Retirement Income

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Retirement income planning: 3 important questions you need to answer

<p>Planning for retirement can be a daunting process, with pressures to get your finances and priorities in order. If you do not have a clear idea of how you want your retirement to look like, here are the three questions to help you get started on achieving your dream retiree life.</p> <ol> <li><strong>When do you want to retire?</strong></li> </ol> <p>Having a ballpark idea of the age you want to stop working can help you figure out how much savings and income you will have when retirement comes. These include sources such as superannuation accounts and Age Pension entitlements.</p> <p>From here, you can calculate if these savings would be enough to last for the rest of your life. While no one knows how long their retirement will last exactly, it could be longer than expected. The current life expectancy for Australians is 82.5 years.</p> <p>Knowing the timing will not only give a proper foundation to determine the costs, but it can also help you sort out career and life plans with your partner and family.</p> <ol start="2"> <li><strong>How much will you need in retirement?</strong></li> </ol> <p>Consider your priorities. Whether you want to <span><a href="https://www.oversixty.com.au/lifestyle/retirement-life/the-holidays-you-need-to-try-in-retirement/">travel</a></span>, take on new hobbies, live on a farm or spend more time with your grandchildren, these options will bring different <span><a href="https://www.oversixty.com.au/lifestyle/retirement-life/how-much-do-you-need-to-live-comfortably-in-retirement/">expenses</a></span> and financial commitments to see through. Be as specific as possible with your wishes – how often you want to travel, what city you want to reside in – to gain an accurate picture of your future spending.</p> <p>Health expenses and emergency spending should also be factored in, as well as inflation rates. Even with senior benefits such as Commonwealth Seniors Health Card, it is likely that your medical expenses will go up as you grow older.</p> <p>Creating a preliminary budget will help you figure out the costs of your desired lifestyle and strategise accordingly.</p> <ol start="3"> <li><strong>How much do you have to save?</strong></li> </ol> <p>Saving early is the key. Most financial experts recommend committing 10 to 20 per cent of your income throughout the working years for retirement. However, if the numbers still come up short, there are some options to boost your retirement income.</p> <p>Finding part-time work or investing in assets, such as shares or property, could lower your savings burden. You can also unlock wealth from <span><a href="https://www.oversixty.com.au/finance/retirement-income/how-to-unlock-wealth-from-your-home">home equity</a></span> or other valuables at home. If you have real estate, there is also an option to top-up your pension with the <span><a href="https://www.oversixty.com.au/finance/retirement-income/options-for-boosting-income-during-retirement/">Pension Loans Scheme</a></span>.</p> <p>Another way is to adjust your retirement plan and make compromises, be it moving to a lower cost area or cutting down on the less necessary expenses.</p>

Retirement Income

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10 ways to find new investment ideas

