4 tips for keeping your savings safe

22 Sep 2021

Having your financial affairs in order means more than simply spending wisely. Take advantage of these practical steps to protect your money in retirement. 

If you’ve worked hard your whole life and made sound investments to build up a healthy retirement fund, now is not the time to get complacent. In fact, you’ll want to be as careful as ever with your finances.

As you get older, it can become increasingly difficult to handle your own finances as safely, efficiently and confidently as you have to this point in your life. That’s not to say any financial management challenges necessarily emerge due to a significant decline in cognitive or physical functions. It could just be that you’re not quite as focused on the money coming and going from your accounts because, understandably, you’re too busy living it up with loved ones during these wonderful years of freedom.

Unfortunately, your precious nest egg is always at risk of dipping, dwindling, or – in the worst-case scenarios – dropping like a stone into an ocean of financial mismanagement or misfortune.

But never fear, we’ve got you covered. Here are some tips for keeping your savings safe in retirement. 

1. BE CAREFUL WHO YOU TRUST

It’s a sad reality that retirement-age Australians are sometimes victims of financial exploitation, abuse, fraud or theft, either at the hands of scammers or almost inconceivably friends or family.

Losing even a fraction of your hard-earned life savings, let alone everything, to unscrupulous means could be devastating for your future plans. The good news is you can take certain measures to prevent these kinds of problems from occurring in the first place.

We will discuss some of these measures below, but step one is to be careful who you trust with your money. Always be wary of people’s motives when it comes to handling your finances or sharing your personal details. 

2. AUTOMATE ALL YOUR FINANCES

A simple solution to money management concerns is to automate all your finances.

What does this mean exactly? Any sources of income – including the age pension, social security payments or casual employment – should be deposited directly into your primary bank accounts.

Similarly, regular bills and other expenses – such as utilities, insurance, rental or mortgage payments, subscriptions, etc. – should be debited from your bank account automatically on predetermined days of the week or month.

Once set up, this automated approach makes it much easier to keep track of your money on the go and over the long run. 

3. STOP COUNTING ON CASH

Chances are you’ve spent a large portion of your life keeping stacks of cash around the house for a rainy day. Perhaps you stockpile notes in a drawer, in various jars and tins, or in random places you never expect anyone to look. Maybe you take relatively large sums of money in your purse or wallet when you go out.

Well, it wouldn’t be a bad idea to cut this risky practice. Cash is difficult to remember let alone monitor, yet it’s easy for other people to access without your knowledge. Cash goes missing far too often.

By using ATMs, online banking and debit/credit cards you keep an electronic record of your transactions. This also gives you peace of mind that unusual or unauthorised transactions will be spotted by your financial institution.

There’s nothing wrong with having a little cash available at the drop of a hat, but don’t get too carried away. 

4. NOMINATE A POWER OF ATTORNEY

Establishing a power of attorney means giving a trusted person the authority to manage your financial affairs in circumstances where you’re unable to do so yourself.

This includes temporary situations, for example if you’re hospitalised for a period of time without being permanently incapacitated.

The person you nominate as your power of attorney will be able to act on your behalf by operating your bank account and buying or selling assets as needed, but you will not lose control over your affairs.

A power of attorney can provide a valuable safety net if your life is momentarily impacted by unforeseen events. However, it’s crucial you select the right person for this responsibility.

REMINDER

Please remember that this is general advice only and it’s best to consult your financial advisor to receive advice tailored to your specific situation.