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My retirement money is dwindling – what should I do?

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I am now a widow and receive the pension but I have about $50,000 in an allocated pension. Because of the stock market I lost $6000 last year and I am paying an adviser $1500 a year as well. I am not sure of my fees on my super fund but it has become a disaster.

I am 77 years of age and I hoped my allocated pension would be able to give me $5000 or so a year for at least the next 10 years but the way things are going it could be gone in six years or even less. Should I put my money in a term deposit? Should I change advisers? Any other ideas?

As I don’t know your full circumstances, the following is general advice.

Given your balances, your age and what you’re being charged, I will use the line of an old accountant mate who would ask you, do you have a pair of running shoes? If you do, use them to run away from that adviser as fast as you can.

With only $50,000 at your age, you should think about switching your balance over to an industry fund, which will be miles cheaper, say around $300 to $400 if you shop around.

I don’t think you need a private adviser and this advice is coming from someone who owns a financial advice business! Most advisers won’t recommend industry funds but I think they work for lots of people.

A term deposit is an option but I think a conservative option in an industry fund could give better returns over the next 10 years and might be able to stretch out your allocated pension balance until you’re in your 90s.

As I say, you don’t need an adviser and so have a look at some of the best and cheapest industry funds such as Australian Super or Sunsuper and they should be able to help you wrestle your funds from the adviser and the fund, which I’m sure is overcharging you as well. Remember though, this is only general advice.

For advice you can trust book a complimentary first appointment with Switzer Financial Services today.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

Published on: Monday, October 24, 2011

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