‘How can I maximise my passive cashflow during retirement?’

Dec 15, 2018
Focusing solely on return on investment can lead some people into risky financial situations. Source: Getty

Q. How can I maximise my passive cashflow during retirement?

By passive income, I assume you mean income that needs little work ? As weird as it seems, we’re better off identifying what we actually need rather than simply trying to max things out. That’s because maxed income may mean you have to pay more tax than you need to or worse still, limit or prevent access to things like a part Age Pension or concession cards from the government. The ideal scenario is to have the income you need to meet your day-to-day expenses set up nicely, but then have the remaining money in a place where it grows – but where you can tap into it as required.

That way, that $20,000 withdrawal for the trip to Europe keeps working away until you need it, rather than sloshing around in a bank account paying little or no interest. It is why things like superannuation and account-based pensions are such an effective tool for retirees.

The other problem in simply seeking the maximum income is that you are prey for the many rat-bags that promise high interest rates with ‘low risk’. Tragically, those that got stung on things like Westpoint in 2005 and Elderslie Finance in 2008 were all seeking to maximise their passive income. Many lost everything.

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.

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