There’s a lot of focus these days on how to live a longer and healthier life, which is a great thing. Just make sure you also keep an eye on managing your money in retirement so it stays as fit and fabulous as you are, writes Miles Larbey, Senior Executive Leader, ASIC’s Financial Literacy team.
Being good with money is an essential everyday skill throughout your life. Being financially literate means being in control of your money day-to-day, able to manage financial risks and avoid financial pitfalls.
Improving your knowledge and skill with money will benefit you whatever your age, income or background. It can help you to reduce money stress and make informed choices, now and in the future.
So where do you start? Take charge of your finances by doing a simple money health check. Here are some key areas to look at, plus a list of useful resources to help you keep your finances in good shape.
Financial Health Checklist
DO YOU KNOW WHERE YOUR MONEY GOES MONTH-TO-MONTH?
To make your income last as long as possible, it’s a good idea to do a budget to get a clear picture of the money going in and out of your household. This enables you to keep track of expenses, identify where you could make savings and direct your money to where it matters most.
ARE YOU GETTING ALL YOUR ENTITLEMENTS?
Check your eligibility for the Age Pension, making sure you understand how your assets and income impact on your benefits. Even if you don’t qualify for the Age Pension, you may be eligible for benefits such as the Commonwealth Seniors Health Card or a state/territory government Seniors Card.
ARE YOU PROTECTING YOUR ASSETS?
It’s wise to review your insurance every year to make sure you have the right amount of coverage. You may be able to get more cover for the same or a lower price if you shop around. Ensure you know how to make a claim and ask questions if you don’t understand how your policy works.
DO YOU UNDERSTAND YOUR INVESTMENTS?
Make sure you know what you’re investing in and are comfortable with the risks. Higher potential returns come with higher risks, so keep to a level that suits your risk tolerance. Spread your risk by choosing a mix of investments across different asset classes. If you need professional advice, ask questions and ensure the advice meets your needs and goals. Never agree to an investment product or strategy you’re not comfortable with or don’t understand.
“Watch out for investment offers that promise high, quick returns with ‘no risk’. If an offer sounds too good to be true, it probably is.“
DO YOU KNOW HOW TO AVOID SCAMS?
Scammers try many tricks to convince you to part with your money. Be wary of people who contact you pretending to be a bank, phone company or government agency. A real company will never ask you to “verify” your account or disclose your PIN. Watch out for investment offers that promise high, quick returns with “no risk”. If an offer sounds too good to be true, it probably is.
HAVE YOU CONSIDERED HEALTH AND AGED CARE NEEDS IN LATER LIFE?
According to ABS Life Tables (2010-12), a 55 year-old man can expect to live to around 83, and a woman to 86. Depending on your personal circumstances, you may live longer. Consider setting aside some money for health and aged care costs, should your situation change as you get older.
DO YOU HAVE A WILL AND ESTATE PLAN?
No-one wants to think about death in the prime of life, but it’s important to decide what will happen to your assets when you die. Prepare a will and update it whenever your circumstances change. Make sure the person you nominate to manage your estate can easily locate your financial information.
Tools to get your money sorted
ASIC’S MONEYSMART
ASIC’s MoneySmart website offers free and independent guidance to help you make the most of your money. Topics include managing money, insurance, retirement income, investing, financial advice, and avoiding scams. There is a budget planner, a money health check, free publications and online calculators to assist with financial decisions.
- Visit moneysmart.gov.au or call ASIC on 1300 300 360
FINANCIAL INFORMATION SERVICE
The Department of Human Services’ Financial Information Service (FIS) offers a variety of free money seminars. Or speak to a FIS officer by phone or in person to better understand your personal financial circumstances and options.
- Visit humanservices.gov.au/fis or call 132 300
DEPARTMENT OF SOCIAL SERVICES
The Department of Social Services (DSS) provides information for seniors including details on the Aged Pension, other benefits, allowances and concessions.
- Visit dss.gov.au or call 1300 653 227
DSS also runs My Aged Care, covering how to find an aged care service, eligibility and assessment, home care and residential care fee estimators.
- Visit myagedcare.gov.au or call 1800 200 422
FINANCIAL COUNSELLING
Financial counselling is a free service offered by community organisations, community legal centres and some government agencies. If you’re having money problems, a financial counsellor can assist you to get a clear picture of your situation, understand your options and work out a budget.
- Call the National Financial Counselling Hotline on 1800 007 007
About
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
The Australian Securities and Investments Commission (ASIC) is Australia’s corporate, markets and financial services regulator and an independent Commonwealth Government body. ASIC, under The Australian Securities and Investments Commission Act 2001 is required to:
- maintain, facilitate and improve the performance of the financial system and entities in it
- promote confident and informed participation by investors and consumers in the financial system
- administer the law effectively and with minimal procedural requirements
- enforce and give effect to the law
- receive, process and store, efficiently and quickly, information that is given to us
- make information about companies and other bodies available to the public as soon as practicable.
Visit ASIC at www.asic.gov.au
Add Comment