This article written by Anthony Keane was published in The Australian on 28th September 2023.

Running out of money is a rising fear among Australians, whatever their age group, but there are
ways to combat these concerns.
Surging inflation over the past two years has reduced the value of retirement nest eggs – hurting
those who have stopped work.
More broadly, households battling higher mortgage interest rates, rents, groceries, fuel and
energy bills are finding it much tougher to end each month in the black.
Financial planners are urging people to track their spending against a budget, have a diverse
range of assets and income sources, and seek help where needed.

FOR RETIREES
The past two financial years of inflation increasing at 6 per cent or more have put pressure on
retirement living costs and existing savings.
CreationWealth senior financial adviser Andrew Zbik said running out of money was “a
perpetual concern” but many people worried more than they needed to.
“The mistake that many people make is they have this idea that they cannot draw down on their
capital and can only live off the income,” he said.
However, Australia’s retirement savings system was designed for people to draw down on their
capital, Mr Zbik said. The age pension acts as a safety net later.
“For most people who own their own home, it isn’t a capital problem,” Mr Zbik said.
People could downsize to a cheaper property and put $300,000 per person into super as part of
the federal government’s downsizer contribution rules, he said. Government and private reverse
mortgages also offer access to home equity.
While non-homeowners receiving only a pension were on “struggle street”, Mr Zbik said many
Australians with homes enjoyed expensive lifestyles with more holidays and restaurant meals
than decades past.
“For most people the means to pull in their budget is there, and their necessities are actually
wants,” he said.
Mr Zbik said people should have a plan to build a decent nest egg, and he noted that Australians
were in an era where working longer helped deliver balanced lifestyles.
“A lot more people are accepting that in retirement they will work part-time, and are recognising
from a mental health perspective that’s a good thing,” he said.
“You keep an active body and an active mind and you are alive.”
Findex head of investment relations Matthew Swieconek said it was common for retirees to
worry about the longevity of their capital, especially in the early stages, and these concerns were
elevated.
“It is true that many retirees are benefiting from higher interest rates on their deposits, but large
numbers of retirees are now outlaying more in expenses than they are earning on their savings
and investments,” he said.
Mr Swieconek suggested retirees set realistic budgets and track spending, understand the
government benefits available to them, and have a diversified investment portfolio that provided
long-term capital growth.

FOR EVERYONE ELSE
More younger people were struggling to make ends meet as the cost of living skyrocketed,
particularly for housing costs, utilities and groceries, Mr Swieconek said.

“These concerns are seeing an increase in personal loan and credit card usage as younger
Australians seek to meet their basic costs of living with personal debt,” he said.
Borrowing to pay living costs pushes people into a debt spiral, with many credit card interest
rates near 20 per cent.
There is help available through free financial counselling by calling 1800 007 007, while banks
and other lenders have hardship teams that can help people renegotiate debt and may be able to
offer repayment holidays or other assistance
Once debt is under control, the next step is to lower your chances of running out of money in the
future.
Mr Swieconek said people should have budgets and monitor spending, review insurance, utilities
and subscriptions, and “pay yourself first”.
“Be disciplined in setting aside an affordable amount for long-term savings and investment each
month,” he said.
Wattle Partners financial adviser and director Drew Meredith said people with large mortgages
were feeling significant pain, and there were strategies available to avoid running out of money.
“Always call your bank or service provider to ask for a better deal,” he said.
“Maintain an emergency account in all circumstances.
“Be patient when saving or seeking to invest. This is a very long-term game.”