On the Coast – Over 55 Issue 30 I July/August 2019 | Page 11
MORGANS FINANCIAL LIMITED
The reality of Retirement: three phases
Did you know there are three distinct
phases in retirement? Income needs vary
as we age, rather than remain static, so
advice is critical.
Planning for your retirement can be
exciting. To maximise your independence
and minimise frailty risk, consider
your needs across the three phases of
retirement.
PHASE 1 is the initial period with ‘active’
years to focus on travel, spending time
with family and friends and basically
loving life. Health and wellbeing during
this time are good, and the income needs
in this phase of retirement may be higher
due to the cost of leisure and lifestyle.
PHASE 2 includes the ‘quiet’ years
when health starts to decline. You may
still maintain living independence, but
spending may start to decline as your
lifestyle spending starts to reduce.
PHASE 3 is the ‘frailty’ years – when you
start to experience either a physical or
cognitive decline that means you need
help with daily living activities.
Statistics from the Australian Institute
of Health and Welfare show that this
third phase can, on average, account for
17%-25% of our retirement years. This is
a long period of time to ignore and not
have prepared for.
The traditional approach to retirement
planning assumed a constant indexed
income which did not allow for higher
care needs later in life.
The reality is spending patterns are
likely to vary over these three phases
and this requires consideration when
designing an investment strategy for
your retirement savings. If you consider
the cost of care in the third phase, the
pattern of income needs is more likely to
look like a smile than a straight line.
FRAILTY RISK – Access to government
subsides helps make care affordable. But
adequate savings to fund the increasing
costs of care opens up choices and allows
greater independence and control to
cover home adaptation, home care and
residential care costs.
Things to consider
How you expect to fund aged care
costs
What role your home can play
The impact of relying on family
and friends for support
Are you willing to ignore frailty
risk?
Ask us for help to discuss a
retirement strategy which will
provide you with the income you
need at all phases of retirement.
Sophie Doyle (AR#000470612) is an Aged Care Specialist at Morgans Financial Limited
(Morgans AFSL 235410/ABN49 010 669 726); with a passion for assisting people make
informed financial decisions as they navigate their way through the aged care system.
Disclaimer: The information in this article is general advice only and does not take into
account your particular circumstances. We recommend specific tax or legal advice be
sought before any action is taken and refer to the relevant Product Disclosure Statement
before investing in any product. Rates current to 18 October 2018.
Aged care doesn’t have
to be hard. Need help?
We can guide you through the
financial steps. Ask today!
Sophie Doyle
AR 000470612
Aged Care Specialist / Associate Adviser
02 4325 0884 | morgans.com.au/gosford/aged-care
Morgans Financial Limited ABN 49 010 669 726 AFSL 235410 A Participant of ASX Group
A Professional Partner of the Financial Planning Association of Australia.
JULY/AUGUST – ISSUE 30
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