Over the last year we have had a regular stream of economists, business leaders, academics and senior bureaucrats all telling us how it’s imperative that the government gets the budget under control and we live within our means.

Unless an irresponsible Senate continues to block most attempts at government savings, we are likely to see further reductions in middle class welfare and this may impact on retirees.  This likelihood on top of a volatile world economy and record low interest rates makes for a pretty dangerous mix.  Now might be a good time to consider how you could reduce some of the risks.

Your money:  While low interest rates are good for business and home buyers, they can be tough on retirees living off their invested savings.  A couple with $500,000 invested should feel reasonably secure, but when this money is only earning 2% pa interest, it produces an income of only $10,000 pa.  According to the Association of Superannuation Funds of Australia, a “modest” living standard for a couple owning their own home would cost $33,700 pa.  So a couple with half a million dollars in the bank would be eating into their capital by up to $23,000 pa depending on the level of their pension.

All this suggests that unless you are an experienced investor, you need some good financial advice to maximise your returns while protecting your capital.

Your Health:  Our Health system focuses largely on treating illnesses rather than encouraging wellness.  This means that as the population ages there are going to be more and more pressure on the Health System till it becomes unsustainable.  The only practical way to control the health budget is to get people to become healthier.

Rather than depending on doctors to treat us when we get sick, a better solution is to take responsibility for our own health and make the lifestyle changes that will enable us to be healthier and avoid many of the illnesses common to older people.  “Prevention is better than cure”.

It is wrong to assume that growing older automatically means becoming sick and frail.  There is overwhelming evidence that if we adopt a healthier lifestyle we can delay the ageing process and have a better quality of life in our later years. This is better for our bodies and our budgets.

Our book titled “How to stay Healthy, Active and Sharp in Retirement” is full of useful suggestions on how to do it.