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How to get started investing later in life

For some people – particularly women – investing may not have been an option until now, constrained by a lack of income while raising children or low incomes leaving nothing to invest once the bills were paid. Others find a new-found need to invest later in life, such as after a separation, inability to work through illness or injury, or the sudden death of their partner. No matter your reason for exploring investing later in life, the following pointers will get you on your way to building financial independence and a comfortable retirement. Update your strategy When was the last time you updated your spending and investment plan (or household budget)? It may have been before the kids left home, your mortgage was paid off, or you began transitioning into part-time retirement. If so, your living costs have changed significantly – work expenses, home energy consumption, groceries etc. Furthermore, your goals, healthcare and lifestyle needs may also have changed. Update your strategy to align with your current goals, values, income and spending habits. Only then will you understand how much you can afford to invest and where to direct those funds. Right-size your superannuation In your later years, super is likely to be front of mind. Ensure this investment works its hardest for you by scrutinising its: • Structure: retail or industry fund? SMSF? Each has its own costs and benefits to contemplate. • Investments: reexamine the types of assets held, level of diversification and risk weighting. • Insurances: do you have adequate life, permanent disability and income protection cover? • Take advantage of superannuation strategies you may not be aware of Unlock home equity The biggest source of money you likely have at this stage of life is equity in your home. This can be used to invest with minimal impact on your everyday finances. In fact, unused equity is effectively dead money (until you sell the property). I always urge caution on reverse mortgages. In theory, they seem like a great way of unlocking equity without saddling you with regular repayments. However, they typically: • accumulate more debt. • have higher interest rates than standard mortgages. • only grant access to a portion of your equity. • can restrict your options to downsize later. • could leave you with no remaining equity when you sell the property or nothing to leave to your benefactors when you pass away. Consider downsizing An alternative to refinancing is downsizing from the family home. As well as unlocking money for investing, you benefit from lower upkeep costs (and cleaning!) on a smaller property and can make a lifestyle change at the same time (moving nearer to family, away from bustling cities, or into supported care if required). Additionally, you may be able to use part of the sale proceeds (up to $300,000) to turbocharge your super with a one-off <a href="https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/how-to-save-more-in-your-super/downsizer-super-contributions" target="_blank" rel="noopener">downsizer contribution</a>. Examine pension impacts Investing can impact your ability to claim the age pension when you retire, and how much you receive. This often comes to bite people who unlock equity in their home to invest, without realising that doing so means the money suddenly counts towards the pension means test. Before doing anything, methodically weigh up which will leave you financially better off – claiming a full or part pension, or self-funding your retirement through investments. Minimise tax Hefty tax bills can easily wipe out any investment returns, making tax a crucial factor in your decision-making. Potential tax considerations to factor into your strategy include: • Determining the most tax-effective ownership structure (e.g. do you invest in your or partner’s name? Through your super? Through a trust or company? • Incorporating stamp duty into purchase costs. • Ensuring there is enough profit from the sale of an investment to cover Capital Gains Tax (CGT) and income tax liabilities before deciding to sell. • Timing a sale to fall within the optimal financial year (e.g. in a year where your taxable income is lower or when relevant tax changes come into effect). Invest in knowledge Later in life, you have fewer working years remaining to recover any losses. Given the far-reaching implications of investing, I highly recommend first speaking to a financial adviser. Many times the fees are paid for in initial tax savings. They can help you maximise your returns, minimise your tax, ensure you don’t inadvertently leave yourself worse off and give you peace of mind. After all, the whole point of investing is to make money. And, without current professional advice, you simply don’t know what you don’t know! Helen Baker is a licensed Australian financial adviser and author of the new book, Money For Life: How to build financial security from firm foundations (Major Street Publishing $32.99). Helen is among the 1% of financial planners who hold a master’s degree in the field. Proceeds from book sales are donated to charities supporting disadvantaged women and children. Find out more at <a href="http://www.onyourowntwofeet.com.au/" target="_blank" rel="noopener">www.onyourowntwofeet.com.au</a> Disclaimer: The information in this article is of a general nature only and does not constitute personal financial or product advice. Any opinions or views expressed are those of the authors and do not represent those of people, institutions or organisations the owner may be associated with in a professional or personal capacity unless explicitly stated. Helen Baker is an authorised representative of BPW Partners Pty Ltd AFSL 548754.

Retirement Income

Could cold sores increase the risk of Alzheimer’s disease?

<div class="theconversation-article-body"> A <a href="https://bmjopen.bmj.com/content/15/5/e093946">new study</a> has found the herpes simplex virus type 1 (HSV-1), which causes cold sores, may be linked to the development of Alzheimer’s disease. This idea is not entirely new. Previous research has suggested there <a href="https://onlinelibrary.wiley.com/doi/10.1002/jmv.1890330403">may be an association</a> between HSV-1 and Alzheimer’s disease, the <a href="https://www.who.int/news-room/fact-sheets/detail/dementia">most common form of dementia</a>. So what can we make of these new findings? And how strong is this link? Let’s take a look at the evidence. <h2>First, what is HSV-1?</h2> HSV-1 is a neurotropic virus, meaning it can infect nerve cells, which send and receive messages to and from the brain. It’s an extremely common virus. The <a href="https://www.who.int/news-room/fact-sheets/detail/herpes-simplex-virus">World Health Organization estimates</a> nearly two-thirds of the global population aged under 50 carries this virus, often unknowingly. An initial infection can cause mild to severe symptoms including fever, headache and muscle aches, and may manifest as blisters and ulcers around the mouth or lips. After this, HSV-1 typically <a href="https://pmc.ncbi.nlm.nih.gov/articles/PMC8923070/">lies dormant</a> in the body’s nervous system, sometimes reactivating due to stress or illness. During reactivation, it can cause symptoms such as cold sores, although in many people it doesn’t cause any symptoms. <h2>What did the new research look at?</h2> In a study published this week <a href="https://bmjopen.bmj.com/content/15/5/e093946">in BMJ Open</a>, researchers analysed data from hundreds of thousands of people drawn from a large United States health insurance dataset. They conducted a matched “case-control” analysis involving more than 340,000 adults aged 50 and older diagnosed with Alzheimer’s disease between 2006 and 2021. Each Alzheimer’s disease patient (a “case”) was matched to a control without a diagnosis of Alzheimer’s disease based on factors such as age, sex and geographic region, a method designed to reduce statistical bias. The team then examined how many of these people had a prior diagnosis of HSV-1 and whether they had been prescribed antiviral treatment for the infection. Among people with Alzheimer’s disease, 0.44% had a previous HSV-1 diagnosis, compared to 0.24% of controls. This translates to an 80% increased relative risk of Alzheimer’s disease in those diagnosed with HSV-1, however the absolute numbers are small. The researchers also found people who received antiviral treatment for HSV-1 had roughly a 17% lower risk of developing Alzheimer’s disease compared to those who were untreated. <h2>Not a new hypothesis</h2> This isn’t the first time researchers have speculated about a viral role in Alzheimer’s disease. <a href="https://onlinelibrary.wiley.com/doi/10.1002/jmv.1890330403">Earlier studies</a> have detected <a href="https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(96)10149-5/abstract">HSV-1 DNA in postmortem brain tissues</a> from people who had Alzheimer’s disease. Laboratory research has also shown <a href="https://doi.org/10.1016/j.neuron.2018.06.030">HSV-1 can trigger amyloid-beta plaque accumulation</a> in nerve cells and mouse brains. Amyloid-beta plaques are one of the defining features of Alzheimer’s disease pathology, so this has led to speculation that reactivation of the virus may contribute to brain inflammation or damage. But importantly, previous research and the current study show associations, not proof HSV-1 causes Alzheimer’s disease. These links do not confirm the virus initiates or drives disease progression. <blockquote class="bluesky-embed" data-bluesky-uri="at://did:plc:f3ph3ymzcnhpchwqiu4u37g2/app.bsky.feed.post/3lpn5axtbvj2i" data-bluesky-cid="bafyreifwdab7rnvdpu6t3vnupdymct77ojzrhjkwxcndc2lo5b4ipjkvee" data-bluesky-embed-color-mode="system"> Got Cold Sores? You Might Be at Higher Risk for Alzheimer’s https://gizmodo.com/got-cold-sores-you-might-be-at-higher-risk-for-alzheimers-2000603873 <a href="https://bsky.app/profile/did:plc:f3ph3ymzcnhpchwqiu4u37g2/post/3lpn5axtbvj2i?ref_src=embed">[image or embed]</a> — Gizmodo (<a href="https://bsky.app/profile/did:plc:f3ph3ymzcnhpchwqiu4u37g2?ref_src=embed">@gizmodo.com</a>) <a href="https://bsky.app/profile/did:plc:f3ph3ymzcnhpchwqiu4u37g2/post/3lpn5axtbvj2i?ref_src=embed">May 21, 2025 at 8:31 AM</a></blockquote> <h2>Some other important caveats</h2> The study relied on insurance claim data, which may not always reflect accurate or timely clinical diagnoses. HSV-1 is also frequently underdiagnosed, especially when symptoms are mild or absent. These points could explain why both the Alzheimer’s group and the control group saw such low rates of HSV-1, when population rates of this virus <a href="https://www.who.int/news-room/fact-sheets/detail/herpes-simplex-virus">are estimated to be far higher</a>. This means many carriers of HSV-1 in the study may have gone unrecorded and therefore makes the link harder to interpret clearly. The dataset also doesn’t capture how often people had recurring symptoms, or the severity or duration of infections – conditions which might influence risk more directly. Another complicating factor is people with HSV-1 might differ in other ways from those without it. Differences in health-care access, the health of a person’s <a href="https://www.thelancet.com/journals/laninf/article/PIIS1473-3099(21)00144-4/fulltext">immune system</a>, <a href="https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(24)01296-0/abstract">lifestyle</a>, <a href="https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(13)60630-3/abstract">genetics</a>, or even <a href="https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(24)01296-0/abstract">education</a> – could all influence Alzheimer’s disease risk. <h2>So should you be concerned if you have cold sores?</h2> The short answer is no – at least not based on current evidence. Most people with HSV-1 will never develop Alzheimer’s disease. The vast majority live with the virus without any serious neurological issues. The “herpes hypothesis” of Alzheimer’s disease is an interesting area for further research, but far from settled science. This study adds weight to the conversation but doesn’t offer a definitive answer. Alzheimer’s disease is a complex condition with <a href="https://www.thelancet.com/commissions-do/dementia-prevention-intervention-and-care">multiple risk factors</a>, including age, genetics, heart health, education, lifestyle and environmental exposures. Infections such as HSV-1 may be one part of a larger, interconnected puzzle, but they are highly unlikely to be the sole cause. With this in mind, the best thing to do is to focus on what we already know can help keep your brain healthy as you age. <a href="https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(25)00184-9/abstract#:%7E:text=Emerging%20evidence%20suggests%20that%20sedentary,impairment%20and%20reduce%20dementia%20risk.">Regular physical activity</a>, <a href="https://www.health.harvard.edu/blog/sleep-well-and-reduce-your-risk-of-dementia-and-death-2021050322508">good quality sleep</a>, <a href="https://www.alzheimers.org.uk/about-dementia/managing-the-risk-of-dementia/reduce-your-risk-of-dementia/social-isolation">social engagement</a>, <a href="https://www.alzheimersresearchuk.org/dementia-information/dementia-risk/diet-and-dementia-risk/">a balanced diet</a> and <a href="https://www.health.harvard.edu/mind-and-mood/protect-your-brain-from-stress">managing stress</a> can all support long-term brain health.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/257140/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> By <a href="https://theconversation.com/profiles/joyce-siette-1377445">Joyce Siette</a>, Associate Professor | Deputy Director, The MARCS Institute for Brain, Behaviour, and Development, <a href="https://theconversation.com/institutions/western-sydney-university-1092">Western Sydney University</a> This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/could-cold-sores-increase-the-risk-of-alzheimers-disease-a-new-study-is-no-cause-for-panic-257140">original article</a>. Image: Gizmodo </div>