<p>Investors now have an unprecedented amount of information available to them to expand their knowledge base, which is especially important to those who are managing their own superannuation money. You can gain investment ideas predominantly from the following 10 sources:</p> <p><strong>1. Media</strong></p> <p>The media provides a wealth of information on individual stocks, market themes and economic trends.</p> <p>Valuable media sources include financial newspapers, radio, television and online newsletters such as Cuffelinks and Livewire. Market data provider Bloomberg, which is universally used by institutional and professional investors, has free daily email alerts and newsletters available on its website.</p> <p><strong>2. Market tables and price movements</strong></p> <p>After the market closes each day, share market tables can be reviewed to identify companies with share prices that have reached 12-month rolling highs and lows. When a price hits a 12-month high, it can indicate a degree of momentum (particularly in a bull market) that will drive it higher. Conversely, if a company hits its 12-month low, this is often a sign of fundamental company issues and the price is likely to fall further.</p> <p><strong>3. Word of mouth</strong></p> <p>While company executives can provide a biased perspective, personal and business contacts with knowledge of a company or industry can be more objective. Some of the most illuminating investing insights can come from personal and professional connections such as family, competitors, sell-side analysts and other fund managers.</p> <p><strong>4. Stock brokers</strong></p> <p>Stock analyst reports provide valuable and well-researched business insights. If a company is covered by sell-side research analysts, analysing their reports and understanding the consensus forecasts could prove valuable. </p> <p><strong>5. Directors buying</strong></p> <p>As a general rule, a company’s directors know more than others in the market. Therefore, directors buying shares is a very strong signal about the business. The announcement of a Change in Director’s Interest Notice revealing a company director has substantially increased their holding may prompt us to examine the company further.</p> <p><strong>6. Observations of a business</strong></p> <p>Everyday observations can also offer insights into a company. Apple’s share price languished for many years until after the release of its portable media player iPod. Around this time, the casual observer would have witnessed thousands lining up to buy the iPod and an increase in foot traffic at Apple stores, however this strong demand was not reflected in Apple’s share price. Apple subsequently sold 55 million iPods, generating US$9 billion in revenue and spurring the share price.</p> <p><strong>7. Life experiences, behaviours and preferences</strong></p> <p>Our own life experiences, behaviours and preferences, and those of the people around us, can also reveal a consumer trend, or structural industry change, that leads us to an investment idea.</p> <p>Some time ago, I tried to buy a tin of infant formula only to find there was a considerable shortage. This experience demonstrated demand for this particular product was vastly outstripping supply. This insight was the catalyst to investigate the company and subsequently invest in it.</p> <p><strong>8. Company meetings and site tours</strong></p> <p>Company meetings and visits offer insights into a business such as the quality of management and its culture. Individual investors can sometimes join site visits arranged by the company. For example, an executive’s remark that a certain competitor is giving them a ‘run for their money’ could prompt us to investigate that competitor business as a potential investment.</p> <p>Any investor can contact a company and ask to meet the CEO or other executives and, while access to executives at larger companies may be limited, micro and small-cap companies should welcome interest from potential shareholders.</p> <p>Retail investors may also have the option of listening to earnings results teleconferences, giving them the opportunity to interpret the executives’ tone, as well as their words. Larger companies often host investor days for shareholders.</p> <p><strong>9. ASX announcements</strong></p> <p>Previously undiscovered investment gems can be found through regular scan of ASX company announcements. Company announcements can be a particularly good source of micro-cap investment ideas during reporting season, and are available to everyone.</p> <p><strong>10. Ask a lot of questions</strong></p> <p>Having a fascination with the market and an inquisitive attitude are indispensable attributes for investors. The most successful investors ask a lot of questions and are driven to gain an in-depth understanding of a company, trend or investment theme.</p> <p>It’s possible to generate a worthwhile investment idea, or a piece of information that leads to one, from a vast range of sources. Constantly gathering insights to develop a broader knowledge base and being alive to potential investment ideas is key.</p> <p>Do you have any other sources for investment ideas? Share them in the comments below.</p> <p><em>Written by Chris Stott. Republished with permission of <span><a href="https://www.wyza.com.au/articles/money/superannuation/10-ways-to-find-new-investment-ideas.aspx">Wyza.com.au</a></span>.</em></p>

Retirement Income

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Financial tips for a golden gap year

