Categories

Accountant Aged Care Allied Health Andrew Bragg Annuity Apps Asic Asset Finance Asset Planning Asset Protection Asset Protection Strategies Assets Assets and Risks Ato Auction Audit Insurance Australian House Market Report Baby Bonus Bas Binding Death Benefit Nominations Binding Financial Agreement Binding Financial Agreements Body Corporate Bonds Borrowing Brexit Budget Budgeting Business Business Registrations Business Support Business Tax Deduction Business Value Capital Gains Tax Capital Gains Tax: Will Capital Protection Catherine Frost Cgt Checklists Commercial Loans Commercial Property Company Tax Concessional Superannuation Contribution Corporate Trustee Cryptocurrency Darren Foster Debt Debtors Deceased Estate Depreciation Dereen Wallace Director Director Id Divorce Economic Update Economy Emily Kermac Employees Estate Planning Executor Fbt Federal Budget Federal Election Finance Finances Financial Advice Financial Plan Financial Update Franking Credits Government Grants Gst Holiday House Home Office Hybrid Unit Trust Individual Ownership Insolvency Insurance Insurance In Super Interest Rates Investment Investment Loan Investment Loans Investment Property Investments Janet Kohan Jobkeeper Jobmaker Joint Ownership Ken Burk Land Tax Lending Life Insurance Linda Hamilton Loan Repayments Loans Lvr Margin Loans Margin Scheme Market Update Medical Expenses Mortgage Mortgage Broker Mortgage Broking Mygov Negative Gearing Offset Account Overseas Gifts Parental Leave Paris Financial Pat Mannix Payg Payg Variation Pension Practice Valuations Private Wealth Property Property Development Rebecca Mackie Record Keeping Redraw Facility Refinance Renovating Research & Development Retirement Retirement Planning Retirement Savings Salary Sacrifice Scams Self Managed Superannuation Self Managed Superannuation Fund Seminar Shares Small Business Smsf Smsf Borrowing Smsf Property Smsf Self Managed Superannuation Fund Steve Golding Steve Wildes Strategic Business Structuring Structures Subdividing Property Succession Plan Superannuation Superannuation Fund Tanya Hofbauer Tax Tax Benefits for Super Tax Concession Tax Deduction Tax Investment Property Tax Losses Tax Offset Tax Planning Tax Savings Tax-Free Temporary Full Expensing Tenants in Common Tessa Testamentary Trusts Tfe Training Transition to Retirement Trust Trusts Ttr Will Working from Home
Home » E-News » Latest News

Ways to manage your debt leading up to and during your retirement

Ways to manage your debt leading up to and during your retirement

While most Aussies had planned to retire at age 65, the reality is that around a quarter of us are expecting to delay our retirement.

The most recent Retirement and Retirement Intentions survey data released by ABS in 2015 found the number of people aged 45 and over who intend to retire later than age 65 is 23%, compared to only 8% of people surveyed in 2004-051.

The main reason people say they’re going to delay their retirement is a lack of financial security (40% for men and 25% for women). And more than half of those surveyed (53%) stated they expect to rely solely on their super, annuity or allocated pension as their main source of income in retirement2.

And given Australians have one of the highest rates of debt in the world3, this trend looks set to continue.

So what can you do to increase your cash flow and reduce your debt to help you live the lifestyle you want in retirement?

Preparing for retirement

If you still have a few years to go before you retire, here are some things you could consider:

  • Work a bit longer than you had planned. This will help you boost your savings and your super balance, so that you will have a more comfortable lifestyle in retirement.
  • Work towards becoming debt-free. Take control of your debt by paying off your credit card, refinancing and/or consolidating your debt (such as, into your home loan) or use bill smoothing to reduce interest, fees and charges.
  • Get serious about having a budget. Use our budget calculator to work out how much you really need to set aside for everyday living, bills and savings and keep them in separate accounts or ‘buckets’.
  • Don’t keep all your investment eggs in one basket. Consider choosing a diversified mix of investments within your super which could potentially generate more income.
  • Refinance or downsize your home. Find out what you need to know about selling your family home or accessing the equity in your home to help fund your retirement.

Living in retirement

If you’ve already retired, here are some ways to make your money last longer:

  • Take control of your finances. There are several strategies that could help boost your cash flow. Read about how to manage your money in retirement.
  • Use your savings to invest. Another way to boost income is to invest yours savings in shares, property, cash, fixed income or managed funds. Be aware though that any earnings will be subject to tax. Find out more about investing and how to make your money work for your future.
  • Know your entitlements. Find out what benefits you are entitled to in retirement. For example, your Pensioner Concession Card provides bulk billing for medical appointments, refunds for medical expenses, reduced rates on water and energy bills, car registration and public transport.

Next steps

Finding ways to reduce debt and increase your cash flow in retirement can be a complex and time-consuming task. If you’d like help with working out what’s right for you, contact the Paris Financial office on 03 8393 1000.

Darren Foster, Senior Financial Planner, Paris Financial

Follow me on Twitter @darren_df

 Source: AMP

1,2 6238.0 – Retirement and Retirement Intentions, Australia, July 2014 to June 2015: http://www.abs.gov.au/ausstats/abs%40.nsf/mediareleasesbyCatalogue/C01D5E3F3A934E99CA257F80001564DE?OpenDocument

3 AMP.NATSEM Income and Wealth Report, Buy now, pay later: Household debt in Australia, December 2015, p6.


Tags: Darren Foster | Financial Plan | Retirement | Retirement Planning | Retirement Savings |