Body

Use it or lose it as historic super cap prepares to expire

Jordan Kennedy is a Partner at accounting and advisory firm Pitcher Partners Sydney. Australians could be sitting on a golden opportunity to spur their super savings this year — but if they don’t act fast, they will miss out. That’s because in July they will lose the entitlement to claim any unused superannuation tax concessions from 2019-20, known as the concessional cap. The concessional cap is the total annual amount that can be contributed into super by a person’s employer, through salary sacrifice or claimed as a tax deduction, before the person is charged at the ordinary taxable rate. In other words, for most Australians there is a gap between what they or their employer contribute each year and the total amount they could contribute, taking advantage of tax concessions. In 2019-20, that capped amount was $25,000, and unless people were making or receiving contributions above the superannuation guarantee, they would have needed to earn about $260,000 to hit the cap. If they didn’t, there may still be ‘available’ cap that has built up over the last five years and can be used to access the 15% tax rate on earnings — until July 1, when the cap expires. While this sounds technical, reviewing past superannuation contributions and checking to see that caps have been maxed out is one of the easiest ways to achieve a tax deduction. Of course, there are a few aspects to this strategy that bear consideration. The concession cap system is a use it or lose it play. Any gap between contributions and cap will expire after five years, so this is the last chance to retrospectively boost your superannuation using the 2019-20 cap. That said, as this is the first year we have seen the cap expire, it might have slipped the minds of many. Even if you have maxed out the cap for that year, you should take the opportunity to look at more recent years as well to see if you have been carrying forward an available pool of tax concessions. The second thing to note is that the vast majority of Australians will have a tax cap opportunity available. For anyone on an average salary, the cap gap can grow by $10,000 or more each year, unless additional contributions are made through salary sacrifice or as a tax deduction. The concession is also available for those who might have stopped work to have children or who are reducing their workload approaching retirement. Check with your accountant or your super fund — you might have tens of thousands of dollars in tax concessions available for use. Thirdly, consider your timing. If you know you will have tax capacity in coming years, try to time your use for those years where you have a significant tax event, such as realising capital gains. This can reduce your tax liability without disrupting your other plans. In this case, seeking strategic advice is extremely important to determine the optimal outcome for your circumstances. And finally, recognise there are exceptions. People whose superannuation balance is already over $500,000 are excluded from taking advantage of the cap rollover, but could still benefit from advice on how they should balance their tax liabilities while maximising their superannuation. Whatever your circumstance, speaking to a qualified, independent advisor is the first step to ensure you are working within the complex rules that govern super and taking best advantage of the tax concessions available. But if there is an opportunity to reduce your tax liability for limited effort, you would be mad not to explore your options. Image credits: Shutterstock

Retirement Income

Anthony Albanese's rental income revealed

Anthony Albanese has rented out his luxury home on the NSW Central Coast that he bought for $4 million last year. The Prime Minister updated his official register of interests in January to list for the first time unspecified “rental income” for the clifftop Copacabana retirement home. While his real estate agent declined to reveal how much rent he is charging, online estimators suggested he could ask for $1,000 a week or about $52,000 a year. On top of the Central Coast home, Albanese is now also renting out his Sydney home, a mortgage-free federation bungalow with a pool for $1,350 a week while he lives rent-free at the Lodge. Between the two properties, the prime minster's rental income is around $2,350 a week or $9,400 a month. His annual rental income on top of his salary is an estimated $122,200 and his salary is $564,356 a year. Greens housing spokesman Max Chandler-Mather has previously taken aim at Mr Albanese for owning investment properties as he stepped up his campaign to scrap negative gearing laws. “Let’s be real, if Labor wants to deal with housing affordability then it’s time to phase out the billions of dollars in tax concessions property investors get every year in the form of negative gearing and capital gains tax concessions,” Mr Chandler-Mather said. “We could be investing that money in building public housing but instead it is going to people like the Prime Minister with his three investment properties.” He went on to question why Australia has a “property investor as a prime minister” during the “worst housing crisis we’ve seen in a generation”, adding, “I think what they’ve got to realise on the politics of this in the course of this year a lot of renters are going to start asking the question.” Image credits: realestate.com.au/RICHARD WAINWRIGHT/EPA-EFE/Shutterstock Editorial

Money & Banking

Some ancient Romans got to retire with a pension at 42, but retirement’s changed a bit over the centuries

<div class="theconversation-article-body"> <a href="https://theconversation.com/profiles/anthony-asher-247115">Anthony Asher</a>, <a href="https://theconversation.com/institutions/unsw-sydney-1414">UNSW Sydney</a> Over the ages, there have been broadly three reasons why people have retired. Some are forced to by poor health – theirs or someone they care for. Others have alternative income sources, meaning they don’t rely on a regular pay cheque. And some are made to retire by an employer who wants to overhaul staffing. But where did the idea of retirement come from? And how was it handled in ancient times? <h2>Origins of support</h2> Retirement support – which these days comes in the form of superannuation or a government pension – dates back to ancient history in various forms. Some forms of retirement support were funded by local taxes or tithes, others by donations. Some systems were corrupt and the coverage was patchy. Records are not readily available from other cultures, but we know a little about ancient Rome and English history since then. Emperor Augustus, who ruled after Julius Caesar died, set up a <a href="https://pensionresearchcouncil.wharton.upenn.edu/wp-content/uploads/2020/01/03Chap3.pdf">scheme</a> for Roman soldiers more than 2,000 years ago. The scheme aimed to ensure they retired while still strong and healthy, and would be less likely to cause trouble. The scheme paid a decent amount for soldiers after 25 years of service, so retirement age could be as young as 42. Pensions for older people in need also have ancient origins. The New Testament <a href="https://biblehub.com/1_timothy/5-9.htm">Bible</a> records the churches had schemes for needy widows right from the beginning. In the early Middle Ages, monasteries often provided for the needy, but Henry VIII famously <a href="https://en.wikipedia.org/wiki/Dissolution_of_the_monasteries">closed them</a> and took their assets. A fair share of their assets ended up with <a href="https://en.wikipedia.org/wiki/John_Russell,_1st_Earl_of_Bedford">high government officials</a> after the king’s takeover. Industry funds can also be seen to date back <a href="https://www.britannica.com/money/friendly-society">at least to the Middle Ages</a>, where the trade guilds provided for members and their families who fell on hard times. Retail funds mainly began as <a href="https://www.google.com/search?client=firefox-b-d&q=history+of+life+insurance">mutual life insurance companies</a> that began more than 200 years ago. In the 18th century, the East India Company and the Bank of England began <a href="https://sas-space.sas.ac.uk/9224/1/McIlvenna%20PhD%20final.pdf">offering pensions</a>. These were at first discretionary based on need and loyalty, but later covered all employees. This idea then spread to other larger companies such railways and banks. As modern states developed the capacity to collect income taxes, it became feasible to provide comprehensive retirement benefits funded by central government. Beginning with <a href="https://www.ssa.gov/history/ottob.html">Germany in 1889</a>, developed countries began introducing universal national age pension arrangements. Unfortunately, a number of countries, such as <a href="https://www.uncdf.org/article/8799/governor-innovation-key-to-expanding-insurance-and-pension-coverage-in-png">Papua New Guinea</a>, still do not have the capacity to provide a universal safety net to cover older people. <h2>Retirement in Australia</h2> Three Australian states <a href="https://treasury.gov.au/publication/economic-roundup-centenary-edition-2001/article-3-towards-higher-retirement-incomes-for-australians-a-history-of-the-australian-retirement-income-system-since-federation">began schemes</a> in 1900, and the federal government provided a universal (but means tested) scheme from 1909. Most Australian retirees seem to enjoy a favourable standard of living. The <a href="https://grattan.edu.au/news/5-key-takeaways-from-the-retirement-income-review/">Grattan Institute</a> finds that the poorest 30% are, in fact, better off in retirement. Massive house price and rental inflation in the last 30 years, however, has gutted the living standards of those who don’t own their own homes. This gap in the safety net needs to be addressed. <h2>Retirement ages</h2> The Roman army model persists in some countries to this day: retirement from the US military is available <a href="https://sgp.fas.org/crs/misc/RL34751.pdf">after 20 years</a> of service. Retirement this early is obviously very expensive. The church scheme mentioned in the New Testament had a minimum age of 60, which is still the normal retirement age in many countries. The <a href="https://www.oecd.org/en/publications/2023/12/pensions-at-a-glance-2023_4757bf20.html">OECD</a> reports the average age of retirement in their 38 member countries is just under 64 for women, and just over 64 for men. Australians now qualify for the <a href="https://www.servicesaustralia.gov.au/who-can-get-age-pension?context=22526">age pension</a> at 67, which is slightly older than average. Retirement ages are, however, rising to allow for “population ageing”, a longer life expectancy and lower birth rates. Life expectancy at retirement age is the important number when calculating the cost of pensions. In ancient Rome it was about seven years and was <a href="https://www-cambridge-org.wwwproxy1.library.unsw.edu.au/core/services/aop-cambridge-core/content/view/30ED00A164475432670833C87D2F9E97/S2046164X00000405a.pdf/contributions_to_the_history_of_insurance_and_of_the_theory_of_life_contingencies_with_a_restoration_of_the_grand_pensionary_de_wits_treatise_on_life_annuities_concluded_from_no_vi.pdf">about the same</a> in Sweden in the middle of the 18th century. In Australia, the life expectancy of a 65 year old woman has risen from 12 years in 1895 to <a href="https://aga.gov.au/sites/aga.gov.au/files/2020-07/Australian%20Life%20Tables%202015-17%20v5.pdf">23 years on average</a>. <h2>Earnings-related pensions</h2> The <a href="https://www.ssa.gov/history/ottob.html">1889 German scheme</a> paid a minimum pension, plus an earnings-related component. Workers had a book for stamps for each week’s earnings. The Australian age pension has always just paid a minimum “liveable” amount. This has been subject to different means tests over time, but retirees have been able to supplement it with their own savings. Until 1987, only 40% of Australian employees were covered by employer sponsored schemes. Then in 1992, the <a href="https://www.apra.gov.au/superannuation-australia-a-timeline">Superannuation Guarantee Scheme</a> was introduced. Under this, employers were required to contribute 3% into all exployees’ super. The standard rate will rise to 12% in July next year. <h2>The future</h2> A growing ageing population will mean the Australian government and superannuation industry will need to adjust current support systems. <a href="https://treasury.gov.au/consultation/c2023-441613">Over the next decade</a>, about 2.5 million Australians will move from accumulation (where you’re building up your super) to join the 1.6 million already receiving super benefits. We can expect more people to be living into their nineties and needing pensions for life. One government <a href="https://treasury.gov.au/sites/default/files/2023-12/c2023-441613-dp.docx">priority</a> is to make lifetime pensions as much part of the Australian system as they are in <a href="https://www.mercer.com/en-au/about/newsroom/mercer-cfa-institute-global-pension-index-2024/">the rest of the world</a> And after 30 years of growing complexity in the rules covering superannuation, regulators are <a href="https://www.alrc.gov.au/publication/superannuation-and-the-legislative-framework-for-financial-services-fsl11/">counting the cost</a>, and <a href="https://www.brokernews.com.au/news/breaking-news/asic-targets-regulation-overhaul-286067.aspx">planning some simplification</a>. <hr /> This article is part of The Conversation’s retirement series, in which experts examine issues including how much money we need to retire, retiring with debt, the psychological impact of retiring and the benefits of getting financial advice. Read the rest of the series <a href="https://theconversation.com/au/topics/retirement-series-2024-168372">here</a>.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/241121/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/anthony-asher-247115">Anthony Asher</a>, Associate Professor in the UNSW Business School, <a href="https://theconversation.com/institutions/unsw-sydney-1414">UNSW Sydney</a> Image credits: Shutterstock This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/some-ancient-romans-got-to-retire-with-a-pension-at-42-but-retirements-changed-a-bit-over-the-centuries-241121">original article</a>. </div>

Retirement Income

Superannuation is complicated. A guaranteed government income in retirement would be simpler

