Last year I lost my single Government Aged Pension after receiving an inheritance. I took on a friend’s Financial Adviser . Mistakes have been made with the adviser apologising and issues with a bank transferring funds have left me seeking peace of mind with investing. I have also reported a scammer.
I have $750k sitting idle. No income from it. I am 74yrs of age and don’t work. I have an owned home, car and a healthy lifesyle. I am needing guidance on how best to secure a regular income of around $700pw.
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Welcome @LEARNER to the community.
Specific investment advice really has to come from approved and licenced advisors.
It would not be appropriate for any member of this community to offer any specific advice.
However, I can say that you are not going to get $700 per week with the money sitting in a bank account at current interest rates.
So you really do need to sit down with an investment advisor or financial planner, despite your recent experience with one. Go and buy some investment magazines and study up on what options are available to try and see how to get a better return than banks offer.
I would be very wary of using the Internet to look for investment advice; scammers infest that area.
And finally, the golden rule. Never put all your eggs in one basket. If I were you, consider that you have ten lots of $75000 to be invested. Each one separate.
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As only licensed individuals can offer personal financial or legal advice, your need is out of scope for the Community but general guidance can be provided.
As @Gregr closed with, diversification is important.
In my experience some ‘financial planners’ whether in practices, banks, or independents prioritise their commissions so it is a mine field to find one who will put your best interests above their own 100% ‘without fear or favour’ even though they are supposed to do that all the time.
Some resources that might help get you started.
Although an advisor’s page, this provides an estimate of how long your funds will last by plugging in your rate of return (eg interest if a bank account or term deposit) and expected inflation. Investment income is not that simple or predictable but the page can give you an idea of where you are versus where you want to be financially.
Especially with advice you may or may not get what you pay for and unless the advisor has their own dollars in what they recommend their advice is risk free to them but might be adversely risky or of lower return to yourself. Even when working for your best interests some advisors may ‘deliver’ a 1% return and another 10% for example, each with their own view whether that is best for your risk profile and considering the same risks, just different investments.
Paying an agreed and fair fee for a financial plan is a good way to start if you are new to investing, and educating yourself about shares, term deposits, online savings accounts, investment trusts, their impacts on pensions, and so on is imperative so you know what they are talking about even if not the details.
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If you have not already considered, the following were key considerations in our retirement.
For those on an aged pension or part pension there are a number of concessions or support entitlements. Once self funded note some which are income dependant reduce or are lost, while others require one to be on a pension. A reliable and professional retirement specialist will be able to assist with understanding the impact and cost.
Although none of us may intend to, there is always a possibility of needing aged care services, either in the home or having to move into residential care. It may be useful to ask your chosen professional planner/advisor to explain how your circumstances now and investment decisions can impact on access.
If you still have some money in super - (we have an industry super fund), they may also offer access to a financial planner. Some services in our instance were at no cost.
There are simple through to complex strategies for investment in retirement. The more complex are often promoted as offering a better return, but often come with risk or the need for ongoing professional support and a paid accountant to do the annual tax returns. Our personal preference (not intended as advice) has been to progressively reduce the complexity and keep it simple. One of us is into their 70’s. I do one simple personal tax return each year. As we get older the last thing we would wish for is to leave a complex web of investments for our children to untangle.
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Thank you. Today I gained good ground and understanding of the road ahead. Simplicity…yes…I agree. The advice taken onboard.
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Thank you so much. All good advice which helps a lot.
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We were in a similar situation, but with about 10% of what you had. My husband had retired from full time work at 73 but was offered more work at 74yrs, enough to meet the “work test” and we put the lot into a Super Pension / Income account with an Industry Super Fund. Returns on this have run from 5% to 13%, so it has grown faster than leaving it in the bank.
Rules have changed since then, so contact your Super fund for advice.
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The rules around superannuation and what and how and age and work status are baffling.
Best left to a specialist.
But as a benchmark return for reasonably good Australian based investments like super funds, unit trusts, Australian shares with dividends and imputation credits, I would consider getting at least 5% PA easily done. I’ve managed that for quite a while despite various global issues like the GFC and the Covid pandemic.
And that is distributions, before considering growth. Sure beats the 2% or less from interest accounts.
The advice we can give is only general in regards to investment advice. Personal circumstances are very variable. As advice to seek appropriate investment advice has been given and the original poster has seen that advice, further discussion of personal investment choices is getting into areas that we should avoid.
Thank you to all those who contributed.
