Financial benefits in aus regarding retirements?

[Karools]

I am going way out of my comfort zone here: talking about finances.

 

I am an academic person. My father is a financial one. He is a financial planner with good international qualifications. He is turning 62 this year. Me, my wife and 2 kids are hopefully flying over by december this year. My sister and her family is hopefully coming sometime next year. We have had many discussions with him about him and mum moving over after us kids have settled in aus but he keeps on saying that he will not be able to afford it.

 

I know that I do not know enough about finances to try and persuade him differently, I am just wondering if any financial people on this forum have got some information that he might be missing that could make a difference. He says he doesn't even see the point in investigating the issue, as there is simply no way that he will be able to get enough money in the next couple of years to see him through retirement in aus. He will probably not be able to do any substantial work in aus as a financial planner due to his age. He is still fairly healthy though.

 

His argument is that he needs X amount of dollars in the bank so that his money would be his employer through interest. Being a financial planner his sums always start with the monthly salary he would need 25 years from now to keep up his financial obligations (policies etc) and still live a decent life without financial need. From the monthly salary in 25 years' time he gets to a massive amount X needed today in order to have that amount of interest. 

 

Is there maybe something that he doesn't realise about australian finances that could make a difference in the amount X required today? (This really is the end of my financial capabilities, so I may sound stupid in the next couple of sentences, please forgive me ) I'm wondering about the effects of lower inflation, free public health facilities (which I realize may not even be available to them due to age and visa stuff) public transport, exchange rate increases that could (should?) make paying RSA payments easier later on, etc. Anything that could make an impossibility in his mind a possibility, strictly from a financial viewpoint. Maybe even the probability of things in RSA turning out to make living here unaffordable in 20 years time (another forumite referred to the zimbabwe situation where money wasn't enough to live as there simply wasn't any food to buy). 

 

As you can see I am desperate to try everything in my power to get them there with us. I would be happy to assist them financially if I were able to, but I do not think that would sit well with him even if I could afford it. 

 

 

[Bob]

First of all, you need to build up an income that will support sponsoring your mum and dad.

That will take a couple of years.

Once you've got a reasonable income to show to the Australian government, then they will listen to you about sponsoring your parents to live in Australia.

You can only sponsor your parents if most of their kids live outside South Africa. For instance, if they have four kids and only you have migrated overseas (to Australia, in this case) and the other three kids are still living in South Africa, then I don't think the Australian gov't would entertain your idea of bringing them over. I could be wrong. Others will no doubt let you know otherwise.

Secondly, the sooner they come over (with you sponsoring them), then the sooner they are able to access Australia's old age pension.

At the moment, overseas people must live at least 10 years in Australia to qualify for any old age pension. Once they get that, your mum will get $17,000 a year and your dad will get another $17,000 a year, tax free.

In the meantime, after 2 years, they can become "seniors" which means they get a very small income ($130 each) every quarter as "Commonwealth Seniors", allowing them to hold a Commonwealth Seniors Health Care card from the Australian gov't. This will give them free doctor's visits and free hospital and cheap prescriptions for any medicines they might need.

https://www.humanservices.gov.au/customer/services/centrelink/commonwealth-seniors-health-card

If dad is 62 right now, then when he is 64 / 65 you'd have been in Australia long enough to sponsor him to come over. It won't be cheap. It costs a lot of money as an older person to get permanent residency, as once they are in, the Australian government become liable for all their health care costs and old age residential costs and so on. One of the migration agents on this forum could point you in the right direction about the applying for a visa and the cost involved.

That would take your dad up to 74 / 75 before becoming eligible for the Australian old age pension

https://www.humanservices.gov.au/customer/services/centrelink/age-pension

I know an old South African, almost 80, who didn't want to spend much money to get his permanent residency visa in Australia. He was happy to just sit in the waiting list each year. His two sons both lived in Australia and were willing to sponsor him. 

Eventually, after 10 years, he got his visa at very little cost, but now he's waiting to access the Aussie old age pension with about 7 years left to go. He will probably die before ever reaching it.

If he had spent the money years earlier to come to Australia, he would already have served out his 10 years living in Australia and would be getting $34,000 a year for himself and his wife as Australian pensioners.

He saved $50,000 to get his visa, but has missed out on $340,000 in Australian pensions entitlements.

He definitely made a lousy choice in choosing not to pay much money for a visa and was happy to sit on the waiting list for 10 years until it came through.