‘We’ll never have enough funds to re­tire’

Money Magazine Australia - - ASK PAUL -

QMy hus­band and I have had su­per/ life plans with a large in­sur­ance com­pany for many years. We are 56 and 55 years old and we are not go­ing to be able to re­tire. We are con­tribut­ing about the same amount that we are pay­ing in fees each year.

We have raised four daugh­ters in the coun­try on min­i­mum wages. But we have man­aged to get them through univer­sity and helped them with a car. Now that they have all left home and shouldn’t need our fi­nan­cial help, we are re­ally con­cerned that we have been con­tribut­ing to a fund which has not ben­e­fited us at all. We do not have any money in the bank as we live pay to pay, still pay­ing our mort­gage and a per­sonal loan.

We just need some di­rec­tion, or I am afraid we will not be able to re­tire. I have pur­chased Money and read an ar­ti­cle on su­per and re­alise now we are in trou­ble.

I am re­ally dis­ap­pointed to hear about your ex­pe­ri­ence with su­per, Lyn. I am un­sure if you have been in an older, ex­pen­sive fund but you say it has been tak­ing out fees equiv­a­lent to your con­tri­bu­tions, which is a huge con­cern. As you read this, the new Aus­tralian Fi­nan­cial Com­plaints Au­thor­ity (AFCA) will be in op­er­a­tion. I’d give it a call on 1800 931 678 (free) to dis­cuss your sit­u­a­tion to see if there is any re­dress avail­able to you.

Re­gard­less, it sounds as if you are in a ter­ri­ble fund and you need to get into one that is much bet­ter suited to your needs. Low fees are im­por­tant but as your kids have grown up you may need less in­sur­ance. It gets ex­pen­sive as we get older.

It seems to me that with any sur­plus in­come, pay­ing off that per­sonal loan is im­por­tant, as is try­ing to clear your mort­gage be­fore you re­tire.

Par­ents are not good at this but I do also think a fam­ily chat about your sit­u­a­tion would help you and your four daugh­ters. I ap­pre­ci­ate you don’t want to ask for help, and you may not have to, but I do think that hon­est “money talk” in­side fam­i­lies is in­cred­i­bly help­ful. Money is all too of­ten a se­cret and this helps no one.

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