Are we planning to retire and enjoy our remaining time, spending as we go, leaving nothing for our kids? Or are we going to curb spending, eke out our retirement savings and leave them an inheritance?
Older people should enjoy their retirement and not worry about leaving an inheritance, according to most respondents in the ANU Ageing and Money Poll. “Quite right” the SKI (Spending the Kids’ Inheritance) brigade say. Indeed, at Heydays we recognise that some of us will use retirement savings to (select those that apply): freshen up the house, get a new car, see more of the world, go to more shows, learn new languages / crafts / skills, pursue hobbies, keep fit, spend time with family and friends and find a way to give back to the community.
We are healthier and living longer, so there’s a whole range of activities that call us and will part us from our hard-earned cash: treks, cycle tours, cruises, cultural tours, beaches holidays, bush and city breaks, gadgets, clothing and of course a myriad of ways to enhance our wellbeing!
Speaking of health, as we age, some of that retirement nest egg may be directed towards health care, supplementing independent living with in-home support, or even paying for more constant medical care. The days of our children being just around the corner, able to pop in and see how the ‘oldies’ are getting on, are long gone. In this shrinking world, the kids could be anywhere! So we are more likely to need to fend for ourselves and one another in our dotage.
Evidently there are many ways that the potential inheritance pot, whatever its size, can and should be used… and that’s OK because most people in the ANU Ageing and Money Poll agreed that retirees should enjoy retirement rather than worry about leaving an inheritance, right?
Not so fast! In a seeming contradiction, in the same poll, three in four Australians aged under 65 think it is likely they will receive an inheritance through property or other significant assets. Something does not add up here: whilst the majority of those polled think retirees should enjoy themselves and not worry about leaving an inheritance, when it comes to individual expectations, we expect to get an inheritance. Our kids may well be among those who assume they will receive an inheritance.
As we approach retirement, planning how to manage our money through the next 25+ years will be a real challenge. Given that loved ones may be expecting to receive an inheritance, we need to gauge first up whether there is likely to be anything left in the coffers for them – after we have allowed for all of our other needs. And then we can have the inheritance conversation with them so they know what to expect.
At Heydays we’d love to hear: how are you managing the inheritance conversation? Do you have a plan to leave assets to your children? Has this even entered your thinking?
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My partner Gary and I plan to stop working in our ‘9 to 5’ jobs in 2020, when we’ll be in our mid-sixties. The problem is, we’ve had a look at our super balance and we don’t think it’s quite enough to support the lifestyle we dream of.
We’re not alone. Many of those intending to retire in the next 12 months don’t have enough superannuation to support their lifestyle. Women are more likely to be in this predicament. The average superannuation of women intending to retire in the next year is $177,000. This is 57% of the average superannuation men have $309,000. (Roy Morgan Single Source Survey June 2018).
Neither balance is enough for a comfortable lifestyle. That requires a superannuation balance of $545,000 for an individual and $640,000 for a couple. And assumes they have paid off their home, have minimal debt and are in good health (Association of Superannuation Funds of Australia). So, unless there is a Plan B, Mr and Ms Average are heading for a modest lifestyle at best.
All in all, super balances are looking, well, not so super. It’s tempting to collectively bury our heads in the sands of denial, ostrich-like. But what if we meet the ‘inadequate super balance’ challenge head on and explore ways to generate extra retirement income?
Working for longer is an option but we’re looking for a way to generate income that gives us more flexibility. More time to travel, cycle, garden and hang out with family and friends. So how do you create an extra income stream without a regular job?
We’re exploring the opportunity provided by online businesses. It seems an attractive option. You can avoid the overheads associated with a physical shop-front, stock and employees. You can be your own boss while you supplement your retirement income. You can outsource tasks that are outside your skill set. You can use automated systems to advertise and respond to clients. And you can work anywhere – all you need is mobile reception. It’s a compelling mix!
Selecting the right type of business for you means understanding what’s possible in the world of online commerce. Here are 5 online business-types we’re exploring. They could supplement your retirement income, without sacrificing flexibility.
Blogging or Vlogging (video blogging) are great options if you like writing (or being on camera). Choose a topic you’re passionate about, develop a distinctive point of view and start blogging! You’ll need to get a domain name and build a simple blog website. Check out comparisons of blog site providers like www.startbloggingonline.com to find one that suits your skills.
If you focus on delivering original content you can build a loyal band of subscribers. You can work with partners who wish to advertise to your subscribers and generate income. Blogging takes 6 to 12 months to build a subscriber base and a rewarding income. For inspiration, check out the www.webbyawards.com.
Have you got deep knowledge about a topic? Can you organise ‘how to’ information well? If so, consider providing an information service. Topics are only limited by your skills and what people want. Think: crypto-currencies, body building, baking pastries, volunteering in South America or sea kayaking.
The key is to identify a needy market – people who will pay for the information you provide. Look at the magazines in your local newsagent to determine demand and trigger ideas (the more magazines on a topic, the more demand).
Pilot your ideas with clients to finesse a product before putting in too much effort. When you’ve clarity, chunk the information into a logical sequence. You can present these in an e-book, short videos or in an online course. Market your service through a simple website – use a website builder such as www.wix.com. Or create an online course and market it through a course supplier such as www.Udemy.com.
Have you got a specific skill set? Whether it’s in marketing, art appreciation, or biodynamic gardening, you may be able coach or mentor based on this skill. Set yourself apart with a niche subject then determine your offering and pricing.
As you’re online you can interact with you clients using tools such as Loom, GoToMeeting, and Zoom. Promotion is also easy online using advertisements on Google AdWords or Facebook.
Do you have experience as an editor, a writer, a graphic designer or a copy writer? Are you an administrative ninja, an excel wiz or presentation perfector? If you are, you may be an ideal virtual assistant.
Virtual assistants work on a task basis. Tasks can be one time or ongoing. Wherever you are, it’s easy to discuss jobs and share documents with clients, using online tools such as Trello, Canva, Dropbox, One Drive and Google drive.
Find clients by posting your services on apps such as the Virtual Assistant, Freelancer and Virtually Yours.
In Australia we’re familiar with selling unwanted gear on eBay and Gumtree for some extra cash. Now we’re starting to recognise that anyone can make a good income using platforms like eBay and Amazon. With over 310 million customers worldwide, Amazon is the main game, and it’s cheaper to get into than a bricks and mortar business.
If sourcing goods and selling them on Amazon sounds like a dark art, never fear. There are educators who can guide you through the world of selling online. They cover selecting and shipping goods, costs, pricing, listing and how to secure sales. There are various courses offered online which appear to be worthwhile, if you do your part and put in the effort. Take care when selecting a course – it’s a bit like the wild west in this area! We like Adam Hudson’s Reliable Education www.reliable.education.
If you’re keen to have the retirement lifestyle of your dreams, don’t bury your head in the sand. Consider creating an extra income stream through an online business instead. Who knows where it may lead.
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