<p>Baby boomers are increasingly opting to take a ‘golden gap year’ in their latter working years or at the start of retirement, but make sure your finances are in order before you go.</p> <p>The concept of a 'gap year' spent living overseas isn’t just for those who are between school and university. It can be a very attractive 'once in a lifetime' experience for those who want a sabbatical in the latter stages of their working life, or for those who want to launch into retirement with a bang while they are still in good health.</p> <p>The need to plan where you will live while overseas and what experiences you will enjoy will probably be top of mind as anticipation builds. But one issue that you may not automatically consider is the impacts and implications for your personal financial situation. To help you cover the bases, here are some useful guidelines.</p> <p><strong>Will tax be an issue?</strong></p> <p>Let's say you decide to go to Europe and set up a home there for a couple of years to really soak up the culture and lifestyle. You may even do some part time work to generate some income in between tours around the continent. Your home back in Australia may be rented out while you are away to generate some income too.</p> <p>How would you be treated tax-wise? The answer to this may not always be clear cut.</p> <p>One option that may be worth exploring is the potential tax benefits of declaring yourself as a non-resident for income tax purposes.</p> <p>There may also be capital gains tax or withholding tax advantages relating to your Australian property, bank accounts or investment assets while you are overseas.</p> <p>The flip side of earning an income overseas is that you may be required to pay tax in the country where it's earned. Australia only has reciprocal agreements with a few other countries to prevent double taxation, so this needs to be checked out.</p> <p>It can be a complex issue to manage by yourself, but the potential benefits make it well worth getting some professional advice so that you maximise your tax situation.</p> <p><strong>What about your super?</strong></p> <p>The potential tax advantages and pitfalls for non-residents may have particular impact on your superannuation, so this is one area that you should definitely seek advice on from a qualified financial planner.</p> <p>If you are working while overseas and as a non-resident, you are generally still allowed to contribute to your super. If you retire while overseas you are still subject to the same release restrictions on super benefits as you would be if you were still in the country.</p> <p>Those with self-managed super funds have some particular rules and regulations that may catch them out if they are living overseas, so you should seek advice to ensure you remain compliant.</p> <p><strong>What will happen to your Centrelink benefits?</strong></p> <p>If you are already qualifying for Centrelink benefits, a lengthy stay overseas may impact your entitlements. Again, individual circumstances will need to be examined on this, so you can’t take it for granted that you won’t be adversely affected. Better to plan with the help of a financial adviser to analyse your situation and structure things to achieve optimal outcomes.</p> <p>Pharmaceutical benefits may also be affected and if you are on prescription medications make sure you check out the accessibility of relevant drugs overseas – regulations may be different to what they are in Australia.</p> <p><strong>What about if the worst happens while you are overseas?</strong></p> <p>Managing your investments and estate while overseas can be a nightmare if you don't make proper arrangements before you leave. Setting up things like power of attorney and updating your will are essential in case the worst happens while you are away. This ensures that you maintain the control over management and disposal of estate assets, with minimal impact on your loved ones.</p> <p>Don't forget your life insurance too. Not all policies will treat you the same way if you are residing overseas, so have an adviser check them out to, so that you are not caught out.</p> <p>Planning your finances, along with some professional guidance, is an essential for making your overseas sojourn worry free, so speak to a financial planner about your situation as early as possible.</p> <p>What issues do you feel are of most concern if you were to live overseas for a while? Share your thoughts below.</p> <p><em>Republished with permission of <span><a href="https://www.wyza.com.au/articles/money/financial-planning/financial-tips-for-a-golden-gap-year.aspx">Wyza.com.au</a></span>.</em></p>

Retirement Income

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Coles and Woolies' hot roast chickens just got a lot more expensive

<p>Instead of rewarding consumers with a quick and easy meal to grab at the end of the week, Coles and Woolworths have decided to go in the other direction.</p> <p>Since 2018, prices of a roast chicken at both major grocery retailers have steadily been increasing.</p> <p>At the beginning of 2018, the hot roasted chickens were available to customers at $8. Not bad, especially in a pinch.</p> <p>Prices increased to $9 a few months ago and in a move that has left consumers scratching their heads, the retail giants have decided to increase the price again to $10 each.</p> <p>A member in Markdown Addicts Australia noticed the price hike and asked the group:</p> <p>“Just curious did the coles chickens go up from $8 or have they always been $10”.</p> <p><span>And fans of the Facebook page were not happy.</span></p> <p>“So much for down, down and staying down,” one person remarked whereas another mentioned that they got one from Coles earlier that evening and “it was tiny".</p> <p>However, some were quick to point out that the price increase is because of the drought that’s impacted many families across Australia.</p> <p>One woman shared her story of being a farmer and having to deal with the increase in chicken feed prices.</p> <p>“It’s the drought, the price of grain to feed the chickens has more than tripled. How do I know? I’m a farmer. It’s really hard at the moment. There’s no grain, and what goes around has gone from $250 a tonne to $750 a tonne,” she explained.</p> <p>A spokesperson from Woolworths told Over60:</p> <p>"At Woolworths, we understand every dollar counts and work hard to provide an affordable weekly shop for our customers.</p> <p>"We’re also aware of the pressures facing Australian poultry producers, with the cost of feed up more than 30 per cent on last year.</p> <p>"Our new roast chicken pricing reflects the increased cost of production and will help underpin the viability of our Australian poultry producers.</p> <p>"We continue to offer great value across our customers’ total shop, with more than 5,000 products on our Low Price Always and Prices Dropped programs."</p> <p>The spokesperson also confirmed that <span>Woolworths hot roast chicken is now $10. In 2016, the price of its hot roast chicken was $11, meaning the current price still represents a $1 saving on the 2016 price.</span></p> <p>Some people were quick to point out that if you’re unhappy with the price increase, Red Rooster, IGA and Costco have cheaper chickens available. However, your access to these stores and the prices may vary.</p> <p>Have you noticed the price increase of Coles and Woolworths' roast chickens? Let us know in the comments.</p>

