practical living
Ageing successfully
How to fund your new life after retirement.
By Martin Warner
S
eventy-six per cent of Australian seniors over 60 would
prefer to age in the comfort of their home. Eighty-three
per cent also believe home ownership is essential to
maintaining independence and financial freedom during the later
stages of life. Planning a future of financial stability allows seniors
to reduce stress as they enjoy the freedom of living as they please
while still enjoying life’s luxuries.
At Home Instead Senior Care, we are a national provider of
high quality in-home care for older Australians and have created a
guide on how to plan for successful ageing.
The guide includes tools to plan for wellbeing and financial
security in collaboration with Perpetual Australia. This guide
has been curated to assist in demystifying the aged care maze,
providing seniors with a plan on how to age successfully.
Here are our top five tips for funding your new life:
1. Account-based pensions
Once eligible, you can transfer all or part of your super to an
account-based pension and receive regular income payments.
As this is within the superannuation system, income and
payments are generally tax free. However, it’s important to
understand that your income is not guaranteed – if your
investments don’t perform, you may receive less than you
planned for.
2. Annuities
You can buy an annuity which then gives you a set income
for a defined period, or for the rest of your life, depending on
the product you choose. You receive a guaranteed payment
regardless of market performance or interest rate changes. On
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the downside, you don’t have the flexibility to withdraw more if
you need extra cash.
3. Pension and other government assistance
If you haven’t already done so, you should check
whether you are eligible for a full or part pension from the
Australian government – this is looked after by Services
Australia (Centrelink) and the Department of Veterans’ Affairs
(DVA). There are also other concessions available which you
may be eligible for. For example, most people over 60 who
aren’t working full time will be eligible for the Seniors Card,
which offers travel concessions as well as discounts for a range
of other goods and services.
4. Discretionary income
Money for fun and to cover the unexpected. When you have
looked after life’s essential expenses with a retirement (or semi-
retirement) income stream, what about extra money to treat
yourself to the finer things in life? The secret to discretionary
income is quick access to cash. The financial term for this is
liquidity – cash is the most liquid asset, while investments like
real estate are considered illiquid, as it is very hard to sell just
one room of a house.
5. Term deposit
With a term deposit, your money is invested for a fixed period
and you receive an agreed rate of interest for the term of
your investment. It’s a popular way to earn money for life’s
pleasures – and emergencies – because the cash you receive
is easy to access, it’s liquid. Another benefit of a term deposit is
the safety, because your original investment is returned at the
end of the term. ■
Martin Warner is CEO of Home Instead Senior Care.