Why you still need a wealth manager in retirement
Not all things get simpler in retirement
There’s a persistent idea that retirement is the point where life finally gets simpler. You stop working and everything; the obligations, the decisions, the complexity, quietly winds down.
The reality is that while employment stops, retirement planning sets in motion with life’s financial, family and personal obligations. Some of them actually become more difficult.
Retirement used to be simpler. Mum and dad on the farm, a modest pension drawn from defensive assets, a will drafted once and never revisited. That picture is severely outdated.
Modern retirement planning involves not only lifestyle choices, but also staying ahead of real-world inflation (not just CPI), making aged-care decisions, planning wealth transfers across generations, sometimes managing property located in multiple jurisdictions, and ongoing taxation considerations.
Not to mention keeping your estate planning arrangements in sync with your investment arrangements.
The retirement risk
The risk, of course, is that you are no longer working. So, you have less opportunity to remedy poor decisions. You don’t want your wealth to expire before you do.
At First Samuel, our role is to simplify and navigate the financial retirement plan complexity for you by tailoring a dynamic wealth strategy for your unique circumstances.
Managing the retirement risk
During your working years, there was a clear approach to growing your wealth: contribute to superannuation, invest regularly and optimise for tax efficiency.
In retirement, however, the financial complexity only increases as the opportunities for adding further capital are infrequent whilst the temptations and uncertainties are numerous.
There are critical life events that may occur during retirement, such as:
- downsizing the family home
- transitioning to assisted living
- death of your spouse
- diminishing capacity or other major health event
- desire or need to support a family member
- receipt of an inheritance
Equally, there are external events over which you have little control, but that may significantly affect you financially; for example:
- Adverse fiscal event (e.g. sustained market downturn)
- Taxation changes, both federal and state
- Political gamesmanship (e.g. changes to Centrelink, aged care, superannuation accessibility, etc that adversely impact retired Australians)
Each event carries consequences that can affect the trajectory of your financial position, not to mention having estate implications. Consider just three areas where integrated advice in retirement is vital.
1. Family, gifts and the intergenerational transfer
Gifting to children is but one part of intergenerational wealth transfer. If you have built enough wealth to provide a comfortable lifestyle with something left over, you may wish to financially assist your adult children.
But giving money isn’t always straightforward. Without the right structures and safeguards, well-intended gifts can expose children (and your broader family wealth) to financial predators, failed relationships, or legal complications.
2. Estate planning is not just a will
For too long estate planning has been treated as a checklist-exercise by most financial advisers: an up-to-date will, superannuation death benefit nominations, powers of attorney.
However, modern estate planning requires people who understand both the legal complexities and financial dimensions. Not only should a trusted adviser have greater competency in these areas, but they should be diligent enough to ask for and obtain copies of critical documents, be able to understand them and to appropriately advise the client.
At a bare minimum they should also advise on:
- superannuation death benefit nominations;
- enduring powers of attorney;
- relevant medical guardianship documents; and
- the taxation impacts of the intended outcomes.
But these are just the basics, depending on the structures you have in place, you may need to cater for specific succession planning outcomes in the governing documents. For example consideration may need to be given to successor appointor provisions in trust deeds.
Each of these needs to be reconsidered when circumstances change. Indivisible or unclear share allocations between beneficiaries, assets held in the wrong structure, or a superannuation nomination that was never updated after a divorce can create expensive and/or distressing problems for the people you leave behind.
Cross-border assets add another layer of complexity. If you hold property in the UK, for example, your executor will need to go through a separate probate process under UK law before those assets can be transferred. Re-sealing a will in another jurisdiction can easily double the time it takes to administer and settle an estate, and that’s before accounting for legal costs or family conflict.
You need an adviser who understands the full picture and has the competency to flag these issues early rather than leaving them for your family to discover when it is too late.
Aged care: plan before you need it
Aged care is probably the most consistently under-planned area of retirement. Most people don’t want to think about it, so they don’t until an event forces the issue and decisions that should take months get made in days.
The financial complexity here is real. Transitioning to residential aged care involves understanding Accommodation Deposits versus Accommodation Payments, means-tested care fees, interaction with Centrelink, and whether retaining or selling the family home is the right call. Home care packages, which allow retirees to stay in their own homes longer, come with their own eligibility rules, wait times and income-tested contributions.
Advisers who specialise in aged care, and not all do, can make an enormous difference here. It’s also worth knowing that the legal side of aged care on occasion may require a solicitor who genuinely understands the client’s full financial picture.
Summary: you need advice to plan for retirement
Most financial advisers focus primarily on product selection; which superannuation fund, which pension, which investment, how long it may last and how volatile or bumpy the ride will be.
That’s no longer enough. Today’s retirees need guidance that spans estate planning, aged care, tax structuring, intergenerational wealth and long-term income planning each integrated with their investment strategy.
Retirement isn’t a destination where financial complexity ends. For most people, it’s a phase where the stakes rise and the margin for error shrinks. The decisions you make about income, tax, family, housing, aged care and estate planning will shape your quality of life and your family’s potentially for decades.
Many First Samuel clients view their ongoing advisory relationship in retirement as essential assurance, in addition to the benefits of the opportunity captured. So should all investors.
If you would like to learn more about how we support our clients before and after retirement, please get in touch.