Retirement Income

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Are you missing out? $110 million Medicare rebates left unclaimed

<p>More than $110 million worth of Medicare rebates are waiting to be claimed in Australia.</p> <p>Human Services Minister Michael Keenan said the rebates have gone unclaimed since 2016 because 670,000 Australians have not given their bank account details to Medicare.</p> <p>“I would prefer this $110 million would be sitting in people’s bank accounts rather than ours,” Keenan told the <a href="https://www.9news.com.au/2019/02/07/07/02/medicare-rebate-millions-left-unclaimed"><em>Today</em></a> show on Thursday.</p> <p>“We give people ample opportunity to do that and we constantly remind them to update their bank account details with us.”</p> <p>Keenan said it would only take “less than a minute” to provide the necessary information to receive the rebates. Customers have been notified of the money owed.</p> <p>Customers may provide their bank details via online app, phone or in-person at a Medicare branch. Keenan told the <a rel="noopener" href="https://www.abc.net.au/news/2019-02-07/110-million-in-unpaid-medicare-rebates/10787606" target="_blank"><em>ABC</em></a> that people could nominate other parties to receive the funds. For example, teenagers with Medicare cards could nominate their parents’ bank account to receive any rebates.</p> <p>Once the information is received, Keenan said the outstanding funds will be sent through within 48 hours.</p> <p>Families and couples are also required to register to Medicare Safety Net, which gives a higher benefit once the threshold for out-of-pocket expenses is reached.</p>

Retirement Income

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What are managed funds?

