The Top 3 questions over-50s ask about money
Source: https://majorstreet.com.au/products/live-the-life-you-want-with-the-money-you-have-vince-scully
What are the three questions the over-50s tend to ask one of Australia's most experienced financial planners about money? They’re simple enough, but if only the answers were so easy…
I presumed the three areas would be retirement, superannuation and the vexed area of wills and estate planning. I was only one-third right. What do you think they'd be?
Vince Scully is a qualified accountant, financial planner and mortgage broker with more than 35 years of experience. We've worked together trying to bring lower-cost advice to people who need it.
He's the co-founder and CEO of LifeSherpa, which says it's Australia's most affordable advice platform, whatever you own, earn or owe.
His big three questions the over-50s need and want answers to?
- When can I retire?
- How can I help my kids into a home? and
- How do I help my parents with aged care?
Are they your significant three concerns regarding you, your family and your money? If not, what are they? See Vince's answers below.
1. When can I retire?
Vince says: Work out how much is enough. Enough is not a number. It's about enough money to sleep at night, enough purpose to get up in the morning, and enough joy to sustain you through the day.
Ensure you are retiring to something rather than from something, i.e. why are you retiring, and what will you do instead?
Decide when and even if you will want to or need to downsize. If you do, make sure you do it early - many wait till their 80s and end up not being able or willing to do so.
Learn to shift your mindset from "spending bad; saving good", which you required to accumulate savings, to "spending good (just not too much)".
Accept that you will spend not just the fruit of the tree (dividends, interest, income) but also some of the tree (capital). Too many retirees are reluctant to spend their wealth and die with more than when they retired.
Think about the timing and implications of if you as a couple have material age differences. If you think you'll get at least a part-age pension, consider shifting super to your younger spouse's account.
How long you'll live is a bigger risk than what the markets will do this year. It's the so-called ‘longevity risk’. Only an actuary could dream that up. I see this as a ‘longevity opportunity’, the possibility of a long, fulfilled and purposeful life where you do not unduly worry about money.
2. How do I help my kids into a home?
Vince says: Fit your own mask first before attending to others, i.e. ensure you have everything in place. If lending money or going guarantor, you need to think about how to do it without ruining your retirement. Read more here about the rise of the bank of mum and dad.
3. How do I help my parents with aged care?
Vince says: It's a big question with a short answer. Aged care is highly complicated. There are specialist financial advisers and others who can help; given the sums involved, the good ones are worth it. See my answer on assisting kids (above), and don't jeopardise your well-being unnecessarily or unwisely. See more from the government here.
Disclosure: I contribute to LifeSherpa’s mission to make advice more accessible and affordable.
Any information contained in this communication is general advice, it does not take into account your individual circumstances, objectives, financial situation or needs.
