OPINION: Retiring in the midst of a new relationship

OPINION: It is becoming more common to meet new clients who are seeking retirement planning advice and need special help as they are in a relatively new relationship.

The latest statistics show that around 20% of people marrying have been previously married, and almost 40% of these are over the age of 50.

There can be a whole swathe of things that each partner might bring to the table in the way of assets, liabilities, blended families and different dreams and aspirations.

When it comes to retirement planning it is common for each party to want to protect a portion of their assets for the benefit of their natural children.

If this is the case there needs to be appropriate planning and specific documents put in place.

The focus is often on whether to combine the assets of the two new parties and to come to common ground on the income needs and how this income will be achieved.

This more often than not leads to utilising assets to create parity with the levels of superannuation owned by each, and deriving the income stream needed out of these benefits by ultimately using them as pension funds.

Another scenario might be where two people come together and one, or maybe both, are age pension age and one has significant assets and the other a relatively small level.

This would result in latter receiving a high level of available Centrelink Age Pension. When they cohabitate and become a couple in the eyes of the law, they are then assessed by Centrelink as being a couple, and all the assets are combined for assessment purposes. In this case one of the parties may be disadvantaged from an age pension benefit point of view.

If one of the parties is going to have their benefit reduced there usually needs to be a discussion on how that party can be compensated by the other for this, so things can remain fair and amicable.

We find that the main issue is around who the assets go to when both the partners are deceased.

This is not an insurmountable issue and advice can be obtained easily on how to resolve this. If the funds are in superannuation or an account based pension for instance it can be stipulated via a binding nomination who it passes to upon death.

In new relationships, the steps to follow are to decide on the income needed, how to structure the assets, the amount of assets to go to the surviving partner and the wishes of both for the destination of assets upon the death of the last partner.

All of this can be achieved quite easily by seeking advice from someone qualified and experienced in dealing in the areas of investment advice and estate planning.

For more Information contact Tim Maher at Maher Digby Securities Pty Ltd - Financial Advisers - AFSL No. 230559 (see advert Page 3). Ph: 07 5441 1266 or visit our website http://www.maherdigby.com.au

This document was prepared without taking into account any person's particular objectives, financial situation or needs.

It is not guaranteed as accurate or complete and should not be relied upon as such.

Maher Digby Securities does not accept any responsibility for the opinions, comments, forward looking statements, and analysis contained in this document, all of which are intended to be of a general nature.

Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs.

We recommend consulting a financial advisor.


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