<p>When you think of the ways you can invest, many people first think of buying an investment property or maybe some shares on the stock market. While these methods of direct investment have their own merits, many investors would be better served by using the investment power of a managed fund to achieve the goals of growth, security and diversity.</p> <p>But how do managed funds work and why are they an effective way to invest? Here are the basics about these funds to help you make the right decision.</p> <p><strong class="bigger-text">The concept of pooling funds</strong><br />If you are simply investing by yourself you are naturally limited in how widely you can spread your investment. Your capital will only go so far and your scope is usually limited to assets that are “visible” to you. For example, you can look at what properties are available in the local real estate window or check the financial pages to see what shares can be bought on the local stock market.</p> <p>Managed funds offer a fundamental difference simply through the collective power of pooling your money with other investors. With a much larger capital base, the pool of funds can be invested across a range of assets to help spread risk and to seek a wider selection of opportunities.</p> <p>This collective buying power allows more diversification, so that rather than being confined to just one or a few areas you have a complete portfolio in one neat package.</p> <p><strong class="bigger-text">Understanding types of managed funds</strong><br />There are different types of managed funds to suit different investor profiles and to pursue different investment objectives. In general terms, managed funds can be divided into two categories; single sector funds and multi-sector funds.</p> <p>Single-sector funds will generally focus on one type of asset class, such as cash, fixed interest (eg Government Bonds), property, Australian shares or international shares.</p> <p>Multi-sector funds will spread across a range of these asset classes and will normally target a certain risk/return profile by having a weighting toward certain types of assets. The weighting will normally be indicated by a term such as “growth funds”, which invest predominantly in shares and property; “conservative funds”, which lean toward less volatile assets like fixed interest; and “balanced funds”, which are somewhere in between.</p> <p>Each managed fund has a statutory requirement to publish documentation, which will detail the fund’s particular objectives and the parameters for how it invests. This allows you to choose the fund that best matches your personal requirements.</p> <p><strong class="bigger-text">Profit from specialised skills</strong><br />Another benefit of pooling your investment through a managed fund is that you gain access to the investing expertise and manpower that they possess. A fund manager will have a range of skilled personnel with skills in researching, analysing and allocating the pool of money to achieve the fund’s stated objective.</p> <p>Personal investors can leverage this expertise to achieve a significant advantage in the quality of assets chosen, in contrast with having to do all the research and asset selection yourself.</p> <p><strong class="bigger-text">Keeping a watchful eye</strong><br />Monitoring and managing a portfolio of investments takes considerable time and skill. By using a managed fund you automatically have the day-to-day operational management taken care of. You can then simply look at periodical statements from the fund to see how it is performing and how it is moving its assets about to achieve its objectives.</p> <p><strong class="bigger-text">But what about the cost?</strong><br />The level of skill, buying power and convenience that managed funds offer will, of course, involve some cost to the investor. Regulation of the industry ensures that such fees and costs are declared in a fund’s promotional material so that they are transparent.</p> <p>While you may think twice about whether such fees are worth it, remember that an investment that you buy into directly, (such as an investment property or company share), will still involve some form of cost – often much greater than what you would pay with a managed fund.</p> <p>Buying an investment property, for example, will involve legal fees, stamp duty and inspection costs. Buying shares directly will incur brokerage costs. When you take this into account, the fees of a managed fund can represent very good value for the level of expertise and diversity they provide.</p> <p><strong class="bigger-text">Choosing a fund to suit you</strong><br />If you are interested in the benefits of a managed fund, then your financial adviser can help you assess the type of fund that suits you by making an assessment of your specific lifestyle objectives, time horizon and risk appetite. They should also have up-to-date research on managed fund performance, which can help you make informed choices on the fund or combination of managed funds that are right for you.</p> <p>What do you see as the main advantage of a managed fund? Share your thoughts below.</p> <p><em>Written by Bridges. Republished with permission of <span><a href="https://www.wyza.com.au/articles/money/financial-planning/what-are-managed-funds.aspx">Wyza.com.au</a></span>.</em></p>

Retirement Income

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Is your retirement planning on track?

