30 October 2012

5 financial tips for baby boomers reaching 65

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You are a Baby Boomer if you were born between 1946 and 1964.

Baby Boomer fact: You would need to combine the entire Australian population of Generation ‘X’ and ‘Y’ together to match the number of Baby Boomers in Australia (ABS 2006 Census data – Generation to Generation 2009).

The first of Australia’s five million plus Baby Boomers turned 65 in January 2011. But if you thought the Baby Boomers were just going to keel over and put their feet up – you’d be wrong. If the Government has their way, many of the Baby Boomers will still have to keep working well into their 70’s, particularly for the younger members. For many, they are just getting on with the next phase of their lives, continuing to work, plan for their future. Settling down to a menu of golf days, long lunches, snoozing in the afternoon, and holidays appeals for a short time but not for life – there’s still so much to do! A recent survey of retirement intentions by the Australian Bureau of Statistics found the average age of retirement for those who’d left work in the previous five years was 61.4.

To help baby boomers navigate this new era and the growing pains that come with it, here are five tips that I thought might be useful.

1. Re-evaluate Your Home – Telling yourself that stairs are a form of exercise doesn’t make walking them any easier. If you are downsizing to a smaller house or redoing your home, consider how flexible the space is and whether it can be adapted as you age.

Some building recommendations are to have the master bedroom and bath located on the ground floor. Other suggestions include lever styled door handles for easier use; an exterior that is low maintenance; a floor plan for the kitchen and dining room that is easily changeable.

For those who are renovating, maybe it won’t cost more if you make the doorway wider. Design things so if something does change in your ability or someone with mobility limitations is visiting, it makes life a lot easier.

2. Reconsider Your Home Insurance – Just as you’re rethinking your space, dig out that insurance paperwork and take a close look at what you are insuring. Are your valuables still so valuable? When you downsized, did you take those items off your list? When you became an empty nester or retired, did you note that change to your insurer? A periodic tune-up of your homeowner’s insurance can save you hundreds of dollars off your premiums. Some insurance companies offer discounts if someone over 50 is retired and at home.

3. Re-examine Your Motor insurance Needs – Your driving needs may have changed so it’s time to review your motor insurance coverage. Check to see if the children still need to be listed on your policy. There are discounted insurance policies for people over 50.

4. Take a Long-Term Look at Life Insurance – When you retire, you can no longer rely on your employer for life insurance coverage. So before that happens, research life insurance policies and rates. With people marrying later and with second families there is still definitely a need for life insurance. You must consider what would happen if you’re gone. Will your family be able to maintain mortgage repayments or household expenses? What about your children’s education expenses? This is definitely a time when life insurance is necessary.

5. Have a Plan – Apart from having a financial plan, you need a disaster plan. It’s especially important when you’re caring for a family member with a debilitating disease like Alzheimer’s or dementia. An unfamiliar environment can be devastating for them. Put together a list of what you need to take with you, especially medication. Iron out a plan in which you have a network of neighbours and relatives to rely on should there be an emergency.

For further information on the issues raised in this blog please contact our Castle Hill  or Windsor Financial Planning Offices.

The author is an employee of Verante Financial Planning in Castle Hill, Corporate Authorised Representative of Magnitude Group Limited, Licence No 221557, Magnitude Group Limited ABN 54 086 266 202.

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