<div class="theconversation-article-body"><a href="https://theconversation.com/profiles/brendan-coates-154644">Brendan Coates</a>, <a href="https://theconversation.com/institutions/grattan-institute-1168">Grattan Institute</a> and <a href="https://theconversation.com/profiles/joey-moloney-1334959">Joey Moloney</a>, <a href="https://theconversation.com/institutions/grattan-institute-1168">Grattan Institute</a> Having compulsory super should help create a comfortable and stress-free retirement. But Australia’s super system is too complex for retirees to navigate. This can leave them stressed and lacking the confidence to spend their super savings. Our latest report, <a href="https://grattan.edu.au/report/simpler-s%5Buper/">Simpler super: taking the stress out of retirement</a>, recommends the federal government offer all Australians a lifetime <a href="https://moneysmart.gov.au/retirement-income/annuities">annuity</a> - a financial product that pays a guaranteed income for the rest of their lives. This would help retirees stress less, spend more, and enjoy their retirement years. <h2>Stress prompts many to underspend super</h2> For the first time, many Australians are entering retirement with significant super balances: Australians are retiring with an average super balance of more than A$200,000, and couples with about $300,000. <a href="https://grattan.edu.au/news/balancing-act/">Despite having saved enough to be comfortable</a>, four in five people say planning for retirement is complicated, and 60% don’t think their retirements will be financially stress-free. Few retirees draw down on their retirement savings as intended. In fact, many are actually net savers – their savings continue to grow for decades after they retire. <a href="https://grattan.edu.au/report/simpler-super/">Our analysis</a> of the <a href="https://www.abs.gov.au/participate-survey/household-survey/survey-income-and-housing">ABS Survey of Income and Housing</a> shows for those aged 60-64 in 2003-04, average super balances had grown by 37% in real terms by the time they were aged 76-80 in 2019-20. And their average net wealth, which excludes the equity in their home, grew by 14% over the same period. Australia’s <a href="https://www.apra.gov.au/quarterly-superannuation-performance-statistics-highlights-september-2024">$4 trillion</a> compulsory superannuation system is turning into a massive inheritance scheme. That’s not how super was supposed to work. <h2>Retirees are given too little guidance</h2> The super system makes most big decisions for working Australians, such as how much to contribute or how it’s invested. But once we retire there is little guidance about how to use our funds. More than four in five retirees are steered into account-based pensions. But partly because they’re anxious not to outlive their savings, this group manages their spending very cautiously. While on average, an Australian woman aged 65 today can expect to live until 88, they also have a one-in-five chance of either dying before age 81 or of making it to 94. Half of those retirees who use an account-based pension draw their super at legislated minimum rates, which if followed, leave 65% of super balances unspent by average life expectancy. This widespread use of account-based pensions makes Australia a global outlier. Retirees in most rich countries are automatically given – or otherwise strongly encouraged to choose – <a href="https://www.oecd.org/en/publications/2023/12/pensions-at-a-glance-2023_4757bf20.html">an income guaranteed to last their entire lives</a>. Research suggests having an income that is guaranteed to last until death <a href="https://www.researchgate.net/profile/Keith-Bender/publication/23647866_What_Makes_Retirees_Happy/links/0046353578c678a403000000/What-Makes-Retirees-Happy.pdf">can reduce stress</a> and <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3875802">boost retirees’ spending</a>. <h2>Government could steer retirees into annuities</h2> Our report argues retirees should be encouraged to use 80% of their super balance above $250,000 to purchase an annuity. The government could embed this pre-set guidance throughout the retirement income system. It could be included in all relevant communications with retirees from super funds, and especially at the point of retirement. <a href="https://researchportalplus.anu.edu.au/en/publications/default-and-naive-diversification-heuristics-in-annuity-choice">Research shows</a> that retirees tend to choose the option put in front of them. The remaining super balance – $250,000, plus the remaining 20% of any savings above that level – would continue to be drawn down via an account-based pension. Retirees would still have to access their super for large purchases if needed. Using some super to buy an annuity could boost expected retirement incomes by up to 25%, compared to solely drawing on an account-based pension at legislated minimum rates. And it would ensure that the bulk of retirees’ incomes, irrespective of their super balances, would be guaranteed to last the rest of their lives. <hr /> <iframe id="TYMjG" class="tc-infographic-datawrapper" style="border: 0;" src="https://datawrapper.dwcdn.net/TYMjG/" width="100%" height="400px" frameborder="0" scrolling="no"></iframe> <hr /> <h2>Annuities should be provided by government, not super funds</h2> But steering retirees into annuities offered via super funds is unlikely to work. Super funds <a href="https://www.superreview.com.au/news/superannuation/asfa-urges-against-cipr-longevity-component">have resisted</a> previous attempts by government to <a href="https://consult.treasury.gov.au/development-of-the-framework-for-comprehensive-income-products-for-retirement">require them to offer annuities to retirees</a>. Many people also struggle to understand and compare annuities. They often find it difficult to switch to a better deal later even if they can spot one. Recent <a href="https://www.fca.org.uk/publications/market-studies/retirement-income-market-study">experience in the UK</a> showed when required to purchase an annuity, most people simply took what their fund was offering and often got a poor deal. Designing a regulatory regime that overcomes these issues is a huge challenge. The best option, therefore, is for the government to directly offer annuities. It should offer all retirees a simple lifetime annuity as the baseline option. The government could also offer alternatives including investment-linked annuities, where payments are guaranteed for life, but payments could vary based on investment returns. Priced fairly, and managed by an independent agency, a government annuity would encourage there take-up. Retirees would be more confident that they’re getting a good deal. Annuity payments would be made from the pool of capital created by annuity purchases, with these investments managed by the Future Fund. Under reasonable assumptions we project the government annuity provider could be managing assets totalling 2.5% of GDP by 2040. Superannuation offers Australians the promise of a more comfortable and stress-free retirement. Government-offered annuities can help turn that dream into reality. Esther Suckling made substantial contributions to the research underpinning this article.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/247383/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/brendan-coates-154644">Brendan Coates</a>, Program Director, Housing and Economic Security, <a href="https://theconversation.com/institutions/grattan-institute-1168">Grattan Institute</a> and <a href="https://theconversation.com/profiles/joey-moloney-1334959">Joey Moloney</a>, Deputy Program Director, Housing and Economic Security, <a href="https://theconversation.com/institutions/grattan-institute-1168">Grattan Institute</a> Image credits: Shutterstock This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/superannuation-is-complicated-a-guaranteed-government-income-in-retirement-would-be-simpler-247383">original article</a>. </div>

Money & Banking

Why the royal family is set to receive an eye-watering pay increase

The members of the British royal family are set to receive a record-breaking pay increase, funded by British taxpayers. From April 2025, the amount the royals will receive from the Sovereign Grant - funded by the UK’s public purse – will jump by a whopping £45 million (A$88 million), to £132 million ($260 million). Not everyone is happy about this enormous pay increase, as CEO of Republic Graham Smith said that while the UK remains in the clutches of the cost of living crisis, it is not the time for such a hefty increase to one of the richest families in the world. “This is public money, all of this money comes from the government, at a time when the government is not able to properly fund schools, hospitals police … It is scandalous,” Smith told <a href="https://www.townandcountrymag.com/society/tradition/a63330811/british-royal-family-money-finances-2025/" target="_blank" rel="noopener">Town & Country</a>. “Not only should it not be going up at all, it should be going down.” The increase was first announced last year, with Buckingham Palace officials saying at the time that a huge chunk of that extra cash will be put towards the £369 million ($728 million) bill for long-planned, necessary Palace renovations. The exact amount that is being allocated from this year’s Grant for the work has not been made public. The Grant was established in 2012 in order to help the royal family pay for expenses related to their official duties, with the vast majority usually spent on property maintenance and staffing. When the Grant first came into effect, there were many more working royals which required a larger pool of funding. Now that the royal roster has been stripped back, royal author Richard Palmer believes the public is now “getting less for their money”. He told Town & Country, “I do think that the monarchy in general does a good job for the country and is part of the glue that binds us all together but that doesn’t mean that as an institution, as individuals, they should be able to avoid criticism. They are not above scrutiny.” Image credits: Shutterstock

Money & Banking

Readers response: What has been your approach to reducing or managing debt in retirement?

We asked our readers for their holy grail tips for easing financial strain during retirement years, and the response was overwhelming. Here's what they said. Elaine Ralph - Don’t accumulate debt, live very lightly, and don’t go to see specialists as they cost a fortune. Karen Howson - Pay off every debt and stop spending. John Fowler - We have always budgeted and try to plan for contingencies by allocating for them. We live on our credit card and pay it off when due. My wife has FND so I do all the cooking and keep it simple and cost effective and rarely dine out or eat take away. Our budget has always included allocated "pocket money" for personal spending. Patricia Bennett - Try to be debt free (particularly mortgages) and stick to a budget. Steve Smith - Don't have any, and make sure that you can pay your own way 100%. It's called "cut your coat according to your cloth". If you don't know how to budget then learn - it's never ever too late. Barbara Everall - Stop going out as much as possible avoid the shops. Marie Chong - Make sure you own your own home, before you retire. Angela Chapman - Stop spending on unnecessary things. Naomi Jeffrey - Hope for the best? Image credits: Shutterstock

Retirement Income

Paralympian Dylan Alcott's unexpected career choice

Dylan Alcott has revealed his next career move after retiring from professional wheelchair tennis in 2021. Since his retirement, the 34-year-old Aussie Paralympian has taken on a commentating role and appeared at the 2024 Paris Olympics, but now he has confirmed a new career move that is a big step away from sports. Alcott told Daily Mail Australia that he wants to pursue a career in acting. After taking on his first ever acting role as Marcus in Stan's series Bump, he explained that he wants to get more roles in the film industry. "I'd been on set before as an athlete but not as an actor and I bl**dy loved it, " he told the Daily Mail. "It was a good test to me to see if I loved being on a set every day, and I really did so hopefully I'll have more opportunities soon." Alcott explained that he even took acting lessons and classes, and even hired a coach to make sure he was up to the standard he needed to be. "I didn't want to be that famous guy that just goes 'I can act', I've done lessons and classes and I've got an acting coach," he told the publication. "I tried to do the best that I can and everyone was really accommodating." Alcott, who starred in the fourth season of the show alongside Claudia Karvan and Angus Sampson, recalled how he was able to keep up with his co-stars, despite it being his first time acting. "The biggest challenge was everyone is a really, really good actor and I was like ''what am I doing?'' when I first got there," he recalled. "Then I realised that everyone was so accommodating but I could also hold my own." The Paralympian was fully involved in his role and even created some of his character's jokes, and even does his own stunts. "Often, if you're an able-bodied person writing a disabled character, you're not sure what you can and can't say, but I was like ''no let's push it'' and it was so cool," he said. He added that he was proud to be able to provide positive disability representation on screen, which was something he rarely saw growing up. "[Acting is] something I've wanted to do since I was a kid, I really struggled with disability representation on screen," he shared. "Whenever it was, it was always super negative and sad and not people being themselves. So that's why I started doing acting and when Claudia and Kelsey [Munro] called me with a role, I couldn't believe it!" Alcott will be returning to screens as Marcus in the fifth and final season of Bump on Boxing Day. Image: Allison Voight/ Shutterstock Editorial

Retirement Income

Retiring with debt? Experts explain downsizing, using super for your mortgage, and pension eligibility

