At the end of the day, the final say on your financial decisions is down to you. So how can you be sure you’re making the right call?
It usually comes down to getting as much reliable information as possible beforehand, to making sure your decisions have proper context, and to truly understanding the risks and benefits.
This is when, love it or hate it, another opinion can make an enormous difference – such as that of a financial adviser.
Some in the Starts at 60 community swear by their financial adviser; others are a little warier.
For those on the fence, there are some important steps to consider before putting all your faith in independent financial advice.
We spoke to Tim Southerden*, a financial planner with AustralianSuper, on how you can get this guidance without compromising your financial independence.
“It’s a matter of seeking financial advice that’s not biased by commissions or by who the financial planner works for,” Tim says. “It’s important to see a financial planner you’re comfortable with, who you know is acting in your best interests.”
Thankfully, it’s easy to test the waters first.
“AustralianSuper offers a cost- and obligation-free initial meeting – one per lifetime per person – to see if we may be able to assist,” Tim says.
“That could be simply using us as a sounding board. Usually, though, it’s about us optimising their situation.
“We find that most people who seek advice are financially better off when they retire. People are unlikely to know about all the opportunities available unless they seek financial advice.”
When it comes to managing your super, this guidance can make a world of difference, such as ensuring your investments continue to work for you even after you begin drawing down.
“We encourage people to let us do projections for them,” says Tim. “We recommend they draw down less than what we think the investment’s going to earn, adjusting for inflation.
“So if your super account is earning 7%, and you were drawing 4-5% a year, you’d be allowing 2-3% inflation each year. In which case, we’d say you can afford to draw down.”
An extra set of eyes can also offer you an invaluable safety net.
“I always insist that the documentation is as correct as we can make it,” says Tim. “If there are any special requirements for a member, then we always put details of that on any application form.”
But when it comes to making those all-important decisions, the final word remains yours alone. It’s simply a case of making it with a full understanding of the options available – and before those options close off.
“Whether you’re five years away or ten years away – there’s no time too early to plan your financial future,” says Tim.
“We’re happy to meet people at any stage, but if they leave it too late, they may miss out on opportunities, such as saving a lot on tax. So we’d encourage people to start planning their finances earlier rather than later.”
Have you ever seen a financial adviser? Do you prefer to seek the guidance, or handle research and planning yourself?
* Tim Southerden is an Authorised Representative of Industry Funds Services Limited ABN 54 007 016 195 AFSL 232514
This article has been sponsored by AustralianSuper Pty Ltd ABN 94 006 457 987, AFSL 233788, The views expressed are those of Starts at Sixty and not necessarily AustralianSuper. The information is general financial advice and does not consider any specific individuals needs or circumstances. You need to consider your own circumstances to see if it is right for you. For more information, please visit the AustralianSuper website.