<p>What is the secret to successful retirement planning? It’s a daunting question but one we are all destined to face. Some of us will simply put it in the ‘too hard basket’ and end up with an ad hoc approach. Others will want to take a more proactive approach but may not know how to go about it or what steps to take.</p> <p>Macquarie wealth adviser Cindy Excell has worked with many people in exactly this situation. “In my profession I see the thrill of anticipation that people feel about finally being able to do more of the things they enjoy in retirement. But I also see the uncertainty they feel about the planning needed to make it the worry-free time of life that it should be.</p> <p>“Everyone has different priorities and desires, so my role as their financial planner is to help them identify what their ideal retirement will actually look like and then break down the planning steps that will get them there without financial worry.”</p> <p><strong class="bigger-text">One key question</strong><br />To bring your retirement future into sharp focus, Excell says simply ask yourself, “What is the biggest change you would like to make in your life once you're retired?” It’s a question that can uncover so much and can really inform a person about their retirement planning.</p> <p>“For some, it might be a change to where they live, such as moving out of the family home into a different area and different type of living arrangement,” explains Excell. “For others, it might be more about seeing the world and soaking up new experiences.”</p> <p>“It is so critical to have this conversation first because it's only when these desires are uncovered that we can start to plan how these changes will be funded,” she adds.</p> <p>Ultimately, Excell says the aim is to work back from this 'big picture' retirement question, to figure out the building blocks of a retirement budget and the strategy that will make that budget work.</p> <p><strong class="bigger-text">A major misconception</strong><br />When asked about the biggest misconception people have concerning retirement, Excell identified one that really stands out above all others:</p> <p>“Having spoken to hundreds of people about their hopes and fears around retirement, the biggest concern is that they want their money to be safe. This is understandable because they know they have to depend on that money to see them through for many years. The danger in focusing purely on safety, without any regard to growth opportunities, is that you may risk outliving your retirement savings,” Excell explains.</p> <p>“People want to leave work earlier and they are generally living longer, so retirement saving adequacy becomes critical. The rising costs of living and reducing purchasing power must be factored in for planning to be realistic. There may also be unexpected issues such as medical costs or a sudden change of family situation that can have significant financial impacts.”</p> <p>So, what is the best approach? Excell says having a long-term investment strategy is vital to provide growth opportunity, but to also ensure “the investment plan is within their ‘comfort zone’ in terms of their attitude toward risk. A more strategic approach to asset allocation can make such a difference to a person’s portfolio in retirement.”</p> <p><strong class="bigger-text">A smarter strategy for all contingencies</strong><br />Excell shared some of the finer points of setting up the right investment strategy for retirement.</p> <p>“Superannuation is not a ‘set and forget’ type of investment. Markets can be volatile, so positioning your investments carefully, before and after you retire, is essential. This is where working with a qualified professional who can help you manage risk and return is so vital to making retirement savings last.</p> <p>“You need a long-term investment strategy, but you must also have tactical flexibility and a diversified portfolio to cope with market changes. For example, it is important to have a drawdown option in a pension portfolio. This might mean holding some funds in a defensive asset class like cash, so that if there is a market downturn you can avoid selling growth assets, while maintaining income stability. It's these kinds of subtle yet profound planning choices that highlight the value of getting professional advice.”</p> <p><strong class="bigger-text">Taking the first step</strong><br />Excell encourages those approaching retirement to seek advice that will give them a better perspective.</p> <p>“The important thing is to realise that you don’t have to face retirement alone. Find a financial planner who you can trust, who can explain your options and help you understand the ‘big picture’ as well as the finer details of investment planning. This can take much of the worry out of the process and give you a real sense that you are in control of your own destiny."</p> <p>What do you see as the main benefits of seeking professional retirement advice? Share your thoughts below.</p> <p><em>Written by Tom Raeside. Republished with permission of <span><a href="https://www.wyza.com.au/articles/money/financial-planning/is-your-retirement-planning-on-track.aspx">Wyza.com.au</a></span>. </em></p>

Retirement Income

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Should you save or invest?

