The five money questions we're asking the most
Making an important financial decision can sometimes feel like the weight of the world is on your shoulders.
Have you considered all of your options? Have you missed anything? If it's all a bit much, you could consider seeing a financial planner to help you make an informed decision.
Research from the Financial Planning Association (FPA), released this week for financial planning week, reveals three in four working-age Australians seek advice from other people when making a financial decision.
Here are the top five questions people who seek advice from a Certified Financial Planner (CFP) professional commonly ask:
1. My child/husband/partner has been diagnosed with a medical condition that requires a lot of money. Should I sell my house?
The financial pressure of an illness can put families on the brink of collapse. Many assume that selling the house is the only option.
More often than not, the rent can be on par with interest-only payments.
You also need to consider how changing your home environment might affect your child or loved one's mental and emotional wellbeing. In some limited cases, you may access superannuation to pay for medical costs, but this may cause problems with tax and family tax benefits. It's wise to seek professional advice, so you can know your options.
2. Do we have to sell the family home to pay for my parents' aged care costs?
So often the path for an elderly parent to an aged care centre is sudden - straight from hospital on many occasions - after an unexpected fall or rapid decline in health. Aged care costs and choices can be confusing and overwhelming.
Do we sell the home? Do we keep the home and rent it out? Is my father/mother able to keep their pension? Do we have to sell investments to pay fees? A financial planner with experience and qualifications in aged care advice can help and give you relief at a difficult, emotionally charged time.
3. Should I contribute more to super or pay extra off my loan?
The overwhelming amount of information at our fingertips can paralyse decision-making.
This question generally arises at the pre-retirement stage after the kids have finished school and there is more disposable income.
The answer depends on goals, your age, level of super and debt, expected future expenses, etc. The main thing, though, is to do something and not be frozen by indecision.
4. How can you help me and how much will it cost?
Most financial planners are happy to have a complimentary first meeting to get to know you and your financial dreams.
If after that meeting you feel it's a good fit both ways, they'll usually present you with their terms of engagement, spelling out how they can help you and the fees they will charge.
All costs are talked about upfront and vary depending on the strategies and solutions needed to achieve your goals - but you get the power to choose.
5. How much do I need to retire on?
This is a common question with no easy answer. It depends on the lifestyle you want, including what hobbies or interests you might like to explore.
A CFP professional helps you figure it out. Often the most important conversation will be about risk tolerance.
Take this online quiz for a quick and easy way of assessing your aptitude for risk and planning.
You could also check out the Association of Superannuation Funds of Australia (ASFA) Retirement Standard calculator, which recommends $59,236 per year for a couple and $43,184 per year for singles.