Guest speaker Jai Thwaites with City of Melville Mayor Katy Mair
Jai is a licensed financial planner with Provident Financial Services and gave us the rundown on how to be smart with our money when we reach that “certain age”.
The first key aspect for retirement is planning and deciding what we’d like to achieve in our twilight years and the savings required to finance those goals.
We may like to travel, or spend time with the grandkids, volunteer or even sleep late every morning after a lifetime of waking up early to a noisy alarm.
How do we estimate how much money we will need to fund our desired lifestyle? Do we know which income source will be relevant to us in our retirement? It could be the age pension, or an annuity, dividends from shares or investment in property.
You must decide which will be the revenue stream to best take advantage of your personal financial situation, minimise tax outcomes and avoid unnecessary complexity.
Jai used the scenario of an investment of $100,000 over 30 years with a 6 per cent annual return which would yield $574,00 and at 8 per cent annual return a value of $1,006,000; a difference of $432,000 more with 2 per cent higher performance.
Your superannuation fund should be reviewed – have you been given the right advice and are you satisfied with your investment yields? The fees you pay can mean a substantial loss or gain over the years.
He explained the rules around the taxable and tax-free components of the funds and ways to work around paying tax, which works out at 17 per cent when children inherit. Maximising superannuation is smart because no other form of investing your money can match it.
Jai also outlined the age pension eligibility criteria and the gifting rules, which were fully detailed in the excellent information sheets he provided.
As with all things, there are common mistakes you can make managing your money. One way to avoid these is by consulting the right financial planner, who should be transparent about their costs and focuses on your objective and needs.