and knows what they want to achieve. We regard him as a personal friend. Financial advisers who charge fees of up to $25,000 a year should be locked out of the industry. My wife and I had enough entertainment when I worked at the bank and we have done a bit of overseas travel. Last year out of the blue I had a triple bypass – I was fortunate I did not suffer a heart attack.”
Today, Mr. Rutledge goes for an hour’s daily walk by the beach. He has taken up photography and goes out with his mates into the bush for a spot of fishing.
He has three cars, one for his wife, a four-wheel drive Suzuki and a seven-seater to accommodate the grandchildren.
“It’s never too early to plan and start saving for your retirement,” he said.
OUR PANEL’S ADVICE
The fun will continue into your 70s for those who have had a financial plan in place for the past four decades. One of the many benefits is having a strong grip on what you can expect in future – greater certainty. Our health has a lot of impact on the personal and financial issues, as does leaving a legacy to the next generation for many of our clients.
The retirement years – a time to enjoy the results of all your hard work. Health will be paramount, so make sure you have top health cover. Take time to understand if and how you can access Centrelink benefits. It’s a good time to appoint an attorney to manage your finances if you can’t do them yourself.
The important thing is to enjoy yourself whilst still planning for the future, as your needs will change in time and you want the luxury of making your own decisions. Ensure your retirement plan will last. Review possible government age pensions and other benefits. Start an aged care plan so you’re not forced into it down the track.
THE REALLY SIMPLY GUIDE TO MONEY | OCTOBER 2015
The information provided in this page is general in nature and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information with regard to your objectives, financial situation and needs. You should seek independent advice from your financial adviser before making any decisions.
AUSTRALIAN MORTGAGE AND FINANCIAL ADVISERS (AMAFA)
Phone: 07 3378 2056
Fax: 07 3378 2069