It’s never too late to manage your money more effectively whether for – or already in – retirement.
But there are some money mistakes that should be avoided at all costs – those that can leave you with a lifetime of regret.
Today we recount stories of five very avoidable mistakes (not using real names). These examples are not intended to alarm you, but rather to encourage a review and – if needed – a rethink of your strategies to ensure that you are maximising your potential income – and not the opposite.
1. Spending too little
Misunderstanding minimum withdrawals
John and Maya both retired as soon as they could, which meant 69 for John and 67 for Maya. As homeowners, they had (combined) a super balance of $380,000 (well below the asset limit of $470,000 for a full Age Pension as well as deemed income limits). So they have been living on a full Age Pension of just over $45,000 per annum. They believed that they were also able to withdraw super at the rate of 5% per annum as a top up. This amounts to $19,000 per annum, which makes their total retirement income about $64,000 per annum. They had plans to manage this income fairly frugally in order to travel every two years or so, for five weeks in Australia or the occasional three week trip overseas. Their house is large and has required quite a lot of their income for maintenance and minor, age-friendly, upgrades. But their plans are now unlikely to come to fruition, as John has received a diagnosis which suggests he has less than two years to live. They have maintained health insurance so believe that their medical bills will be largely covered. But the lost opportunity to have more adventures together is now a painful reality.