<div class="theconversation-article-body"> <a href="https://theconversation.com/profiles/kathleen-walsh-218536">Kathleen Walsh</a>, <a href="https://theconversation.com/institutions/university-of-technology-sydney-936">University of Technology Sydney</a> and <a href="https://theconversation.com/profiles/jemma-briscoe-2234812">Jemma Briscoe</a>, <a href="https://theconversation.com/institutions/university-of-technology-sydney-936">University of Technology Sydney</a> About <a href="https://cepar.edu.au/sites/default/files/cepar-research-brief-housing-ageing-australia.pdf">36%</a> of homeowners still have a mortgage when they retire, up from 23% a decade ago. This increase in mortgage debt is due to soaring property prices, <a href="https://www.mlc.com.au/content/dam/mlc/documents/pdf/retirement/retirement-reports-housing-report.pdf">changes in retirement ages</a> and easy access to <a href="https://www.dss.gov.au/our-responsibilities/seniors/benefits-payments/home-equity-access-scheme">drawdown equity loans</a> (where you use your home as security to get a loan, which can be used to fund travel, medical costs and other expenses). So, what are the options for homeowners who carry debt into retirement? <h2>Option 1: keeping the home and the debt</h2> If you keep the family home in retirement, you get to own a property and can still receive the <a href="https://www.dva.gov.au/get-support/financial-support/income-support/what-changes-your-payments/your-property-or-accommodation/how-owning-home-can-affect-pensions-and-payments">age pension</a>. For example: Jackie has a home worth A$2 million with a $200,000 mortgage. She also has $800,000 in superannuation. She is 67 but is not eligible for the age pension because her <a href="https://moneysmart.gov.au/how-super-works/tax-and-super#:%7E:text=If%20you're%20aged%2060%20or%20over%20and%20withdraw%20a,as%20a%20public%20sector%20fund.">assessable assets</a> – her super – is above the $695,500 cut off. If Jackie takes $200,000 from her super and repays the outstanding mortgage debt, she will save on interest and principal repayments for the next ten years. She will also reduce her assessable assets by $200,000. This makes her eligible for a part pension. So while Jackie has less super, she gets to receive a pension and gets all the subsidies associated with being a pensioner. <h2>Option 2: downsizing to clear the debt</h2> Downsizing can extinguish any remaining debt, and can free up money for holidays, restaurants and the good life in retirement. It also enables a move to a more age-friendly home or apartment. And the government does provide a superannuation incentive via the <a href="https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/how-to-save-more-in-your-super/downsizer-super-contributions">downsizing contribution</a>. This allows homeowners over 55 who have lived in their home for more than ten years to make a one-off contribution of $300,000 (singles) and $600,000 (couples) to their super, using money from the sale of their home. But when a person reaches pension age, currently 67, any money in super will be included in <a href="https://www.servicesaustralia.gov.au/deeming?context=22526">the government’s assessment</a> of your financial assets and income. It could mean you don’t qualify for a pension or pensioner subsidies. Of the approximately 2.6 million who receive a part or full the age pension, only <a href="https://www.ato.gov.au/about-ato/research-and-statistics/in-detail/super-statistics/downsizer-super-contributions-data">78,000 people</a> have taken up this initiative. That begs the question if this option really does create a true financial downsizing incentive. Think again of Jackie, the woman with the $2 million home and the $200,000 in mortgage debt. Say she decides to sell her home and move to a smaller house close to family and friends. This will incur about $40,000 in selling and marketing fees, and stamp duty of around $62,000 on her new $1.4 million apartment. Downsizing leaves her with $1.1 million in financial assets (after transaction costs), which means that Jackie is not eligible for the pension. While she’ll be able to fund a comfortable lifestyle, this decision to downsize may not be as attractive as keeping the house. The decision to sell and move has cost her an extra $100,000 in transaction costs and her pension. So, people need to think carefully about downsizing. It can allow people to move closer to children, grandchildren, and the services they need – but these must be balanced against the financial implications. <h2>What about renters?</h2> Paying market rent while on a fixed income can be very hard, so renting is a challenge for retirees. According to the <a href="https://www.abs.gov.au/statistics/people/housing/housing-census/latest-release">2021 census</a>, women aged 55-64 and those over 65 are among the fastest-growing groups experiencing homelessness. The good news is many profit and not-for-profit retirement communities provide rental models and discounted entry contributions to residents with limited means (but there are often waiting lists). Retirement village residents may also be eligible for <a href="https://guides.dss.gov.au/social-security-guide/4/6/4/30">rent assistance</a> depending on their circumstances. Rent assistance is an extra $5,751 per year in social security benefits and provides extra financial support to <a href="https://guides.dss.gov.au/social-security-guide/5/1/7/10">eligible age pension recipients</a>. Retirement communities provide vulnerable older Australians a unique opportunity to move into a community under a leasehold or licence agreement. More than 260,000 senior Australians live in about <a href="https://www.propertycouncil.com.au/media-releases/retirement-living-construction-leads-wary-market">2,500 retirement communities</a> across the country. While a retirement village may not be the first option for many retirees, they can provide affordable accommodation. <h2>Making the best choice</h2> Navigating housing decisions as you approach retirement means balancing financial, emotional, and lifestyle considerations. Homeowners retiring with a mortgage face a choice: keep their home or downsize to alleviate debt. Keeping the home and accessing super to pay the outstanding debt improves cash flow and allows you to keep your biggest asset. Downsizing helps eliminate debt and boosts the super balance, but comes with extra transaction costs (and you may end up with less pension, or none at all). Seeking professional <a href="https://moneysmart.gov.au/financial-advice/choosing-a-financial-adviser">financial advice</a> is crucial, and ensure they are a registered <a href="https://moneysmart.gov.au/financial-advice/financial-advisers-register">financial advisor</a>.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/240679/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/kathleen-walsh-218536">Kathleen Walsh</a>, Professor of Finance, <a href="https://theconversation.com/institutions/university-of-technology-sydney-936">University of Technology Sydney</a> and <a href="https://theconversation.com/profiles/jemma-briscoe-2234812">Jemma Briscoe</a>, Adjunct lecturer in finance, <a href="https://theconversation.com/institutions/university-of-technology-sydney-936">University of Technology Sydney</a> Image credits: Shutterstock This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/retiring-with-debt-experts-explain-downsizing-using-super-for-your-mortgage-and-pension-eligibility-240679">original article</a>. </div>

Retirement Income

Does menopause hormone therapy increase or decrease your risk of dementia?

<div class="theconversation-article-body"> <figure>By <a style="font-family: -apple-system, BlinkMacSystemFont, 'Segoe UI', Roboto, Oxygen, Ubuntu, Cantarell, 'Open Sans', 'Helvetica Neue', sans-serif;" href="https://theconversation.com/profiles/caroline-gurvich-473295">Caroline Gurvich</a>, <a href="https://theconversation.com/institutions/monash-university-1065">Monash University</a>; <a style="font-family: -apple-system, BlinkMacSystemFont, 'Segoe UI', Roboto, Oxygen, Ubuntu, Cantarell, 'Open Sans', 'Helvetica Neue', sans-serif;" href="https://theconversation.com/profiles/rachel-furey-2274695">Rachel Furey</a>, <a href="https://theconversation.com/institutions/monash-university-1065">Monash University</a>, and <a style="font-family: -apple-system, BlinkMacSystemFont, 'Segoe UI', Roboto, Oxygen, Ubuntu, Cantarell, 'Open Sans', 'Helvetica Neue', sans-serif;" href="https://theconversation.com/profiles/samantha-loi-2274698">Samantha Loi</a>, <a href="https://theconversation.com/institutions/the-university-of-melbourne-722">The University of Melbourne</a></figure> By 2050, <a href="https://www.alzint.org/u/2020/08/GlobalImpactDementia2013.pdf">around 135 million people</a> worldwide will be living with dementia. The most common cause of dementia is Alzheimer’s disease. Women are more likely than men to develop Alzheimer’s disease, even after accounting for women living longer. The symptoms of Alzheimer’s disease most commonly occur after the age of 65. However, changes in the brain begin decades before symptoms start. For women, this typically coincides with their transition to menopause. Menopause results from the body decreasing production of two hormones made by the ovaries: oestrogen and progesterone. These hormonal changes are associated with a wide range of symptoms, including hot flushes, night sweats, difficulties sleeping, reduced libido, mood changes and brain fog. Menopause hormonal therapy (also called hormone replacement therapy or HRT), including oestrogen alone or oestrogen combined with a progesterone, has been prescribed to help with menopausal symptoms for decades. But how does menopause hormone therapy affect the risk of dementia? And why do some studies say the therapy increases the risk, while others say it reduces it? <h2>Hormones and the brain</h2> A large body of pre-clinical (animal based) research shows oestrogen helps protect the brain. It reduces any damage to nerve cells and supports overall brain health. Receptors that respond to oestrogen are in areas of the brain related to reproductive functions. But they’re also in <a href="https://pmc.ncbi.nlm.nih.gov/articles/PMC4491541/">areas of the brain</a> important for learning, memory and higher-order cognitive abilities such as planning, organisation and decision making. <figure class="align-right "><figcaption></figcaption></figure> The loss of the “neuroprotective” effects of oestrogen after menopause is thought to contribute to more cases of Alzheimer’s disease in women than men. <a href="https://pubmed.ncbi.nlm.nih.gov/30928686/">Clinical studies</a> have also shown women who have a medical or surgical menopause before the age of natural menopause have a higher lifelong risk of dementia and cognitive impairment. This risk <a href="https://pubmed.ncbi.nlm.nih.gov/17761551/">appears to be reduced</a> in women who take oestrogen therapy after their surgery. This has led researchers to hypothesise that adding oestrogen back – via menopause hormone therapy – might protect and maintain women’s cognitive health. However, the research findings have not been consistent. <h2>Could menopause hormone therapy impact dementia risk?</h2> Concern about dementia risk and menopause hormone therapy have been partially driven by the unexpected findings from a landmark study conducted more than two decades ago. The <a href="https://jamanetwork.com/journals/jama/fullarticle/198994">findings showed</a> hormone therapy use in post-menopausal women, 65 years and older, was associated with an increased risk for dementia. However, these studies have some key limitations: 1) most of the women were aged over 65 and more than ten years post-menopause 2) the type of oestrogen and progestogen (a synthetic form of progesterone) used may have less benefit on brain health. The most recently published <a href="https://pmc.ncbi.nlm.nih.gov/articles/PMC10625913/">systematic review and meta-analysis</a> of scientific data linking hormone therapy to the risk of Alzheimer’s disease included findings from 51 different reports that were published up to 2023. The results showed if hormone therapy was initiated in midlife, or more generally within ten years of the final menstrual period, there was a decreased risk of later-life Alzheimer’s disease compared to women not using any hormone therapy. The greatest reduction in risk was associated with oestrogen-only hormone therapy. In contrast, when considering using hormone therapy in late-life, or more than ten years after menopause, oestrogen-only therapy had a neutral effects on Alzheimer’s disease risk. However, oestrogen-progestogen therapy was associated with a risk increase. Only <a href="https://journals.plos.org/plosmedicine/article?id=10.1371/journal.pmed.1004435">one clinical trial</a> has been published since this meta-analysis. This study examined the long-term effects of menopause hormone therapy use initiated in early menopause. Women were on average aged 52.8 years and 1.5 years post-menopause when they entered this trial. They were randomly assigned to an oestrogen (with or without progestogen) or placebo for four years. Researchers followed 275 women up ten years later. They found no cognitive effects (no harm nor any benefit) based on whether women were exposed to 48 months of hormone therapy or a placebo. <h2>What affects your risk?</h2> It appears the effects of menopause hormone therapy on dementia risk are influenced by several factors. These include when someone starts taking it, how long they take it for, the type of hormones used, and the person’s genetic and health background. 1. When therapy starts: the critical window hypothesis One key factor in determining the effect of menopause hormone therapy on cognitive function and the risk of dementia appears to be when therapy starts relative to menopause. This is called the “critical window hypothesis”. According to this hypothesis, oestrogen may help protect neurons in the brain only if started early in the menopause transition, particularly within a few years of menopause, when the brain may still be more responsive to hormones. 2. Type of menopause hormone therapy and the role of progesterone The type of hormones included in hormone therapy can <a href="https://pmc.ncbi.nlm.nih.gov/articles/PMC9964432/#sec6-ijms-24-03205">vary widely</a> in their molecular structure as well as their physiological actions. Different types of oestrogens (such as estradiol or conjugated oestrogen) and the inclusion of a progestogen (needed for women who have not undergone a hysterectomy) may have different impacts on brain health and dementia risk. <a href="https://www.sciencedirect.com/science/article/pii/S0091302224000402#s0055">Some studies</a> suggest adding a progestogen to oestrogen therapy could counteract some of the cognitive benefits of oestrogen alone, possibly by blocking oestrogen receptors in the brain. 3. The role of vasomotor symptoms Vasomotor symptoms, such as hot flushes and night sweats, are the hallmark of menopause. Experiencing more vasomotor symptoms has been <a href="https://journals.lww.com/menopausejournal/abstract/2008/15050/objective_hot_flashes_are_negatively_related_to.9.aspx">linked to poorer memory</a> as well as an <a href="https://pubmed.ncbi.nlm.nih.gov/37577812/">increase in biological markers</a> associated with dementia risk. Therefore, one possible pathway by which menopause hormone therapy may moderate Alzheimer’s disease risk is via their effects on reducing vasomotor symptoms. 4. An person’s genetic and health background The greatest genetic risk factor for older-onset Alzheimer’s disease is carrying one or more copies of a specific version of the APOE gene, called APOE e4. There is an <a href="https://pubmed.ncbi.nlm.nih.gov/36218064/">emerging hypothesis</a> that women who have this genetic risk for Alzheimer’s disease may show the greatest benefit from using hormone therapy. <h2>What does this mean for you?</h2> The clinical and scientific community are still debating whether menopause hormone therapy may play a role in Alzheimer’s disease risk. Overall, the decision to use hormone therapy should be individualised, taking into account your age and timing of menopause, health status and specific menopause symptoms. We need more research before we can make clear decisions about the role of hormone therapy and dementia risk, but based on the current evidence, hormone therapy may be beneficial if started early in the menopause transition, particularly for women at genetic risk of Alzheimer’s disease.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/242111/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/caroline-gurvich-473295">Caroline Gurvich</a>, Associate Professor and Clinical Neuropsychologist, <a href="https://theconversation.com/institutions/monash-university-1065">Monash University</a>; <a href="https://theconversation.com/profiles/rachel-furey-2274695">Rachel Furey</a>, Teaching Associate, Neuropsychology, <a href="https://theconversation.com/institutions/monash-university-1065">Monash University</a>, and <a href="https://theconversation.com/profiles/samantha-loi-2274698">Samantha Loi</a>, Associate Professor and Neuropsychiatrist, Department of Psychiatry and Royal Melbourne Hospital, <a href="https://theconversation.com/institutions/the-university-of-melbourne-722">The University of Melbourne</a> This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/does-menopause-hormone-therapy-increase-or-decrease-your-risk-of-dementia-heres-the-science-242111">original article</a>. Image: Shutterstock </div>

