PK and I have just spent the last three weeks on the road, travelling from Perth (in the west) and across to Townsville (in the north); visiting all the capital cities in between and talking to a large number of Advisers and Accountants along the way.
Our discussions focused on the complexities of the legislation for superannuation, age pension, and aged care – without taking into account the numerous changes foreshadowed in the new year (especially in the area of superannuation).
Planning for retirement is not easy, and surviving the changing legislative landscape during the twenty-plus years most of us will live in retirement can, in certain circumstances, be even harder.
So it was a little bit of a surprise when a number of the Advisers who PK and I did speak to during this time, raised the issue of some client’s unwillingness to pay for advice regarding the complexities that they will certainly face in their retirement period.
I firmly believe that unless you have a very good knowledge of superannuation, age pension and aged care, a ‘DIY’ attitude in retirement in relation to these issues could be an expensive mistake.
Let’s think about it for a second.
If I need to change a light bulb that has blown, or I have a leaky tap, I do feel reasonably confident that I am able to complete both tasks without electrocuting myself or flooding the house. However, if the hot water system packs it in, I do know for a fact that regardless of the cost this is well and truly outside my field of capabilities – and if I were to tackle the problem I am sure it would cost a lot more than what I would pay the expert.
PK’s blog from last week is a classic example of why, if your financial situation is a little more complicated than just: “I own my home, I have a couple of term deposits, I have very little superannuation and I am not receiving any income from a trust”, then completing an application for an age pension can be very stressful and frustrating and – if you get it wrong – your entitlement most certainly would be affected.
Next year (if the legislation is passed by parliament) the superannuation changes which will take effect will be extremely complex. Now they may not affect everyone, but they will certainly have an effect of a number of pre and post-retirees.
If you do doubt my advice, and would like to see for yourself, read the explanatory memorandums associated will Tranche 1, 2, and 3 of the proposed changes.
And then later in our retirement years we face the maze which is aged care: basic daily fees, refundable accommodation deposits, means tested care fees, and ‘extra special’ daily fees.
Your retirement is meant to be enjoyed, not limited, by paper work, and trying to understand the changing legislative environment. This stress should be outsourced to an expert who needs to, and should be, paid to help you.
Yes – you should negotiate and compare fees and costs, but do not expect to receive quality advice and direction for nothing – invest in your future today.