OverSixty April 2023 Digital

ISSUE 4 | APRIL 2023 | OVERSIXTY.COM.AU 16 YOURMONEY for an employer, he says. “People working in the corporate world should spend at least two to three years pre- paring themselves for the next stage. "at might mean studying, making sure they’re in a !nancial position to survive 12 to 18 months, and then embarking on an endless cycle of testing ideas and propositions.” Tapping into super may be an option, de- pending on your age, or using some equity in your house if you have one. “Everything takes longer than you anticipate and costs more. Get a !nancial adviser as early as you can to prepare yourself for retirement, and look as far ahead as you can,” he advises. Kimwas ready to launch her business, then Covid hit. Two years of pandemic lockdowns presenteda setback, as the yoga studioswhere she was workingmoved to online classes. She has since found a dedicated following in the InnerWest of Sydney, particularly from students who prefer face-to-face classes. “Yoga is about connection as well as physical movement. Being in a community of practice is verymuch the experience that my students are seeking,” she says. Kim believes being %exible, pivoting when necessary and maintaining her own yoga practice are the secrets to her wellbeing. “I’m 67 and I have a lot of living to do, and I consider myself far too young to consider rolling over. For me, retirement isn’t some- thing that has an attractive ring to it. “We are each responsible for our own hap- piness. We can increase our ability to feel happy by working to our strengths and by having a purpose,” says Kim. HELEN SIGNY YOUR MONEY R etirement was the furthest thing from her mind when Kim Dixon, a senior ex- ecutive for a global non-government organi- sation, was approached by her boss one day in their Sydney o#ce. “He asked me when I was planning to re- tire,” says Kim, who was then 60. “I didn’t have any plans at that stage, re- tirement just wasn’t on my radar. But it did trigger me to wonder whether they were looking for a younger model, and, if so, what was my back-up plan.” Kim had been working in her busy role for 14 years, and the pressure was intense. She coped with the stress through regular yoga and meditation, so she was interested when she saw a notice on the yoga studio door advertising a teacher training course. “Initially I thought they would be look- ing for younger people so I put it out of my mind entirely, but six weeks later the studio owner approached me and said, ‘You would be an excellent yoga teacher, have you ever thought about teacher training?’” says Kim, a mother of one who lives in Sydney. Kim organised time o$ work and contin- ued her training at the weekends. Although she clocked up 200 hours and became certi- !ed, she still didn’t feel she had the necessary A #exible work transition knowledge to teach a class, so she completed several further courses, including yoga for trauma, mental health and body image, and studied anatomy and physiology. She started to teach yoga weekly in 2016 andworked both jobs in parallel for six years before leaving her executive role in 2022. "ere has never been a better time for old- er Australians to upskill. Not only are indus- tries facing signi!cant workforce shortages due to Covid, but years in lockdown have left many Australians questioning what they re- ally want out of their working lives. "e trick to launching a new business af- ter retirement is to do the groundwork, in- cluding retraining, write a business plan and plan carefully for a !nancial hit, says Andrew Keay, Director at Aged Care Planners. "ose who leave the corporate world with a redundancy will have some breathing room, but for others it can be a good idea to launch a new enterprise while still working “I have a lot of living to do, and I consider myself far too young to consider rolling over” After a high-pressured corporate career, Kim Dixon’s transition to yoga teacher was smooth $owing. Find her at Anvayayoga .com.au Photos: Supplied YOUR MONEY  Pros and cons of gifting to your kids Continued from page 15 Years spent perfecting her practice as a yoga teacher while working in the corporate world has eased the transition to unretirement for KimDixon Without a formal loan agreement, this can be almost impossible to enforce, and it can mean the ex-partner of a child e$ectively ends up with the funds or the value of the funds, despite the parents’ expressed wishes that this doesn’t happen. Another growing problem is where parents guarantee a loan by using their own debt free home as part of the collateral or drawdown against their debt free home to provide funds for a child to buy a home. In doing so, they e$ectively put their own home at risk. "is is especially a concern now interest rates are rising. Many people who bought a home in the past few years are now, or will soon, !nd themselves struggling to meet the new higher repayments on that loan. If a child !nds they can no longer a$ord the loan, they may be forced to sell the prop- erty. If, in linewith recent property price falls, the funds released from the sale of the prop- erty are insu#cient to cover the outstanding debt, it is possible the !nancier will pursue ‘MumandDad’, who guaranteed the loan, for the outstanding amount. "e other big issue many in retirement en- counter when giving money to their children is that while they felt they were in a comfort- able !nancial position at the time, and more than able to a$ord the gift, this situation can change with time. It is possible events can turn against you and investments can fail or generate less earnings than are required to fund your life- style. At this point, it is almost impossible to claw back any funds gifted in previous years, leaving parents to rely solely on the generos- ity of their children. "is is most clearly crystalised when a parent gifts a signi!cant amount to their children and then !nds they need to enter a nursing home. For those on an age pen- sion, the Federal Government will continue to contribute towards the cost of staying in a nursing home. "e actual amount is means tested in much the same way as with the age pension and any funds that have been gifted away will be included in the assets and income test, even though the person moving into the home no longer has access to those funds. "is can leave many moving into an aged care facility lacking su#cient funds and de- pending heavily on the generosity of their children to provide for them. Finally, one of the least discussed impacts of gifting to adult children is the impact on them from a psychological perspective. Some children will see it for what it is, a gen- erous loan or gift and be duly appreciative. Other children will see it as a reminder that their parents don’t believe they can make it on their own – that while their parents were able to buy their !rst home entirely by their own e$orts, they don’t believe their child is capable of doing the same. For some children, this seed of doubt can steadily grow and undermine their con!- dence in a variety of ways. For others, it can be the !nal straw that prompts them tomake a range of harmful decisions for themselves and their families. So, while it may appear the right and gen- erous thing to do, gifting funds to your chil- dren now that you have stopped working is something everyone in retirement should think long and hard on before they act. NOTE: !is is general advice only. You should seek advice speci"c to your circumstances.