Caring

How much do you need to retire? It’s probably a lot less than you think

<div class="theconversation-article-body"> <a href="https://theconversation.com/profiles/brendan-coates-154644">Brendan Coates</a>, <a href="https://theconversation.com/institutions/grattan-institute-1168">Grattan Institute</a> and <a href="https://theconversation.com/profiles/joey-moloney-1334959">Joey Moloney</a>, <a href="https://theconversation.com/institutions/grattan-institute-1168">Grattan Institute</a> How much do you need to save for a comfortable retirement? It’s a big question, and you’ll often hear <a href="https://www.google.com/search?q=australians+not+saving+enough+for+retirement&oq=australians+not+saving+enough+for+retirement&gs_lcrp=EgZjaHJvbWUyBggAEEUYOdIBCDM4MjRqMGo3qAIAsAIA&sourceid=chrome&ie=UTF-8">dire warnings</a> you don’t have enough. But for most Australians, it’s a lot less than you might think. <h2>You spend less in retirement</h2> Australians tend to overestimate how much they need in retirement. Retirees don’t have work-related expenses and have more time to do things for themselves. And retirees, especially pensioners, benefit from discounts on council rates, electricity, medicines, and other benefits worth thousands of dollars a year. While housing <a href="https://grattan.edu.au/news/the-great-australian-nightmare/">is becoming less affordable</a>, most retirees own their own home and have paid it off by the time they retire. Australians who own their home spend an average of 20–25% of their income on housing while working, largely to pay the mortgage. But that falls to just 5% among retiree homeowners, because they are just left with smaller things such as rates and insurance. <figure class="align-center zoomable"><a href="https://images.theconversation.com/files/631962/original/file-20241114-15-9h1dzt.png?ixlib=rb-4.1.0&q=45&auto=format&w=1000&fit=clip"><img src="https://images.theconversation.com/files/631962/original/file-20241114-15-9h1dzt.png?ixlib=rb-4.1.0&q=45&auto=format&w=754&fit=clip" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px" srcset="https://images.theconversation.com/files/631962/original/file-20241114-15-9h1dzt.png?ixlib=rb-4.1.0&q=45&auto=format&w=600&h=337&fit=crop&dpr=1 600w, https://images.theconversation.com/files/631962/original/file-20241114-15-9h1dzt.png?ixlib=rb-4.1.0&q=30&auto=format&w=600&h=337&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/631962/original/file-20241114-15-9h1dzt.png?ixlib=rb-4.1.0&q=15&auto=format&w=600&h=337&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/631962/original/file-20241114-15-9h1dzt.png?ixlib=rb-4.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/631962/original/file-20241114-15-9h1dzt.png?ixlib=rb-4.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/631962/original/file-20241114-15-9h1dzt.png?ixlib=rb-4.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" alt="Notes: Housing costs include mortgage interest and principal repayments and general rates for homeowners, and rental payments for renters. Does not include imputed rent.:" /></a><figcaption>Notes: Housing costs include mortgage interest and principal repayments and general rates for homeowners, and rental payments for renters. Does not include imputed rent. Grattan analysis of ABS (2022) Survey of Income and Housing.</figcaption></figure> And whatever the income you need at the start of your retirement, it typically falls as you age. Retirees tend to spend 15–20% less at age 90 <a href="https://theconversation.com/why-we-should-worry-less-about-retirement-and-leave-super-at-9-5-106237">than they do at age 70</a>, after adjusting for inflation, as their health deteriorates and their discretionary spending falls. Most of their health and aged-care costs <a href="https://grattan.edu.au/report/money-in-retirement/">are covered by government</a>. <h2>So how much superannuation do you need?</h2> Consumer group Super Consumers Australia has crunched the numbers on retiree spending and presents three robust “<a href="https://superconsumers.com.au/journalism/how-much-do-you-need-to-save-for-your-retirement/">budget standards</a>”: <ul> <li>a “low” standard (that is, enough for a person who wants to spend more than what 30% of retirees do)</li> <li>a “medium” standard (spending more than 50% of retirees do), and</li> <li>a “high” standard (more than 70%).</li> </ul> <figure class="align-center zoomable"><a href="https://images.theconversation.com/files/631963/original/file-20241114-19-9h1dzt.png?ixlib=rb-4.1.0&q=45&auto=format&w=1000&fit=clip"><img src="https://images.theconversation.com/files/631963/original/file-20241114-19-9h1dzt.png?ixlib=rb-4.1.0&q=45&auto=format&w=754&fit=clip" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px" srcset="https://images.theconversation.com/files/631963/original/file-20241114-19-9h1dzt.png?ixlib=rb-4.1.0&q=45&auto=format&w=600&h=337&fit=crop&dpr=1 600w, https://images.theconversation.com/files/631963/original/file-20241114-19-9h1dzt.png?ixlib=rb-4.1.0&q=30&auto=format&w=600&h=337&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/631963/original/file-20241114-19-9h1dzt.png?ixlib=rb-4.1.0&q=15&auto=format&w=600&h=337&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/631963/original/file-20241114-19-9h1dzt.png?ixlib=rb-4.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/631963/original/file-20241114-19-9h1dzt.png?ixlib=rb-4.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/631963/original/file-20241114-19-9h1dzt.png?ixlib=rb-4.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" alt="" /></a><figcaption>How much super do you need? Super Consumers Australia (2023) Retirement Savings Targets</figcaption></figure> Crucially, these estimates account for the significant role of the <a href="https://www.servicesaustralia.gov.au/how-much-age-pension-you-can-get?context=22526">Age Pension</a> in the retirement income of many Australians. The <a href="https://www.servicesaustralia.gov.au/how-much-age-pension-you-can-get?context=22526">maximum Age Pension</a> is now A$30,000 a year for singles, and $45,000 a year for couples. To meet Super Consumers Australia’s “medium” retirement standard, a single homeowner needs to have saved only $279,000 in super by age 65 to be able to spend $41,000 a year. A couple needs only $371,000 in super between them to spend $60,000 a year. To meet their “low” standard – which still enables you to spend more than 30% of retirees – single Australians need $76,000 in super at retirement, and couples $95,000 (while also qualifying for a full Age Pension of $30,000 a year). That’s provided that you own your own home (more on that later). <h2>Ignore the super lobby’s estimates</h2> Australians should ignore <a href="https://www.superannuation.asn.au/resources/retirement-standard/">the retirement standards</a> produced by super lobby group the Association of Superannuation Funds of Australia. Their “<a href="https://www.superannuation.asn.au/resources/retirement-standard/">comfortable</a>” standard assumes retirees need an annual income of $52,085 as a single, and $73,337 as a couple. This would require a super balance of $595,000 for a single person, and $690,000 for a couple. But this is a standard of living most Australians don’t have before retirement. It is higher than what 80% of single working Australians, and 70% of couples, <a href="https://insidestory.org.au/the-reassuring-truth-about-retirement-incomes/">spend today</a>. For most Australians, saving enough to meet the super lobby’s “comfortable” standard in retirement can only come by being uncomfortable during their working life. <h2>Most Australians are on track for a comfortable retirement</h2> The good news is most Australians are on track. The federal government’s <a href="https://treasury.gov.au/sites/default/files/2021-02/p2020-100554-udcomplete-report.pdf">2020 Retirement Income Review</a> concludes most future Australian retirees can expect an adequate retirement, replacing a more-than-reasonable share of their pre-retirement earnings – more than the 65–75% benchmark nominated by the review. Even most Australians who work part-time or have broken work histories will hit this benchmark. Most retirees today feel more comfortable financially than younger Australians. And typically, they have enough money to sustain the same, or a higher, living standard in retirement than they had when working. <h2>Rising mortgage debt doesn’t change this story</h2> More Australians are retiring with mortgage debt – about 13% of over-65s had a mortgage in 2019–20, <a href="https://www.ahuri.edu.au/sites/default/files/migration/documents/AHURI_RAP_Issue_176_Housing-equity-withdrawal-in-Australia.pdf">up from 4% in 2002–03</a>. But the government’s <a href="https://treasury.gov.au/sites/default/files/2021-02/p2020-100554-udcomplete-report.pdf">retirement income review</a> found most retirees who used $100,000 of their super to pay off the mortgage when they retire would still have an adequate retirement income. This is, in part, because many would qualify for more Age Pension after using a big chunk of super to pay off the mortgage. And retirees can get a loan via the government’s <a href="https://www.servicesaustralia.gov.au/home-equity-access-scheme">Home Equity Access Scheme</a> to draw equity out of their home up to a maximum value of 150% of the Age Pension, or $45,000 a year, irrespective of how much Age Pension you are eligible for. The outstanding debt accrues with interest, which the government recovers when the property is sold, or from the borrower’s estate when they die, reducing the size of the inheritance that goes to the kids. <h2>But what about renters?</h2> One group of Australians is not on track for a comfortable retirement: those who don’t own a home and must keep paying rent in retirement. Nearly half of retired renters <a href="https://grattan.edu.au/news/repairing-australias-retirement-income-system/">live in poverty today</a>. Most Australians approaching retirement own their own homes today, but fewer will do so in future. Among the poorest 40% of 45–54-year-olds, just 53% own their home today, <a href="https://grattan.edu.au/news/the-great-australian-nightmare/">down from 71% four decades ago</a>. But a single retiree renting a unit for $330 a week – cheaper than 80% of the one-bedroom units across all capital cities – would need an extra $200,000 in super, in addition to Commonwealth Rent Assistance (according to the government’s <a href="https://moneysmart.gov.au/retirement-income/retirement-planner">Money Smart Retirement Planner</a>). This is why raising Commonwealth Rent Assistance to help renting retirees keep a roof over their heads should be an urgent priority for the federal government. Australians have been told for decades that they’re not saving enough for retirement. But the vast majority of retirees today and in future are likely to be financially comfortable.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/243596/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/brendan-coates-154644">Brendan Coates</a>, Program Director, Economic Policy, <a href="https://theconversation.com/institutions/grattan-institute-1168">Grattan Institute</a> and <a href="https://theconversation.com/profiles/joey-moloney-1334959">Joey Moloney</a>, Deputy Program Director, Housing and Economic Security, <a href="https://theconversation.com/institutions/grattan-institute-1168">Grattan Institute</a> Image credits: Shutterstock This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/how-much-do-you-need-to-retire-its-probably-a-lot-less-than-you-think-243596">original article</a>. </div>

Retirement Income

Historic Aged Care Bill passes Parliament

Older Australians will now receive greater support to live at home for longer among other reforms to aged care. On Monday, the Albanese Labor Government's Aged Care Bill passed Parliament, meaning that older Australians and their loved ones will have access to a better quality system. The bill will provide in-home help and improve conditions and protections for those living in aged-care facilities from July, with older people and their loved ones having a greater say about the care and services they receive. These include protections to speak up when they're not satisfied with a service, and better equipping providers to handle complaints more effectively. Around 1.4 million Aussies will receive support for nursing, occupational therapy and day-to-day tasks to help them live independently in their homes by 2035. The new $4.3 billion Support At Home system has been put in place with the hopes of improving home care wait times and will provide for home modifications and assistive technology to help older Australians maintain their independence for longer. The $5.6 billion package will be one of the largest improvements to the sector in 30 years, according to Aged Care Minister Anika Wells. “This act means that people will be the beating heart of a strengthened aged-care sector that replaces fear with trust,” she said. To help fund the cost of care, those not already in aged or home care will have to make contributions for non-clinical care costs, but the amount they pay would depend on their income and assets. The most anyone would pay for these independence and everyday living costs would be e $130,000 after the the lifetime contribution cap was raised from $76,000. The Commonwealth will remain the main funder of aged care. While the government will spend $930 million over the next four years, the new structure will save the budget $12.6 billion over the next 11 years. Image: Shutterstock

Retirement Income

To move or not to move: is it cheaper to find a new place or stay when your rent increases by 10%?

