“The reality can sometimes be that people your friend doesn’t know very well are waiting impatiently for their money. This can create terrible stress and anxiety, particularly for someone with no knowledge of the law, tax or accounting.” – Anna Hacker.
You’ve worked out the big retirement issues like your income, where you want to live and how you want to spend your time. But dig a bit deeper and you’ll find a whole new layer of smaller – but no less important – changes you can make to save money, give you peace of mind and support your wellbeing in retirement.
We’ve put together a list of all those other things you need to consider when assessing your retirement admin, from insurance to estate planning to opportunities for discounts and rebates. They can be easy to overlook as you concentrate on the big stuff but are well worth thinking about.
1. Insurance: do you need more or less cover?
Your insurance needs might change in retirement. It’s worth checking you’re not falling short on the cover you need or wasting money on cover you don’t need.
Life insurance is necessary if you have dependents or a partner, as it helps to repay any debt or cover expenses should you die. But, for obvious reasons, it usually gets more expensive as you get older, either with higher premiums or less cover for the same price. If your children are taking care of themselves and you’ve paid off your mortgage, it may be an unnecessary expense. A life insurance calculator can help you assess how much insurance you might need – or, if in doubt, talk to a financial adviser.
Contents insurance is another one of those things to review depending on your home situation. For example, if you have a large home and feel comfortable hosting visitors you might consider boosting your retirement income by using a platform such as Airbnb or Stayz to rent out your unused space.
“This can be a good idea, but you need to be clear about whether your home and contents insurance covers this,” says Steve Hollow, Head of General Insurance at Australian Unity. “You may need some form of landlord insurance that includes damage caused by paying guests, as well as public liability insurance in case someone is injured while they’re staying on your property.”
On the other hand, you could be over-insured if you live in a secure apartment building or retirement village.
“Retirement villages tend to have fewer break-ins and very strict regulations to reduce the chance of fire,” Steve says. “This can lower your insurance costs.”
Private health insurance
Private health insurance premiums don’t increase as you age, but it’s important to make sure your cover matches your needs. For example, many insurers offer a range of excess options – the higher the excess, the lower the premium. You may also be able to opt out of unnecessary cover such as maternity and IVF, as well as extras you know you’ll never use. Consider reviewing your cover annually to see if it still works for your situation.
Retirement is often the time in our lives when we dream about catching up on our travel bucket list. But did you know that travel insurance provides cover from the day you make your booking?
“It’s common to book a cruise or a trip a few months ahead and leave travel insurance until the last minute,” Steve says. “It doesn’t cost you any more to take out a policy right away and, that way, you’ll be covered if you have to cancel for any of the events defined in your policy.”
2. Legalities: is everything in order if the unexpected were to happen?
We admit that it can be daunting to plan for your eventual illness or death. But feeling confident about the future will help to support your wellbeing, and taking concrete steps to prepare for the unexpected will give you peace of mind that the people you love will be looked after.
Anna Hacker, National Manager, Estate Planning at Australian Unity Trustees, recommends reviewing a will whenever there’s any major life change – and that includes retirement.
“On a practical level, there could be references to a business or property you no longer own,” she says. “Or you may want to make provision for new grandchildren, or be more specific about who should receive particular assets, such as jewellery or art. You could find you don’t need to make any changes at all and that, in itself, can bring peace of mind.”
An up-to-date will also makes the lives of your loved ones that much easier when they are grieving your loss.
A friend might feel honoured to be entrusted with administrating your estate – but, before you extend the invitation, you should consider just how difficult and demanding the job can be, and whether you want to burden that person with the job.
“The reality can sometimes be that people your friend doesn’t know very well are waiting impatiently for their inheritance,” Anna explains. “This can create terrible stress and anxiety, particularly for someone with no knowledge of the law, tax or accounting. The same could also be true for a family member. Independent professionals such as Australian Unity can relieve that pressure and actually save money in the long run.”
Power of attorney
It’s hard to imagine that there may come a time when you’re unable to make your own decisions. Yet appointing someone to make important decisions if that should happen is one of the most thoughtful things you do. A power of attorney gives the person, or people, you appoint the power to act in your best interest to make decisions on your behalf.
It’s important to choose someone you trust implicitly, says Anna. “If you haven’t signed an enduring power of attorney, one will be appointed by a guardianship tribunal, and it may not be someone you or your family would be happy with. This can increase the pressure on family members who are already concerned and stressed.”
Professional financial advice
When you’re finally living your retirement dream it’s easy to forget how valuable ongoing financial advice can be. So, while not strictly a legality, it’s important to keep on top of your finances.
“Changes in the economy will often have a disproportionate impact on people who are retired,” Anna says. “A financial adviser can make sure your financial structure can adapt to different conditions and that your investment strategy is still on track.”
An annual financial health check is a good way to ensure you have all your ducks in a row.
3. Saving money: are you eligible for discounts and rebates?
Retirement brings a number of new opportunities to save money – for example, work expenses, like the daily commute, are no more, and the kids have left home. There are a lot of perks and discounts available to retirees, so it’s worth checking that you are eligible to take advantage of these cash-saving options.
If you live in a retirement village you could be eligible for low-priced contents insurance. For example, Australian Unity has a Retirement Living Discount of about 20 percent on standard rates.
Retirees may also qualify for discounts on car and other insurances. Steve Hollow recommends the Insurance Council of Australia as a starting point for information.
If, as a self-funded retiree, you don’t qualify for a government Age Pension or payment from the Department of Veteran Affairs, you may still be eligible for a Commonwealth Seniors Health Card. This can provide some great benefits, including access to Pharmaceutical Benefits Scheme prescription items, savings on certain Medicare services and cheaper utilities.
Many small businesses provide discounts for retirees but don’t mention them for fear of giving offence. It’s worth asking the question – a simple “Do you offer a seniors’ discount?” usually does the trick. Discounts are often between five and 10 percent, and while it might not amount to much for small items like your daily latte, every little bit helps.
Finally, don’t forget to take it easy
When you’ve spent years hard at work, retirement can be your time to relax. Making sure you have all of the smaller things in place brings ease and peace of mind. By ticking off the ‘retirement admin’, you’ll have more time and headspace to concentrate on the things you love. After all, life is there to enjoy.
Disclaimer: Information provided in this article is of a general nature. Australian Unity accepts no responsibility for the accuracy of any of the opinions, advice, representations or information contained in this publication. Readers should rely on their own advice and enquiries in making decisions affecting their own health, wellbeing or interest.