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Ask Paul: I'm 62, newly divorced and struggling to find work

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Q. I am starting from scratch at 62 with just $400,000: no job, no other investments or income. I am now in shared accommodation paying rent.

Well, my ex-wife demanded divorce and I lost heavily in the property settlement, including my house in Australia.

I was working overseas and unfortunately my contract also ended and, as you know, it is difficult to find a job at 62.

I have just returned to Australia to settle here.

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My Newstart claim has been rejected by Centrelink, as I do not meet the residency requirements.

How can I best invest the $400,000 so that I can get some regular income for my survival? - Mike

A. This is a hard one, Mike. You have been through a very tough time.

Clearly, you have taken the first key step and been to see Centrelink. As I understand it, you need to be here for 104 weeks to qualify for Newstart.

There are a range of conditions that would allow you to get it earlier but it sounds as if you do not qualify.

I am also 62 and have many friends who are our age, so I do know that getting work is difficult.

But I would encourage you to keep searching for a job, even if it is part time and not ideally what you want.

As for investing, this really depends on your attitude to risk.

You could certainly put a percentage of your savings into a number of quality shares. The advantage is that the income is much higher than that from a bank. Bank shares, for example, pay dividends of around 6%.

But I do think you need to keep at least half your capital in safe investments such as term deposits until you qualify for Newstart or retirement benefits or find work.

I do wish you all the best.

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Paul Clitheroe AM is a respected financial adviser and Money's chairman and chief commentator. He is chair of the Australian Government Financial Literacy Board, and author of several personal finance books. Click here to email Paul your money question. Unfortunately Paul cannot respond to questions posted in the comments section.
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