I often noticed it suggested that you should see a financial planner a few years before you retire, so I had an initial meeting with one. I am willing to pay the fee for a plan (quoted $5500 for initial plan and 0.33 per cent ongoing), but I am wondering what they could provide me with? I am 55 and my wife is 47, we have two children, aged nine and seven. I’m looking at retiring at 60 and my wife at 55.
We are in a strong financial position. I don’t want the hassle of an SMSF, and I want to be in control of my finances. What are some of the benefits a financial adviser will provide?
We all make choices as to the tasks we do ourselves, versus those that we pay someone else to do.Credit: Dionne Gain
My dad is good at most things that involve tools, and so he services his own car. Sadly, those skills don’t seem to be genetically based. I’d end up putting water where the oil should go. So I pay a mechanic to service my car.
We all make choices as to the tasks we do ourselves, versus those that we pay someone else to do. If you are particularly engaged, financially literate, and confident in your retirement outlook, there’s no compulsion for you to sit down with a financial planner.
Were you to engage a financial planner at this point, five years out from retirement, their focus would be on validating that your plans are affordable, and there is no prospect of you running out of money in your lifetime. They would also be looking to ensure you are taking maximum advantage of the superannuation system, and perhaps looking for opportunities to optimise your tax position. There may be some scenario analysis done to test different strategy options and help you decide which pathway works best.
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The costs you’ve been quoted seem very reasonable. It is not essential that you take up the ongoing service option if you are confident in managing your investments yourself. Consider just having a plan prepared to ensure there are no blind spots you may have missed.
We all face the problem of “you don’t know what you don’t know”. The cost of advice, relative to the impact it can have over the course of your retirement, is very modest and likely a great investment that will pay for itself many times over.
I commenced a pension from my industry super when the transfer balance cap was $1.6 million. My excess balance was left in accumulation. I’m still working and don’t need the pension income. If I roll the pension back to accumulation, can I then start a new pension using the current $2 million transfer balance cap?