Set for Life?
Hi, I’m Lynette, a Relationship Manager for Premium Finance. I have had several clients come in to our office lately who say they are “Set for Life”. I immediately assumed they had won on the scratchies. No, apparently what they mean is that they have now paid off their home and all will be rosy for their retirement because they don’t have any mortgage.
But what if they only have superannuation of around $ 200,000 or less, how is this small amount supposed to feed and cloth them for a potential 20 years plus of retirement ? It is not like the parable in the Bible of the loaves and fishes, their superannuation won’t keep on replenishing itself after they spend it.
Yes, it is great to own your home but do focus on investment at the same time so you will eventually retire with at least another source of income than just the small pension derived from Superannuation. Last year most superannuation funds lost quite a bit of our money, so if we had been retired and reliant on our allocated pension, we would have had to draw down on the principal and basically run out of money half way through retirement. What then one asks ? – your home puts a roof over your head but your bricks and mortar wont feed you.