Retiring in style is all in the planning

- November 2, 2018 3 MIN READ

You’re fit and healthy, in the prime of your life. So why should you be thinking about aged care and retirement now?

According to Assyat David, Director at Aged Care Steps, that’s precisely the reason you should be contemplating what you will do in later life. David tells Kochie’s Business Builders (KBB) all too often the decision to place someone in aged care is rushed with little thought behind it. This lack of foresight can often be to the detriment of the person being placed in a facility.

“Sadly, many aged care decisions are made in the car park of a hospital, demonstrating that such decisions can be rushed and often made under a high level of emotional stress. I believe that we have an opportunity to help Australians and their families gain the education and support to deal with their frailty years in retirement and thereby have confidence that they have made informed aged care decisions,” David says.

David suggests when putting a retirement strategy into place it’s important to consider the three phases of retirement (carefree years, quiet years and the frailty years) which each have different income requirements and considerations.

“The important step is to plan for these three phases as early as possible (at the pre-retirement stage) and to tackle the difficult aged care conversations as early as possible. By doing so, individuals can open up choices that provide them with greater control and independence,” she says.

With life expectancy increasing, many Australians are concerned with how they can be certain to have enough retirement funds to go the distance. David suggests it is a real risk for retirees but there is no magic answer. However, managing spending and minimising risk is a good place to begin.

“Ensuring individuals understand and manage their spending patterns in retirement and their exposure to growth assets (shares and property that have the potential to outperform over the long term, albeit at higher levels of risk) will all impact the sequence of market movements on retirement savings,” she explains.

More importantly, David suggests planning and projecting the income requirements for the three phases of retirement will assist when it comes to tackling the challenges. Spending habits vary widely in each phase.

David says in the initial period of retirement or the ‘care-free’ years, many retirees focus on travel, spending time with family and friends and basically loving life.

“Health and wellbeing during this time are good, and the income needs of this phase of retirement are generally well accounted for in the planning process,” David says.

The second phase includes the ‘quiet’ years when health starts to decline.

“As we experience some disability, the level of activity and therefore spending declines.”

“Phase three is when we experience severe disability and can be described as the ‘frailty’ years. This can account for 17-25 per cent of retirement years, where help may be needed with daily living activities, and more is likely to be spent on dealing with aged care needs.”

Seeking help from an accredited aged care advice professional will help you to understand your options and its implications the impact on the Age Pension, aged care means-tested fees, cash flows, estate planning outcomes.

“It also helps individuals avoid the risk of making the wrong decisions which often cannot be undone,” David adds.

David suggests it’s vital people get ‘aged care ready’.

“For Australians (and their families) peace of mind and a clear roadmap can make all the difference. The key to this is planning well ahead of time for their aged care needs, understanding where to start and what decisions need to be made as well as what it will take to get the care they need and gaining support to navigate through the process of moving into residential care or accessing home care.”

David recognises the industry is rife with horror stories and suggests its essential people do their homework and explore their options.

“People need to first understand the features, fees and services provided by the facility.  Having a checklist of questions to ask and things to consider can help properly compare the different facilities.  One of the best tips is to visit the facility, look around, speak to the staff to gauge how they service their residents.  Often it is the people in the facility that make the big difference.  A good time to visit is at meal times to get a good feel for the quality of meals served.”

Assyat David is a guest speaker at the Your Money Your Life free personal finance expo on at the International Convention Centre, November 9 & 10. For more information and to register for your free ticket head to ymyl.com.au/ymyl-event

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