‘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 information: The information provided on this website is of a general nature and for information purposes only. It does not take into account your objectives, financial situation or needs. It is not financial product advice and must not be relied upon as such. Before making any financial decision you should determine whether the information is appropriate in terms of your particular circumstances and seek advice from an independent licensed financial services professional.

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