Financial matters for the over 60s

9 min read

Considering retirement and starting to plan the rest of your life, there are some important decisions you need to make.

When you see a financial adviser, you might be surprised to find they’re not always financial.  BT financial adviser Daniella Elchaar has first-hand experience with planning for retirement with clients and her own family and found the questions she needs to ask in preparation for retirement remain the same.

1. If you stop working, what are you going to do?

This is one of the most important questions that needs to be answered before you can progress with any other plans. People might want to retire from their full-time work, but a lot of people don’t see themselves stopping work altogether when they ‘retire’. It’s important to understand the type of life you envisage because all your plans are dependent on this. If you are going to keep working, you need to structure your finances to make the most of that. If you want to travel overseas regularly, your financial position will need to reflect that. Sometimes, when someone hasn’t really thought about their retirement they might retire prematurely and re-enter the workforce - some do it more than once. This can have a considerable effect on finances.

2. How much money do you need to live on?

What are your basic expenses (you can do this per week, per month, or on an annual basis) – how much do you spend on utilities (water, electricity, gas, phone, broadband, rates, transport etc.), then add how much do you need for lifestyle (dinners, birthdays, gifts, hobbies, entertainment) and finally how much do you need for luxuries (holidays, new cars, furniture). Once you know the amount you need to live on, figure how you can achieve that sum – or revise either your lifestyle, your retirement date or a bit of both.

You should also look at your relationship – are you calculating your assets separately or together and does that make sense? For example, if you are in a de facto relationship – would you not both be responsible for some of the living expenses?  You also need to work out if you are going to retire and if you are both going to be retired at the same time and if that would impact your funds or expenses.

3. What about the house?

While you’re making the big decisions about your future – one of them should include your home. Are you going to stay in the home you have been living in or is downsizing or moving elsewhere an option? Your home can be a profitable investment and you need to factor upkeep and your lifestyle needs in whether you stay or sell. For some, the upkeep could be expensive so downsizing might lessen the burden or offer more money to live on. It’s often a good idea to look at this while you are able to access different options such as putting extra money into super. People are often emotionally attached to their home but should work out why they are keeping it; if keeping it for the children – make sure they have the same feelings about it – or alternatively, if it’s about a certain lifestyle, will the home continue to offer that lifestyle in the future.

4. Have you reviewed your current situation?

Make sure you’ve taken advantage of the rules of adding money into super when you can. Further rules apply from age 65 onwards. If you are carrying assets outside super into retirement, you may find you are liable for higher tax rates.

Also, check if you are paying insurance premiums on policies that may no longer be relevant for you. Talk to your adviser to make sure this is tailored to your needs.

5. Is your estate in order?

Finally, while you are putting everything in order, it is a good time to make sure that your estate is as you intend. Make sure that your will is in order so that your estate will be passed on according to your wishes. Have there been any marriages, divorces, births or deaths that will affect the distribution of your will? Do you have the right power of attorney and enduring guardianship in place should anything happen to your health or mental capacity? Are your executors still right for you? You should review these as your circumstances change.

Need help defining your future plans? Talk to your financial adviser or contact BT on 132 135. 

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This information has been prepared by Westpac Banking Corporation ABN 33 007 457 141 AFSL & ACL 233714 (Westpac) and is current as at 9 October 2017. 

The views and opinions expressed in this article are those of the individual contributor(s) and do not necessarily reflect the official policy or position of BT Advice and its related entities on the matter discussed.

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