<div class="theconversation-article-body"><a href="https://theconversation.com/profiles/park-thaichon-175182">Park Thaichon</a>, <a href="https://theconversation.com/institutions/university-of-southern-queensland-1069">University of Southern Queensland</a> and <a href="https://theconversation.com/profiles/sara-quach-175976">Sara Quach</a>, <a href="https://theconversation.com/institutions/griffith-university-828">Griffith University</a> Your landlord has just raised your rent by 10% and your mind starts running the numbers – should you cop it sweet or look to move? It’s a familiar scenario in today’s unpredictable housing market. Understanding the real costs of staying versus moving is essential for making informed choices: renters must consider hidden expenses such as moving costs, deposits and changing rental rates, giving them tools to handle rising rent pressures more effectively. <h2>A grim time for many renters</h2> National median market rents have hit record highs, reaching $627 per week, with an average annual growth rate of 9.1% during the past three years, according to real estate giant <a href="https://www.aph.gov.au/About_Parliament/Parliamentary_departments/Parliamentary_Library/Budget/reviews/2024-25/Housing#:%7E:text=Based%20on%20April%202024%20CoreLogic,the%20past%203%20calendar%20years">CoreLogic</a>. <a href="https://www.corelogic.com.au/news-research/news/2024/rent-growth-picked-up-in-the-start-of-2024,-taking-rents-to-new-record-highs">CoreLogic</a> also reported annual rental changes (houses and units) in regional Australia are not far off from the big cities: annual rent changes were 9.4% for combined capital cities, 6.4% for combined regional areas, and 8.5% nationally. So, is it better to stay or move if your rent is raised by 10%? Let’s examine the costs and benefits of each option. <h2>A breakdown of typical moving costs</h2> We’ll start with the most obvious expense: moving costs. Professional moving services aren’t cheap. For example, moving a three-bedroom house in the Gold Coast costs <a href="https://www.muval.com.au/removalists/gold-coast">$1,095.25 on average</a>, with an hourly rate of $158.26. In a bigger city like Melbourne, the cost is slightly higher at <a href="https://www.muval.com.au/removalists/melbourne">about $1,118.46</a>. The moving costs between states or cities will be more expensive if you move further away. You could choose to handle packing yourself and hire some help with a truck – a common option with businesses such as “<a href="https://www.gumtree.com.au/s-removals-storage/gold-coast/2+men+and+a+truck/k0c18643l3006035">Two Men and a Truck</a>”, which typically costs around $100 per hour. Be aware, though, that the hourly rate often starts from the moment the truck leaves the company’s warehouse until it returns. Alternatively, you can rent a van for a lower price, such as $87 for a 24-hour <a href="https://www.bunnings.com.au/for-hire-handivan-24hr-first-100kms-inc-_p5470402">Handivan rental at Bunnings</a>. Don’t forget the cost of moving boxes, too: Bunnings’ 52 litre <a href="https://www.bunnings.com.au/bunnings-52l-light-duty-moving-carton_p0517130?srsltid=AfmBOoqCYAWT0P5apPiJpoOLRAIpUCHNi63ztvIZrG5CxCoNOv45G0TV">moving cartons</a> cost $2.66 each. End-of-lease or <a href="https://firstcallhomeservices.com.au/service-menu/bond-exit-end-lease-cleaning/">bond cleaning</a> is another common expense. For a typical three-bedroom property, internal cleaning can range from $365 to $500. If you have pets, or kids who love drawing on the walls, your cleaning costs might be a bit higher. Now, let’s look at utility connection expenses that can catch people by surprise. Cancelling your internet service can be costly if you don’t meet the exit or cancellation policies. With <a href="https://www.telstra.com.au/internet/5g-home-internet">Telstra Home Internet</a>, for example, if you cancel within the first 24 months, you must return your modem within 21 days to avoid a $400 non-return fee. Most providers charge a cancellation fee or require final device repayments, typically ranging from $100 to $500, depending on the remaining contract period. As a renter, it might be wise to choose a no-lock-in contract plan to avoid these fees if you need flexibility. Electricity and gas connection and disconnection fees are usually minor but can add up, often costing about $40 to $60 for <a href="https://www.energyon.com.au/fees-and-charges/">connection and disconnection fees</a> for electricity alone. If your house uses gas for hot water or cooking, you may have to pay additional fees for setting up service. However, there are also non-financial costs, like the time spent searching for a new home, attending inspections, and putting in applications. Moving takes effort and energy for packing, transporting and unpacking. Some people feel emotionally attached to their current home, which can make leaving harder. Older renters <a href="https://www.sciencedirect.com/science/article/abs/pii/S1353829218311304">seem to draw strength</a> from their familiarity with, attachment to, and enjoyment of their place and community. This is something to be considered. Plus, moving can take <a href="https://www.nature.com/articles/s41537-023-00349-w">an emotional toll</a>. <h2>The benefits of not moving</h2> The clear benefit of staying is avoiding the hassle of relocating. Staying means saving on moving expenses and avoiding the time spent searching for a new place, packing and unpacking. This may also save some people from needing to take time off work. Changing and updating an address is also another tedious task that can be avoided by staying. Moving can hit the hip pocket with “after moving costs” that people may not initially consider. For instance, a new location might mean a longer commute. If each trip adds just 15 extra minutes, that could amount to an additional 11 hours per month over 22 workdays. For drivers, increased fuel and parking expenses might also come into play. Is the current or new location closer to a supermarket, hospital, and school? This proximity could be beneficial or detrimental, depending on the surrounding environment and available services. <h2>To move or not to move?</h2> One point to note is that overall, moving costs are likely to be similar between big cities and regional areas if you get moving supplies or rent a van from a large company such as Bunnings. In the end, moving costs will be around $2,000 based on the figures above, and it can be around $800 to $1,000 cheaper if you opt to rent a van instead of using a full-service moving company. Therefore, if the current rent is $600 per week and is about to increase by 10% to $660, the additional cost would be $3,120 per year. So is it cheaper to move or stay when your rent increases by 10%? The answer is moving may save about $1,000 to $2,000, but comes with the hassle and emotional toll of relocation. Staying will be more expensive, but with less hassle and emotional strain. The right choice depends on your situation.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/243155/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/park-thaichon-175182">Park Thaichon</a>, Associate Professor of Marketing, <a href="https://theconversation.com/institutions/university-of-southern-queensland-1069">University of Southern Queensland</a> and <a href="https://theconversation.com/profiles/sara-quach-175976">Sara Quach</a>, Senior Lecturer in Marketing, <a href="https://theconversation.com/institutions/griffith-university-828">Griffith University</a> Image credits: Shutterstock This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/to-move-or-not-to-move-is-it-cheaper-to-find-a-new-place-or-stay-when-your-rent-increases-by-10-243155">original article</a>. </div>

Money & Banking

How to keep doing good once you’re gone

Most of us like to think that once we are no longer walking the Earth, we can still leave a legacy to mark our time here and contribute positively to those left behind. Doing so is not only possible but, as you’ll see below, fairly straightforward – providing you do some basic preparation beforehand. Seek the help of professional advice to ensure your plans can be enacted in full and deliver the best possible outcomes for everyone involved. Have your affairs in order Make things simpler for your grieving loved ones by having your wishes clearly outlined in writing, with specific instructions that leave no room for misinterpretation. Doing so makes your wishes easier to implement, faster to enact and reduces fights among your beneficiaries. Keep your will and other affairs updated as circumstances change too, so that everyone you want is included (such as kids and grandkids) and those you don’t, aren’t given an unexpected windfall (such as your ex or an adult child’s ex). Provide for everyone Providing for everyone is not necessarily straight forward, especially if you have a blended family. For instance, leaving your share of your home to your children from a previous relationship could lead to disagreements if your partner doesn’t want to leave. Instead, think about how your assets can be divided fairly without disadvantaging anyone. Children could be nominated beneficiaries of your superannuation and/or life insurance, leaving your home for your partner. Keep wealth flowing Certain structures can allow you to keep giving to your descendants long after you’re gone – offsetting their income and providing far greater wealth over time than any lump sum could achieve. A family or testamentary trust allows ongoing wealth creation through shared assets, with regular dividends paid out, creating a family legacy that can last for generations. Or a family company can allow a commercial entity to continue trading and growing as an asset. Manage tax impacts Implement tax-effective strategies that maximise how much your beneficiaries actually receive and minimise what the tax man pockets. While there isn’t an inheritance tax per se, beneficiaries can be hit with Capital Gains Tax (CGT) on asset sales plus transfer costs to put an asset into their own name – not to mention the ongoing maintenance and compliance costs of asset ownership. In some instances, your loved ones may benefit more if you sell assets now and leave them the proceeds, rather than leave them the asset – and its associated tax bill – once you’re gone. Ensure loved ones are home and housed Property is perhaps the biggest of all sources of wealth, yet it is increasingly difficult for younger people and singles to get (and stay) on the property ladder. Ensure everyone can reap the benefits of property ownership over their own lifetime, either by transferring ownership of properties in your name or contributing chunks of cash towards a deposit. However, it’s important to do so sustainably – gifting grandkids a large property they can’t afford to maintain isn’t going to work. Charitable donations Many people like to support charities and social causes once they are gone. Consider the end user here and what they stand to benefit from your donation – whether it be people, planet or both. It could be leaving a lump sum on your death, or regular ongoing donations from your estate. You may wish to do so anonymously, or include a message with your donation outlining your reasons why that particular charity/cause is important to you and what you hope the money will go towards. Donations may not necessarily be financial either – perhaps you have a valuable historic artefact that others could enjoy if donated to a museum? Organ donation The greatest gift of all is not money but life itself. So, consider whether organ donation is something you wish to do. While not suitable for everyone, and dependent on a range of factors including your age, health and religious beliefs, a single organ donor can save up to seven lives, as well as improve the quality of life of numerous others through eye and tissue donation. That is a lot of life you can give to others – and all without costing your own loved ones a cent! Helen Baker is a licensed Australian financial adviser and author of On Your Own Two Feet: The Essential Guide to Financial Independence for all Women. Helen is among the 1% of financial planners who hold a master’s degree in the field. Proceeds from book sales are donated to charities supporting disadvantaged women and children. Find out more at <a href="http://www.onyourowntwofeet.com.au/">www.onyourowntwofeet.com.au</a> Disclaimer: The information in this article is of a general nature only and does not constitute personal financial or product advice. Any opinions or views expressed are those of the authors and do not represent those of people, institutions or organisations the owner may be associated with in a professional or personal capacity unless explicitly stated. Helen Baker is an authorised representative of BPW Partners Pty Ltd AFSL 548754. Image credits: Shutterstock

Retirement Income

Is it worth selling my house if I’m going into aged care?

