Balance Aged Care Logo

Balance Aged Care Specialists

You’ve sold the home paid the RAD, but can’t get much income from the bank

Posted on: March 30th, 2020 by Eric Hiam in News

The fall in interest rates over the last 5 years to historic lows, has seen retirees struggle to earn much interest on their invested funds, to supplement any Centrelink or DVA pension they may earn, forcing retirees to rethink their investment portfolio.

Similarly those people who have moved into aged care facilities, and sold their homes to pay the Accommodation Payment as a RAD (Lump Sum) & have surplus money left over after paying the RAD, may have a negative impact on their pension. This, coupled with low interest rates on money invested means that their income is often far less than their expenditure.

So, what are the options to get a better financial outcome?

  • Take more investment risk?
  • Pay a bigger Accommodation payment (Bond)
  • Consider other investments that have greater Centrelink benefits
  • Lend money to family who are paying a higher interest rate on their mortgage & pay the same rate to “Mum” or “Dad”.

These options may or may not work in your particular circumstances, however there are options that may deliver a better financial outcome.

If you wish to discuss any of these options above, or any issue regarding aged care or aged care funding call our office on 02 8814-7307 or 1300-556287