Turn your retirement hobbies into extra cash
Retirement is a great opportunity to spend more time on what you enjoy. Turn your retirement hobbies, belongings and expertise into cash with these five tips.
Some parents just don't know when it's time to stop supporting you and to start focusing on them.
It's a good problem to have – when you’re growing up.
But when you consider that only half of Australian households will have enough in superannuation savings, personal assets and age pension to fund a comfortable retirement, you start wondering if your parents will be okay.
Below, three adult children and one financial adviser from Viridian Advisory give four reasons why our parents need to stop worrying about us, and start planning their retirement.
1. It's time to give back
– Hugh, 24, from Northcote
Perhaps your parents worked their backsides off to get you the best possible education. Maybe they stood around in the rain for hours waiting for you to finish footy training. Or maybe they traded in the convertible for a station wagon.
Whatever the case, it's only fair that once you've flown the coop that you should look to pay your parents back, says 24-year-old Hugh1.
What he didn't anticipate, however, was that the rewards went both ways.
“The most amazing feeling is taking a step back and seeing your parents feeling comfortable and enjoying the period leading into and during retirement,” says Hugh.
“That's something you won't expect when you sit down and have discussions with a financial planner.”
Hugh adds that getting his parents to actually see a financial adviser took about six months. His dad, who was renting at the time, has since bought a place in North Fitzroy with his partner.
“It started off with me pestering them a bit, saying 'what are you doing now that I'm not there?' Later it snowballed,” he says.
“It might take a while but it's really rewarding.”
2. Things may be better than you think
– David, 47, from Toorak
Almost half of all Australians2 worry that they won't have enough to retire on. But for some, all of those sleepless nights may not be warranted.
When 47-year-old David finally got his father-in-law to crunch the numbers, there came a welcome surprise.
“He thought it was a bigger mountain to climb than it probably will be,” David says.
David and his wife first broached the topic with the 67-year-old somewhat indirectly.
“I was talking about what I was trying to set up for my wife and I, and he was quite interested,” David recalls.
After a bit more prompting, David says his father-in-law began seriously planning for retirement.
The most amazing feeling is taking a step back and seeing your parents feeling comfortable and enjoying the period leading into and during retirement.
3. A different kind of ski holiday
– Sally, 40, from South Yarra
Sally is constantly trying to get her parents on a 'SKI' holiday - a Spend your Kids' Inheritance holiday.
“My brother and I have always been self-sufficient and said 'we don't need anything – if you've got it, spend it',” says the former investment banker.
While her parents wanted to leave the children money, Sally felt they didn't even know how well they could fund themselves in retirement.
So a few years ago, Sally had a frank conversation with her parents.
“You kind of have to sit them down and say: 'this is serious stuff. You're accustomed to a particular lifestyle and you need to know how long you can keep that up. You can't suddenly go back and get a job',” she recalls.
“So I said 'the sooner we know, the sooner we can do something about it'.”
4. Empower both yourself, and your parents
Glenn Calder, CEO of Viridian Advisory
Encouraging your parents to focus on planning for their own retirement can actually have huge benefits for you.
“When parents gift money to children they're not actually giving them the skills required to get ahead in life – it's better to impart good financial skills on them and get the children standing on their own two feet,” says Calder.
“As they say, give someone a fish and they'll eat for a day. Teach them to fish and they'll eat for life.”
Not only that, but by insisting they focus on themselves, you can help make their retirement fulfilling, and fun.
“They'll be able to do things like go on a trip every year, rather than every third of fourth year. Or shout themselves premium economy or business class on a flight, rather than economy.”
“It can be the difference between subsistence and having a very comfortable retirement that they'll really enjoy,” Calder says.
If you think it's time to start helping your parents prepare for retirement, you can find a financial adviser here.
1 Last names have been withheld to protect the interviewees’ privacy