<div class="theconversation-article-body"><a href="https://theconversation.com/profiles/colin-zhang-1234147">Colin Zhang</a>, <a href="https://theconversation.com/institutions/macquarie-university-1174">Macquarie University</a> For senior Australians who cannot live independently at home, residential aged care can provide accommodation, personal care and general health care. People usually think this is expensive. And many assume they need to sell their home to pay for a lump-sum deposit. But that’s not necessarily the case. Here’s what you need to consider. <h2>You may get some financial support</h2> Fees for residential aged care are complex and can be confusing. Some are for your daily care, some are means-tested, some are for your accommodation and some pay for extras, such as cable TV. But it’s easier to think of these fees as falling into two categories: <ul> <li> an “entry deposit”, which is usually more than <a href="https://www.health.gov.au/sites/default/files/documents/2020/06/eighth-report-on-the-funding-and-financing-of-the-aged-care-industry-july-2020-eighth-report-on-the-funding-and-financing-of-the-aged-care-industry-may-2020.pdf">$A300,000</a>, and is refunded when you leave aged care </li> <li> daily “<a href="https://www.myagedcare.gov.au/aged-care-home-costs-and-fees">ongoing fees</a>”, which are $52.71-$300 a day, or more. These cover the basic daily fee, which everyone pays, and the means-tested care fee. </li> </ul> To find out how much government support you’ll receive for both these categories, you will have a “<a href="https://www.myagedcare.gov.au/income-and-means-assessments/#aged-care-home">means test</a>” to assess your income and assets. This means test is similar (but different) to the means test for the aged pension. Generally speaking, the lower your aged-care means test amount, the more government support you’ll receive for aged care. With full support, you don’t need to pay an “entry deposit”. But you still need to pay the basic daily fee (currently, <a href="https://www.myagedcare.gov.au/aged-care-home-costs-and-fees">$52.71</a> a day), equivalent to 85% of your aged pension. If you get partial support, you pay less for your “entry deposit” and ongoing fees. <h2>You don’t need a lump sum</h2> You don’t have to pay for your “entry deposit” as a lump sum. You can choose to pay a rental-style daily cost instead. This is calculated as follows: you multiply the amount of the required “entry deposit” by the maximum permissible interest rate. This rate is set by government and is currently at <a href="https://www.health.gov.au/sites/default/files/documents/2021/03/schedule-of-fees-and-charges-for-residential-and-home-care-schedule-from-20-march-2021_0.pdf">4.01%</a> per year for new residents. Then you divide that sum by 365 to give a daily rate. This option is like borrowing money to pay for your “entry deposit” via an interest-only loan. You can also pay for your “entry deposit” with a combination of a lump sum and a daily rental cost. As it’s not compulsory to pay a lump sum for your “entry deposit”, you have different options for dealing with your family home. <h2>Option 1: keep your house and rent it out</h2> This allows you to use the rental-style daily cost to finance your “entry deposit”. Pros <ul> <li> you could have more income from rent. This can help pay for the rental-style daily cost and “ongoing fees” of aged care </li> <li> you might have a special sentimental attachment to your family house. So keeping it might be a less confronting option </li> <li> keeping an expensive family house will not heavily impact your residential aged care cost. That’s because any value of your family house above <a href="https://www.health.gov.au/sites/default/files/documents/2021/03/schedule-of-fees-and-charges-for-residential-and-home-care-schedule-from-20-march-2021_0.pdf">$173,075.20</a> will be excluded from your <a href="https://www.servicesaustralia.gov.au/organisations/health-professionals/services/aged-care-entry-requirements-providers/residential-care/residential-aged-care-means-assessment">means test</a> </li> <li> you can still access the capital gains of your house, as house prices rise. </li> </ul> Cons <ul> <li> your rental income needs to be included in the means test for your aged pension. So you might get less aged pension </li> <li> you might need to pay income tax on the rental income </li> <li> compared to the lump sum payment, choosing the rental-style daily cost means you will end up <a href="https://www.smh.com.au/money/super-and-retirement/seek-help-when-weighing-up-how-to-pay-for-your-aged-care-20191202-p53g16.html">paying more</a> </li> <li> you are subject to a changing rental market. </li> </ul> <h2>Option 2: keep your house and rent it out, with a twist</h2> If you have some savings, you can use a combination of a lump sum and daily rental cost to pay for your “entry deposit”. Pros <ul> <li> like option 1, you can keep your house and have a steady income </li> <li> the amount of lump sum deposit will not be counted as an asset in the pension means test. </li> </ul> Cons <ul> <li> like option 1, you could have less pension income, higher age-care costs and need to pay more income tax </li> <li> you have less liquid assets (assets you could quickly sell or access), which could be handy in an emergency. </li> </ul> <h2>Option 3: sell your house</h2> If you sell your house, you can use all or part of the proceeds to pay for your “entry deposit”. Pros <ul> <li> if you have any money left over after selling your house and paying for your “entry deposit”, you can invest the rest </li> <li> as your “entry deposit” is exempt from your aged pension means test, it means more pension income. </li> </ul> Cons <ul> <li>if you have money left over after selling your house, this will be included in the aged-care means test. So you can end up with less financial support for aged care.</li> </ul> <h2>In a nutshell</h2> Keeping your house and renting it out (option 1 or 2) can give you a better income stream, which you can use to cover other living costs. And if you’re not concerned about having access to liquid assets in an emergency, option 2 can be better for you than option 1. But selling your house (option 3) avoids you being exposed to a changing rental market, particularly if the economy is going into recession. It also gives you more capital, and you don’t need to pay a rental-style daily cost. <hr /> This article is general in nature, and should not be considered financial advice. For advice tailored to your individual situation and your personal finances, please see a qualified financial planner. Correction: this article previously stated the amount of lump sum deposit will not be counted as an asset in the aged-care means test, as a pro of option 2. In fact, the amount of lump sum deposit will not be counted as an asset in the pension means test.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/161674/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/colin-zhang-1234147">Colin Zhang</a>, Lecturer, Department of Actuarial Studies and Business Analytics, <a href="https://theconversation.com/institutions/macquarie-university-1174">Macquarie University</a> Image credits: Shutterstock This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/is-it-worth-selling-my-house-if-im-going-into-aged-care-161674">original article</a>. </div>

Retirement Income

Old grocery receipt highlights extortionate increase at supermarkets

An old Woolworths receipt from 2021 has revealed the grim reality of increased grocery prices, and how inflation has crippled many in just a few short years. A social media user on X, formerly Twitter, shared her receipt from a Melbourne Woolworths as she highlighted how much more common household items cost today. She said it showed how Aussies were shelling out for costs that appear to have moved well past official inflation levels, which rose to 3.8 per cent by the end of June. “We all knew we’re being ripped off! Australians are now paying up to 200% more for basic grocery items than they were a few years ago!” she wrote. “Oh but inflations (sic) currently back at around 3.8% … yeah my ass it is!!” <blockquote class="twitter-tweet"> Found an old Woolworths receipt circa 2021. We all knew we re being ripped off! Australians are now paying up to 200% more for basic grocery items than they were a few years ago! Oh but inflations currently back at around 3.8% … yeh my ass it is!! Pink Lady Apply $2.90kg… <a href="https://t.co/9OPS6SnOqI">pic.twitter.com/9OPS6SnOqI</a> — Miss Madeleine (@MadsMelbourne) <a href="https://twitter.com/MadsMelbourne/status/1832282784431534448?ref_src=twsrc%5Etfw">September 7, 2024</a></blockquote> Her docket shows how everyday items like coffee grounds, potato chips and stain removers have skyrocketed in price. In the receipt items such as a 250g packet of Bega cheese is priced at $4.50 – it’s now $6 for the same item, discounted from $7.50 according to online pricing. Deli fresh Champagne leg ham sold for $2.50 for 100g according to the receipt, while current prices put that at $4.20. Ozkleen prewash power stain remover is now currently listed as $7 for a 500ml bottle, more than 200 per cent higher than the $2.75 it sold for three years ago. The woman also posted another smaller receipt from the same year, in which she bought grapes and a watermelon. In addition to sharing the image, she wrote, "Another one to add! No wonder Australia is having a cost of living crises! Woolworths Receipt circa 2021. Grapes were $3.50kg, now $14.16 = 304% increase. Watermelon was $1.50 now $6.38kg = 325% increase." Grocery prices have come under the spotlight amid the cost-of-living crisis, with the Australian Consumer and Competition Commission tasked with probing the sector. “We know grocery prices have become a major concern for the millions of Australians experiencing cost of living pressures,” ACCC chair Gina Cass-Gottlieb said in January. “When it comes to fresh produce, we understand that many farmers are concerned about weak correlation between the price they receive for their produce and the price consumers pay at the checkout.” Coles and Woolworths have defended the price rises as being pushed by supply chain struggles, while both companies posted profits of more than $1 billion in the last financial year. A spokesperson for Woolworths also released a statement saying "Ongoing economy-wide inflation means it costs more for many supermarket suppliers to manufacture their products than it did a few years ago. "We remain focussed on delivering lower prices where we can, with our average prices coming down in the last six months, and thousands of specials every week. "The price of fruit and vegetables can vary throughout the year due to weather, seasonality, supply and demand. For example, Haas avocados are currently not in season." Image credits: X / Shutterstock

Money & Banking

Does intermittent fasting increase or decrease our risk of cancer?

<div class="theconversation-article-body"><a href="https://theconversation.com/profiles/amali-cooray-1482458">Amali Cooray</a>, <a href="https://theconversation.com/institutions/wehi-walter-and-eliza-hall-institute-of-medical-research-822">WEHI (Walter and Eliza Hall Institute of Medical Research) </a> Research over the years has suggested intermittent fasting has the potential to improve our health and <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3946160/">reduce the likelihood</a> of developing cancer. So what should we make of a <a href="https://www.nature.com/articles/s41586-024-07840-z">new study</a> in mice suggesting fasting increases the risk of cancer? <h2>What is intermittent fasting?</h2> Intermittent fasting means switching between times of eating and not eating. Unlike traditional diets that focus on what to eat, this approach focuses on when to eat. There are lots of commonly used <a href="https://dietitiansaustralia.org.au/health-advice/intermittent-fasting">intermittent fasting schedules</a>. The 16/8 plan means you only eat within an eight-hour window, then fast for the remaining 16 hours. Another popular option is the 5:2 diet, where you eat normally for five days then restrict calories for two days. In Australia, poor diet contributes to <a href="https://www.health.gov.au/topics/food-and-nutrition/what-were-doing">7% of all cases of disease</a>, including coronary heart disease, stroke, type 2 diabetes, and cancers of the bowel and lung. Globally, poor diet is linked to <a href="https://www.thelancet.com/article/S0140-6736(19)30041-8/fulltext">22% of deaths</a> in adults over the age of 25. Intermittent fasting has gained a lot of attention in recent years for its potential health benefits. Fasting <a href="https://www.betterhealth.vic.gov.au/health/conditionsandtreatments/metabolism">influences metabolism</a>, which is how your body processes food and energy. It can affect how the body absorbs nutrients from food and burns energy from sugar and fat. <h2>What did the new study find?</h2> The <a href="https://www.nature.com/articles/s41586-024-07840-z">new study</a>, published in Nature, found when mice ate again after fasting, their <a href="https://www.nature.com/articles/s12276-024-01179-1">gut stem cells</a>, which help repair the intestine, became more active. The stem cells were better at regenerating compared with those of mice who were either totally fasting or eating normally. This suggests the body might be better at healing itself when eating after fasting. However, this could also have a downside. If there are <a href="https://www.cancer.gov/about-cancer/causes-prevention/genetics/genetic-changes-infographic">genetic mutations</a> present, the burst of stem cell-driven regeneration after eating again might make it easier for cancer to develop. <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4027058/">Polyamines</a> – small molecules important for cell growth – drive this regeneration after refeeding. These polyamines can be produced by the body, influenced by diet, or come from gut bacteria. The findings suggest that while fasting and refeeding can improve stem cell function and regeneration, there might be a tradeoff with an increased risk of cancer, especially if fasting and refeeding cycles are repeated over time. While this has been shown in mice, the link between intermittent fasting and cancer risk in humans is more complicated and not yet fully understood. <h2>What has other research found?</h2> <a href="https://www.annualreviews.org/content/journals/10.1146/annurev-nutr-071816-064634">Studies in animals</a> have found intermittent fasting can help with weight loss, improve blood pressure and blood sugar levels, and subsequently <a href="https://pubmed.ncbi.nlm.nih.gov/27810402/">reduce the risks</a> of diabetes and heart disease. Research in humans <a href="https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2811116">suggests</a> intermittent fasting can reduce body weight, improve <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9361187/">metabolic health</a>, reduce inflammation, and enhance <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3946160/">cellular repair processes</a>, which remove damaged cells that could potentially turn cancerous. However, other studies warn that the benefits of intermittent fasting are the same as what can be achieved through <a href="https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2623528">calorie restriction</a>, and that there <a href="https://www.sciencedirect.com/science/article/pii/S2161831322007542">isn’t enough evidence</a> to confirm it reduces cancer risk in humans. <h2>What about in people with cancer?</h2> In studies of people who have cancer, fasting has been <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2815756/">reported to</a> protect against the side effects of chemotherapy and <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7311547/">improve the effectiveness</a> of cancer treatments, while decreasing damage to healthy cells. Prolonged fasting in some patients who have cancer has been shown to be safe and <a href="https://pubmed.ncbi.nlm.nih.gov/34383300/">may potentially</a> be able to decrease tumour growth. On the other hand, some experts advise caution. Studies in mice show intermittent fasting could <a href="https://www.nature.com/articles/s41423-023-01033-w">weaken the immune system</a> and make the body less able to fight infection, potentially leading to worse health outcomes in people who are unwell. However, there is <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8757987/">currently no evidence</a> that fasting increases the risk of bacterial infections in humans. <h2>So is it OK to try intermittent fasting?</h2> The current view on intermittent fasting is that it can be beneficial, but experts agree more research is needed. Short-term benefits such as weight loss and better overall health are well supported. But we don’t fully understand the long-term effects, especially when it comes to cancer risk and other immune-related issues. Since there are many different methods of intermittent fasting and people react to them differently, it’s hard to <a href="https://www.nature.com/articles/s41423-023-01033-w">give advice that works for everyone</a>. And because most people who participated in the studies were overweight, or had diabetes or other health problems, we don’t know how the results apply to the broader population. For healthy people, intermittent fasting is generally considered safe. But it’s <a href="https://dietitiansaustralia.org.au/health-advice/intermittent-fasting">not suitable for everyone</a>, particularly those with certain medical conditions, pregnant or breastfeeding women, and people with a history of eating disorders. So consult your health-care provider before starting any fasting program.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/238071/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/amali-cooray-1482458">Amali Cooray</a>, PhD Candidate in Genetic Engineering and Cancer, <a href="https://theconversation.com/institutions/wehi-walter-and-eliza-hall-institute-of-medical-research-822">WEHI (Walter and Eliza Hall Institute of Medical Research)</a> Image credits: Shutterstock This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/does-intermittent-fasting-increase-or-decrease-our-risk-of-cancer-238071">original article</a>. </div>

