It’s supposed to be the golden age; that time of life where decades of hard work are paying off and your days are spent on hobbies, seeing friends or perhaps travelling. Then COVID-19 (coronavirus) came along. Instead of watching the sunset on a dream holiday, flights have been cancelled and a dark shadow cast over retirement savings.
It’s fair to say, while many Aussies are doing it tough right now, COVID-19 has created particular issues for retirees. In this article, we look at how the crisis is affecting them and the help available.
If you’re a self-funded, or part-funded retiree, you may have watched your once comfortable retirement turn into a ‘modest’ one within a few short weeks. Many businesses are facing some kind of negative effect due to COVID-19, leading some to cancel or slash dividend payments. If you rely on these as a source of income, you might be feeling anxious about the effect on your cashflow. You might also be using the rental income from an investment property to fund living expenses. With the introduction of government measures for tenants around rent reductions, you’re potentially facing into a difficult period.
Perhaps you’re worried there’s no time to ride out the storm and are unsure how long you’ll be able to continue funding your retirement, but one way to take control is to plan instead of panic. It’s important to take time to understand your new position and avoid hasty decisions while considering options to get your retirement back on track.
If you can and want to put the brakes on spending and try to preserve retirement savings, the government is making temporary changes to minimum super drawdown requirements for account-based or allocated pensions, annuities and similar products. There has also been a reduction on deeming rates. This article from AMP Capital highlights what to watch with minimum pension reductions.
Retirement can be a financially vulnerable period of life, and each person’s circumstances will be different. It’s important to seek professional financial advice before making any decisions around your retirement savings.
Health risks and mental wellbeing
The government says people aged 70 years and over and people aged 65 years and over with chronic medical conditions are at greater risk of more serious illness if they are infected with coronavirus1. This makes it doubly difficult if you’re caring for grandchildren or elderly parents, either in your own home or regularly visiting them in an aged care facility.
Despite restrictions lifting in line with the three-stage plan, older people are still being encouraged to stay home to protect themselves. Beyond Blue says older Australians might be feeling as if their “life and day-to-day routine have been abruptly turned upside down. For older people living by themselves, who depend on visits from friends and family for company, this sense of isolation will be even more keenly felt.” If you feel this way, Beyond Blue has created: Staying well, staying positive: a guide to coping with coronavirus for older Australians. It provides advice on looking after yourself as we ride out the pandemic. Tips include staying connected, keeping perspective and making sure your days have structure.
Whatever you’re feeling, it can help to have someone to talk to. The government has launched a free COVID-19 support line for senior Australians, their families and carers to help them manage their mental health during COVID-192. The service is for people who might be feeling lonely or distressed, troubled or confused, or need to talk to someone about concerns when caring for a vulnerable person during the COVID-19 outbreak. You can call the COVID-19 support line number on 1800 171 866.
It’s been a distressing time for those in aged care and their families. With the virus being particularly serious for the elderly, difficult and often highly emotional decisions have had to be made. If you’ve had to stop or restrict visits to see relatives in aged care, you may feel anguish at being unable to see them as often, as well as worrying about the risk to their health and mental wellbeing.
If you’ve taken a relative out of aged care and into the family home, or are already a carer for an elderly parent, there may be several concerns. A recent report from National Seniors Australia3 notes the fear carers have of both passing on the virus and worrying about who will look after their relative if they themselves get sick and are unable to care for them. Similarly, the elderly person may feel they’re being a burden.
On top of the stress of temporarily removing relatives from aged care, families are also at risk of facing extra costs. If a resident is away from the facility for more than 52 days for non-hospital reasons (known as social leave), the government’s subsidy would cease and not cover additional days. However, the good news is recent amendments to the Aged Care Act now give aged care residents the option of taking additional leave during an emergency. The government continues to provide its subsidy for residents on emergency leave, so neither residents nor providers are financially disadvantaged4.
Beyond Blue is sharing ways people can support older people during this time. Helping them stay connected, assisting with healthcare needs and providing social and practical support can all contribute to their wellbeing.
Seeking professional help
If you’re feeling anxious, or are struggling to cope, remember you’re not alone in this crisis - help is available.
Beyond Blue’s Coronavirus Mental Wellbeing Support Service - 1800 512 348
Free COVID-19 support line for Senior Australians - 1800 171 866
Financial Information Service – 132 300
7 ways to stay mentally healthy through isolation03 April 2020 | COVID-19 Remembering to take care of your mental health is important during times like these. Here’s seven ways you can practice self-care when isolating. Read more
Steps to help your retirement get back on track28 April 2020 | COVID-19 Has COVID-19 created uncertainty around your retirement plans? Here are some ways to help you improve your personal finances and stick to your retirement goals. Read more
Changes to pension drawdown and deeming rates27 March 2020 | COVID-19 The Government has announced plans to reduce the minimum pension drawdown and deeming rates to help Australians manage the financial impact of COVID-19. Read more
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