Helping my parents plan for retirement / workcover (vic)

Hello,

My parents are heading for retirement age and are keen to start doing some planning. They have no idea where to start and I'm not much help!

Should they see a financial advisor? How much does that cost? Can they access these services through their superannuation?

They don't have a heap of superannuation as they've been in low paid jobs most of their lives.

They want to move house to be closer to me (other side of Melbourne metro area) and aren't sure whether they should buy and sell the house before or after retirement.

Dad is also currently on workcover after an injury last November. A pallet fell on his neck after a forklist knocked the stack. He's not sure he will be able to return to full capacity anyway. Is it likely he will get a lump sum? Do we need to sue to get that?

Any thoughts that anyone has in this area would be greatly appreciated!

Cheers,
Fiona

We are looking this ourselves and a couple years ago saw a financial advisor. The cost was not much as we went thier suggestions.

It is a big decision to make and we will be going again soon to talk over our next move.

They should be able to see someone from there super fund for advice and get them to start making a list of quetions to ask. One of the important ones to ask is how it will affect them tax wise.

He might need legal advice about the workcover issue

My DH had a huge accident last year at work and is still having stuff to do with workcover. From what I understand, workcover may pay a lump sum, but only after a certain number of months (I think it's around 10???) and only if their assessor deems them to be more than 5% disabled at that time. I'm not sure of the amount of the pay out if it does come. As for suing, my DH looked into that for a while. He was told by a lawyer that it would only be worth suing if he was permanently more than 5% disabled, and then the majority of the pay out would go to workcover to pay them back for all the wages/medical costs, etc they have paid for him.

By the sounds of it a Financial Planner would be really useful for your parents. A good fee for service one will be able to help them make the sort of decisions you're talking about, but also look at options like putting their super (or any other lump sums) into an allocated pension so that they get a regular income stream vs keeping them as a lump sum, what government benefits they can access, how they can make the most of the any lump sums etc.

It's also very useful in preparing for retirement, particularly if they're over 55, there are options available to them through super/transition to retirement pensions where they salary sacrifice their income into super and reduce their income tax significantly. They then access the super they already have in the form of an allocated pension and use that as an income. It can be a bit complicated to explain, but the tax savings can be huge and let them save that little bit extra in the last year or two.

When looking for a financial planner, I think it's really important to go to a fee for service planner who doesn't accept commissions. Many planner operate on a commissions basis, so don't charge you anything, but make their money by getting paid a commission for placing their clients money in certain products. With a fee for service planner you can be sure that the advice they give is based on what is in your best interests, rather than who is going to pay them the biggest commission. The industry super funds have a fee for service financial planning company which they refer members to, the first appt is free. If you google Industry Fund Services you will be able to find their website.

HTH