‘If I’m in a tough spot financially, is it smart to move to an income stream?’

Q: I am close to the retirement age of 66 in July. I am currently retired following a redundancy nine months ago. I have a small cash amount in my bank account and a small industry super fund superannuation balance. I had initially consulted both a private financial adviser as well as my industry super adviser, but have since purchased a house interstate and moved there, all coinciding with the coronavirus’ effect on funds, so wasn’t able to pursue the advice. I now need to move to income streaming for retirement. Is it better to create an income stream through my super fund or should I find a financial adviser in my new state?

A: Thank you for this interesting question. You have indicated that you now ‘need’ to move to an income stream for retirement. This is not always the right approach; the correct approach depends on your total circumstances and the cashflow you will need to fund your living costs.

In some cases, having some or all of your money outside of the superannuation environment can also be quite effective. This is where obtaining financial advice can provide significant value and ‘peace of mind’. Typically, your industry super adviser will focus on the right approach within the fund they work for and not necessarily canvass all the options. An objective external advisor should be able to provide the right advice as they are legally required to ‘act in your best interest’.

I’ve written extensively on the steps I believe are required to find such an adviser, which you can read here, and also on how much you might expect to fairly pay for advice, which you can read here.

If you have a question for Starts at 60’s money experts, email it to [email protected].

IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.