How to keep your finances on track once you leave the workforce

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9 money mistakes people make in retirement

How to keep your finances on track once you leave the workforce

 

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When you’ve worked hard all your life to build up your nest egg, the last thing you want to do is fritter it away too quickly. In this article, we look at the common money mistakes people in retirement make, and how you can do your best to avoid them.

1. Not taking control of your super

It’s important to know what your options are for getting access to your superannuation when you retire. You can take it as a lump sum, an allocated pension or an annuity. To find out more about accessing your super speak to us to determine what’s right for you.

2. Not knowing your entitlements

Don’t make the mistake of not knowing what payments you’re eligible for in retirement. This may include government benefits, such as the Age Pension, carer’s allowance or disability support through to concessions on health and travel.

3. Spending like you’re still working

Dipping into your savings or your super money regularly will soon whittle away your hard-earned savings. Find out about ways to manage your money in retirement to help you free up your cash flow and keep an eye on your expenses.

4. Not managing your investments

Just because you’re retired, doesn’t mean you should be complacent about your investments. It’s important to consider your personal situation. If you have investments feel free to contact us.

5. Not managing your debts

Consider all your options for reducing your debts, as you may not have enough funds to last you through your retirement. Be careful about paying too much interest on your debts. If you need to pay off your home loan, make sure you’re aware of how selling your home or investment property affects your entitlements.

6. Spending your retirement savings on the kids

If you plan to give money to your children (or grandchildren) to to help them financially, be aware of how gifting or going guarantor might affect your tax and your lifestyle in retirement.

7. Letting your insurance lapse

It’s tempting to reduce your outgoings in retirement by cutting back on things like insurance. But before you do, consider whether you could cut back in other ways first.

8. Taking expensive holidays

Make sure your choice of destination fits within your overall budget, bearing in mind you need your money to last the distance in retirement.

9. Buying a new vehicle

When you retire it’s very tempting to use your super to buy a new car to last you through your retirement. If you’re serious about watching where your money goes, you might want to think about making your current vehicle last a bit longer, but you’ll need to weigh up the maintenance costs versus buying another one.

Your retirement is in your hands, so try to make the most of the money you’ve got and invest wisely to make it last. But don’t forget to take care of your health to give yourself the best chance of going the distance in retirement.

KTA Pty Ltd (ABN 19 008 141 080) trading as KTA Financial Services is an authorised representative of Charter Financial Planning Ltd ABN 35 002 976 294, Australian Financial Services Licence and Australian Credit Licence No. 234665. Registered address: Level 29, 50 Bridge Street, GPO Box 4134 Sydney NSW 2000.

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General Advice Warning: The information contained on this website is general in nature and provided in good faith. While the contents are obtained from various sources that are deemed reliable, it is not guaranteed as accurate or complete and should not be relied upon as such. It is recommended that you seek independent, professional advice before implementing any of the suggestions to ensure that it is appropriate to your needs and circumstances.