Body

The biggest faux pas for self-funded retirees

Whether you have been retired for some time or are still looking forward to the time you can step back, chances are there are important considerations you may have overlooked. From planning and pensions to family and housing, these are the biggest self-funded retirement mistakes I come across, and some insights into how to avoid repeating them: <ol> <li>Lack of a plan</li> </ol> Not having a retirement plan is perhaps the most basic faux pas, but often the most costly. A detailed plan should cover things like: <ul> <li>When you AND your partner will retire </li> <li>Where you will live (you may want to downsize, relocate, seek assisted living)</li> <li>Anticipated living costs (living situation, health, lifestyle)</li> <li>How you will spend your time (hobbies, travel, volunteering, time with family)</li> <li>Strategies to maximise investments and superannuation</li> <li>Tax minimisation strategies</li> </ul> Remember: failing to plan = planning to fail. <ol start="2"> <li>Poor planning</li> </ol> Having a plan is the starting point, but it won’t get you far if it’s incomplete, not updated as circumstances change, or omits critical factors. For couples, not considering age differences is a big mistake. One partner retiring before the other can have big shifts on financial and tax dynamics and even the relationship itself. Then there is end-of-life care, particularly if the younger partner is still working. Not building in a safety buffer is another no-no. Too many retirees have been caught out by the high inflation of recent years, having calculated their anticipated income needs on much lower living costs. Balance short-term and long-term goals: being overly conservative early on can limit your financial situation down the track. And no plan is complete without contingencies for worst case scenarios – insurances, protections, back-up options. <ol start="3"> <li>Insecure housing </li> </ol> Government data has long shown major differences in quality of life for retirees who own their home versus those who don’t. Homelessness or insecure housing, the mercy of the rental market, and inability to customise your home as you age or if you need specialised support with disability or health issues are some of the challenges renters face. Furthermore, public estimates of how much the average Australian needs to retire typically assume home ownership – meaning rent is not part of that calculation. That’s a huge living cost you may not have factored into your retirement planning. <ol start="4"> <li>Unclaimed pensions</li> </ol> Contrary to popular belief, self-funded retirement and claiming a pension are not mutually exclusive. You may be eligible for a part-pension, calculated pro-rata according to the value of your assets and other income. Claiming a part-pension, no matter how small it may be, reduces how much income you need to draw down from super – making it last longer. Don’t fall into another common trap when applying – overestimating your assets. It’s easy to assume your non-monetary assets are worth more than what they really are, reducing how much pension you receive or negating your eligibility altogether. <ol start="5"> <li>Depleted Bank of Mum and Dad</li> </ol> With home ownership increasingly out of reach for younger adults, the Bank of Mum and Dad is often sought to bridge the gap. How you do so will impact your own situation. Giving more than you can afford can leave you overstretched. Missed loan repayments could see you fall behind on your own bills. Not putting agreements in writing can lead to disputes down the track. Having a loan guarantee called in could see you homeless. Be wise about decisions you make here and don’t let heartstrings cloud your judgement. <ol start="6"> <li>Suffering in silence</li> </ol> Elder abuse is a sad but significant problem. Given they have money in the bank, self-funded retirees are often the most vulnerable. Its effects can be far-reaching, impacting your mental and physical health, financial wellbeing, social interactions, and quality of life. Be aware of <a href="https://www.oversixty.com.au/finance/retirement-income/are-you-a-victim-of-elder-abuse-without-even-realising-it">the signs that something isn’t right</a>. If you recognise it happening to you – or someone you know – speak up and seek help. <ol start="7"> <li>Forgoing professional advice</li> </ol> How much of the above details did you already know? Chances are, not all of them. And that’s just the tip of the iceberg. Money is a complicated business and you simply don’t know what you don’t know, which is why seeking independent, tailored advice from a professional is so important. A good financial advisor can help you identify new opportunities and manage risks you may not have considered, limit expenses and also work with your accountant to minimise your tax. Helen Baker is a licensed Australian financial adviser and author of On Your Own Two Feet: The Essential Guide to Financial Independence for all Women. Helen is among the 1% of financial planners who hold a master’s degree in the field. Proceeds from book sales are donated to charities supporting disadvantaged women and children. Find out more at <a href="http://www.onyourowntwofeet.com.au/">www.onyourowntwofeet.com.au</a> Disclaimer: The information in this article is of a general nature only and does not constitute personal financial or product advice. Any opinions or views expressed are those of the authors and do not represent those of people, institutions or organisations the owner may be associated with in a professional or personal capacity unless explicitly stated. Helen Baker is an authorised representative of BPW Partners Pty Ltd AFSL 548754. Image credits: Shutterstock

Retirement Income

Retirement doesn’t just raise financial concerns – it can also mean feeling unmoored and irrelevant

<div class="theconversation-article-body"><a href="https://theconversation.com/profiles/marianne-janack-681018">Marianne Janack</a>, <a href="https://theconversation.com/institutions/hamilton-college-2966">Hamilton College</a> Most discussions of retirement focus on the financial aspects of leaving the workforce: “<a href="https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/publications/top-10-ways-to-prepare-for-retirement.pdf">How to save enough for retirement</a>” or “<a href="https://www.businessinsider.com/personal-finance/investing/when-can-i-retire">How do you know if you have enough money for retirement</a>?” But this might not be the biggest problem that potential retirees face. The deeper issues of meaning, relevance and identity that retirement can bring to the fore are more significant to some workers. Work has <a href="https://www.theatlantic.com/ideas/archive/2023/03/work-revolution-ai-wfh-new-book/673572/">become central to the modern American identity</a>, as <a href="https://www.theatlantic.com/atlantic-editions/">journalist Derek Thompson bemoans</a> in The Atlantic. And some theorists have argued that work shapes what we are. For most people, as business ethicist <a href="https://www.luc.edu/quinlan/faculty/algini.shtml#:%7E:text=About,the%20Society%20for%20Business%20Ethics.">Al Gini</a> argues, one’s work – which is usually also one’s job – <a href="https://doi.org/10.4324/9780203950555">means more than a paycheck</a>. Work can structure our friendships, our understandings of ourselves and others, our ideas about free time, our forms of entertainment – indeed our lives. I <a href="https://www.hamilton.edu/academics/our-faculty/directory/faculty-detail/marianne-janack">teach a philosophy course about the self</a>, and I find that most of my students think of the problems of identity without thinking about how a job will make them into a particular kind of person. They think mostly about the prestige and pay that come with certain jobs, or about where jobs are located. But when we get to <a href="https://plato.stanford.edu/entries/existentialism/">existentialist philosophers</a> such as <a href="https://plato.stanford.edu/entries/sartre/">Jean-Paul Sartre</a> and <a href="https://plato.stanford.edu/entries/beauvoir/">Simone de Beauvoir</a>, I often urge them to think about what it means to say, as the existentialists do, <a href="https://philosophynow.org/issues/115/On_Being_An_Existentialist">that “you are what you do</a>.” How you spend 40 years of your life, I tell them, for at least 40 hours each week – the time many people spend at their jobs – is not just a financial decision. And I have come to see that retirement isn’t just a financial decision, either, as I consider that next phase of my life. <h2>Usefulness, tools and freedom</h2> For Greek and Roman philosophers, <a href="https://search.worldcat.org/title/Work-what-it-has-meant-to-men-through-the-ages/oclc/780872063">leisure was more noble than work</a>. The life of the craftsperson, artisan – or even that of the university professor or the lawyer – was to be avoided if wealth made that possible. The good life was a life not driven by the necessity of producing goods or making money. Work, Aristotle thought, was an obstacle to the achievement of the particular forms of excellence characteristic of human life, like thought, contemplation and study – <a href="https://classics.mit.edu/Aristotle/nicomachaen.7.vii.html">activities that express</a> the <a href="https://classics.mit.edu/Aristotle/nicomachaen.8.viii.html">particular character of human beings</a> and are done for their own sake. And so, one might surmise, retirement would be something that would allow people the kind of leisure that is essential to human excellence. But contemporary retirement does not seem to encourage leisure devoted to developing human excellence, partly because it follows a long period of making oneself into an object – something that is not free. German philosopher Immanuel Kant distinguished between the value of objects and of subjects by the idea of “use.” Objects are not free: They are meant to be used, like tools – their value is tied to their usefulness. But rational beings like humans, who are subjects, are more than their use value – <a href="https://search.worldcat.org/title/5796114">they are valuable in their own right</a>, unlike tools. And yet, much of contemporary work culture encourages workers to think of themselves and their value <a href="https://www.simonandschuster.com/books/Bullshit-Jobs/David-Graeber/9781501143335">in terms of their use value</a>, a change that would have made both Kant and the ancient Greek and Roman philosophers wonder why people didn’t retire as soon as they could. <h2>‘What we do is what we are’</h2> But as one of my colleagues said when I asked him about retirement: “If I’m not a college professor, then what am I?” Another friend, who retired at 59, told me that she does not like to describe herself as retired, even though she is. “Retired implies useless,” she said. So retiring is not just giving up a way of making money; it is a deeply existential issue, one that challenges one’s idea of oneself, one’s place in the world, and one’s usefulness. One might want to say, with Kant and the ancients, that those of us who have tangled up our identities with our jobs have made ourselves into tools, and we should throw off our shackles by retiring as soon as possible. And perhaps from the outside perspective, that’s true. But from the participant perspective, it’s harder to resist the ways in which what we have done has made us what we are. Rather than worry about our finances, we should worry, as we think about retirement, more about what the good life for creatures like us – those who are now free from our jobs – should be.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/233963/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/marianne-janack-681018">Marianne Janack</a>, John Stewart Kennedy Professor of Philosophy, <a href="https://theconversation.com/institutions/hamilton-college-2966">Hamilton College</a> Image credits: Shutterstock This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/retirement-doesnt-just-raise-financial-concerns-it-can-also-mean-feeling-unmoored-and-irrelevant-233963">original article</a>. </div>

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