26th Oct 2018
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Friday Flash Poll: Are you prepared for an emergency?
Friday Flash Poll: Are you prepared for an emergency?

One of the biggest mistakes retirees make is not being financially prepared for the unexpected.

Setting aside funds to help cover the cost of any urgent and unexpected expenses means you won’t need to borrow if a crisis happens and you need money quickly. It can give you peace of mind that you can face any bumps in the road.

Not having an emergency fund – or rainy-day fund – is one of the biggest oversights by retirees. But it’s not easy to put money aside for those just-in-case moments. Especially for those struggling to make ends meets, waiting for the next payday.

In the YourLifeChoices Retirement Matters 2018 survey, we learnt that health is the major concern for retirees.

Around 70 per cent have private health insurance that may cover most unexpected health issues, but what of those who can’t afford insurance? Or those who don’t believe health insurance is necessary?

And what happens when the increasing cost of cover becomes too high a hurdle for struggling retirees to jump?

This is when having an emergency fund may come into play and yet, most retirees can’t afford to have such a ‘luxury’.

And unexpected health issues aren’t the only ‘catastrophe’ faced by today’s retirees. Simple things, such as your car breaking down, your fridge or washing machine blowing up, your hot water service going on the fritz, or even a family member becoming seriously ill can take you by surprise and present enormous challenges financially, physically and mentally.

So, do you have a financial plan in place to deal with this type of situation? Do you feel that you’re prepared to deal with any unexpected retirement expenses?

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If you need help building an emergency fund, check out www.moneysmart.gov.au





    COMMENTS

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    Chris B T
    26th Oct 2018
    11:05am
    Centrelink views Those Rainy Funds as Part of Your assets, so your Financial Foresight can be a burden as Well.
    Especially if your funds are held in cash or bank deposit for ease of access.
    {;-(
    JB
    26th Oct 2018
    11:10am
    Very true . And just how much should we keep in a emergency fund
    Old Geezer
    26th Oct 2018
    11:26am
    The trick is not to let people know you have any money at all. Most people think us over 65s are poor so I say let them continue thinking it.
    Rosret
    26th Oct 2018
    12:47pm
    Isn't it Chris! That's why I think we should be like other countries where every retiree receives a pension and whatever the individual has put away for retirement is their bonus - not the government's.
    Rae
    26th Oct 2018
    1:36pm
    You mean be fair and equitable Rosret? We don't do that here in Australia.
    gerry
    26th Oct 2018
    5:06pm
    I joined national seniors and felt so inferior..At the meetings we had to see how they had all outdone each other on cruises,,,,Some had 3 million dollar houses and got full pension ,They called it their cruising money . Wheras Ihave a tenth of that and my savings are invested in a fund that Bill Shorten is going to take away my taxrebate, and I don't get a full pension
    Rae
    26th Oct 2018
    5:40pm
    Shorten won't do it gerry and if he does all Hell is going to break loose. I don't rely on franking credits but I have lots of friends who do and are in your position and it's not okay. We'll fight it don't you worry about that.

    Too much unfairness going down now and people are getting angsty.When they get down right angry sparks will fly.
    Cowboy Jim
    26th Oct 2018
    8:39pm
    You can have a serious amount of money set aside without affecting your pension. Let us be reasonable, $200'000 in a bank account will not affect your pension in any way as a couple and a little bit less than that will be acceptable for singles. We do not have to be poor as church mice to reach old age.
    OlderandWiser
    27th Oct 2018
    8:39am
    Actually, you can have quite a lot of assets and still get a pension, and be far better off than many who saved to be self-funded. The government has made it disadvantageous to save more than the maximum allowed under the assets test, unless you can get well over $1.5 million set aside (for a couple). Pretty stupid, I think! And Shorten wants to totally demolish SFRs so there are hundreds of thousands more on pensions. Idiotic!
    OlderandWiser
    27th Oct 2018
    8:47am
    Rae, have you and your friends sent submissions to the inquiry?

    Gerry, did you send a submission?> Not too late. Send to info@fairretirement.com.au or economics.reps@aph.gov.au. Doesn't have to be formal or technical. Just tell them how removing franking credit refunds would affect you and say what you've said here - that folk with $3 million houses are cruising on full pensions.

    BTW. Don't let it stop you submitting, PLEASE, because folk getting no pension are going to be badly hurt, very unfairly, but I think part pensioners are exempt from Shorten's attack on shareholders. That's one of the serious wrongs. If you were a part pensioner in March 2018, you keep your refunds. But if you were an SFR on that date, no matter what misfortune erodes your savings, or if you only had $1 over the limit that day, you LOSE YOUR REFUNDS FOR LIFE under a-hole Shorten's cruel policy.

    Please, everyone, tell the mongrel ALP leader how unfair and destructive he is being. Pensioners WILL hurt too, because the economy will hurt. Taking investment out of Australian companies and pushing hundreds of thousands of SFRs onto pensions, plus reducing spending power, will DO IRREVOCABLE HARM that will impact on EVERYONE. And any claim that Shorten is attacking the wealthy is a BLATANT LIE. He is letting the rich KEEP THEIR CREDITS.
    Cheezil61
    26th Oct 2018
    12:31pm
    Seriously..who can afford an 'emergency fund' ??!!! Hard enough to keep up with the day to day bills , mortgage & food costs & i work (with a decent wage-I'm 57 & need to get out of current job in about 3yrs time as shiftwork is messing with my health))-, gonna struggle in retirement like 80 or 90% of others no doubt do that are worse off than i am! Wasn't there a news story recently about large number of Aussies (especially older/pensioners) living below poverty line (which stunningly was around $400 per week or a bit more)!!!
    Rosret
    26th Oct 2018
    12:44pm
    Cheezi your situation is not like 80 - 90% of others.
    At 57 you should have savings, have your house paid off and a reasonable superfund.
    If this hasn't happened then I would imagine your life story has had a few glitches.
    If you have a decent wage then money should be put away every week. Rule of thumb for younger families is to have 2 months salary in reserve and 2 months in emergency food in the kitchen. By late 50s and 60s most should be tipping the $100K+ in investments and savings.
    Perhaps your home will be your future asset and you will be able to downsize and live in a cheaper location come retirement.
    JoJo
    26th Oct 2018
    2:16pm
    Although we have a small contingency plan, and own our own home, we never know what we will face in our old age. My husband is disabled and dependent om me. If I get ill, we will could have major problems.
    Chris B T
    26th Oct 2018
    2:55pm
    You are allowed a funeral fund so to be prepared now why not a "RAINY DAY FUND" of $5K-10K so not to be a burden on anyone.
    The amount not means tested like the funeral fund.
    Of coarse this would seem to much for some and not enough for others.
    Then there will be those who can't help themselves and spend.
    Others would never have that sort money to lay idle without the Present Need.
    {:-(0)
    gerry
    26th Oct 2018
    4:58pm
    I,m giving my self to the students and told them to put the rest in the bin,then there is more for the Hollows Foundation
    Cowboy Jim
    26th Oct 2018
    8:50pm
    Cannot get over this "means tested" bullshit when it comes to an emergency fund. You can have a lot of money and means testing does not come into it. By all means if people are that concerned why not get 20 $100 bills and put them in a book for an emergency fund. But DO have have it handy if the crap hits the fan.
    Chris B T
    27th Oct 2018
    10:22am
    Cowboy Jim
    How do you fill out your application for OAP or you don't fill one out.
    Assets are to be counted other than Family Home and Personal Belongings.
    Regardless where the money is stored it is still an asset other than the allowable place ie.
    Funeral Fund/Bond.
    gerry
    26th Oct 2018
    4:52pm
    ,, Boo Hoo "I cant pay my power bills"",All over Australia there are single mothers with 3 kids, each has a cellphone, mother has a car,and tv in every room,nice bikes rusting on the lawn,and munching on takeaways ,,there are 3 generation dole bludgers who go to town, straight into makkers and Jbi hifi and usually get there by taxi,>>>Who is going to keep them in future??? AND THEY VOTE,,A local icecream softserve man was told "Don't go around the marina ,they make their own icecream,bread the mean devils :: I say gud on em
    Jezemeg8
    26th Oct 2018
    6:09pm
    As I was forced into retirement because of disability in the very year Universal Superannuation started in the field in which I worked, my 'golden handshake' was a whopping $1000! Before that women weren't catered in retirement products, we were expected to be in our husbands. I'd worked all my life at minimal wage but I enjoyed the work. It helped me support my 3 children after my divorce. So when I was forced to retire I had no savings. No, I don't use the many buy now, pay later services that are available mostly because I don't have the money, if I need something I save for it by limiting my use of something else. If an emergency arises I'll deal with it when it comes, I'm not going to worry about it now, it might never happen.
    OlderandWiser
    27th Oct 2018
    8:50am
    Hard to be prepared for a medical emergency. The costs are so outrageous now. And health insurance is simply not affordable for those on lower incomes, and often not a value proposition anyway with all the exemptions and gaps.


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