<p>It might seem like stating the obvious to say there are fundamental differences between saving and investing, but do you actually know what those differences are and how they can impact your financial planning?</p> <p>By definition, saving refers to the practice of setting money aside, usually on a regular basis, to accumulate toward a specific goal, such as a holiday, a home deposit, a car, or perhaps some other less concrete “rainy day” purpose.</p> <p>Investing, on the other hand, is the practice of putting your money in some type of asset or account with the purpose of growing value through returns or capital growth.</p> <p><strong class="bigger-text">Where do you save or invest?</strong><br />The priority with saving is preservation and accessibility, so the vehicle used is normally one which protects your money until it can be applied to the intended purpose. In years gone by this may have meant hiding cash in your sock drawer or putting it in a safe, but these days most of us use a bank account. It may only be earning minimal interest, but the main purpose is simply to keep it secure and easy to access.</p> <p>Investing is focused more on growth or income generation, so the priority is usually to find a vehicle that can deliver those attributes, such as shares, property, or some kind of deposit product that pays interest. This will usually involve limited accessibility and may also involve increased risk of values fluctuating over time.</p> <p><strong class="bigger-text">Should you be saving or investing?</strong><br />The short answer for most people is “both”, but the degree to which you do either is heavily dependent on your situation.</p> <p>If, for example, you are living from pay packet to pay packet without any fallback funds, or if you have significant debts which are out of control, then saving takes on a much greater priority.</p> <p>As a general rule, if you are in that type of situation, you should first focus on:</p> <ul> <li>Saving to build up an emergency fund amounting to at least three months’ income</li> <li>Directing any other discretionary income toward debt repayment until you have debts under control</li> <li>Ensure that you have contingency plans in place to protect dependents against disasters, such as illness, accident, or premature death. This can be done via personal insurance plans, such as income protection and life insurance.</li> </ul> <p>These actions will provide stability within your financial planning and once they are sufficiently catered for, you can then start to invest.</p> <p>Once you are in a position to invest, the next step is to ensure you have a clear picture of your goals and timeframes. Generally, investment goals can be categorised into short, medium, or long-term, and the way that you invest will be heavily dependent on which of these categories your investment goals fall into.</p> <p><strong class="bigger-text">Matching investment types to your goals</strong><br />Due to the fact that most investing involves some degree of risk, it is important to match the type of investment to the goal you have in mind.</p> <p>Short-term investment goals might include anything that is up to five years away, for example, if you are aiming to build up an education fund for a child or grandchild, and you know they will be going to university in five years’ time, then you need to invest in something that you can confidently liquidate in five years without undue risk of losing capital. This might mean primarily investing in cash-based assets such as term deposits or fixed interest investments.</p> <p>If you were to invest in property or shares for such a short term, there would be a real risk that the market may be depressed at the time you want to withdraw, so these would not be wise investment choices.</p> <p>For medium and long-term goals, however, you have more scope to invest in those more volatile asset classes, because historically, they have a better chance of providing real growth over time.</p> <p>A classic example of this is your superannuation. If you have 10 or more years before you need to access the funds for retirement, then you have a substantial timeframe in which to diversify your investment across a variety of assets, including property, shares, and managed funds. Because you don’t have a need to liquidate those investments early, you can ride out any fluctuations with the objective of capturing growth over the full timeframe of the investment.</p> <p>As you get closer to the end of the timeframe, you can gradually switch your investment out of growth assets and into more secure areas, so that you can lock in any of the gains you have made.</p> <p><strong class="bigger-text">Get help to put your strategy together</strong><br />Most of us have a range of things that we might be saving or investing for. This can often mean we need a sophisticated approach to where we allocate funds to gain maximum effect.</p> <p>A financial planner can be invaluable in helping you identify and rationalise all of your short, medium and long-term goals, and can help you map out a strategy that will allocate, manage, monitor, and adjust your strategy over time.</p> <p>What are your ideas on the best ways to save? Share your thoughts below.</p> <p><em>Written by Bridges. Republished with permission of <span><a href="https://www.wyza.com.au/articles/money/financial-planning/should-you-save-or-invest.aspx">Wyza.com.au</a></span>.</em></p>

Retirement Income

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How to make good financial decisions

<p>Is it time to spend, save or splurge? Here are the six most basic questions to ask yourself each time you open your wallet.</p> <p><strong>Can I afford it?<span> </span></strong>This should be the first question you ask when reaching for your credit card. If you have to borrow money to make the purchase, then you probably can’t afford it. Another strategy involves calculating how many hours, days or weeks at work it’ll cost to pay it off.</p> <p><strong>Is this a need, or a want?<span> </span></strong>Before making the purchase, create a mental list to see how much use you’ll get out of it and whether this is a need or simply a want.</p> <p><strong>Are there hidden or ongoing costs?<span> </span></strong>Often the spending doesn’t end with the initial purchase. For example, buying a car involves extra costs such as registration, maintenance and repairs. Be aware of how these will add to the total cost.</p> <p><strong>Will this purchase appreciate/depreciate?</strong><span> </span>New gadgets such as mobile phones often depreciate, so sometimes it’s better to wait before grabbing the latest model.</p> <p><strong>Is it good value?<span> </span></strong>While the cheapest option is tempting, it doesn’t always pay off. For example, if you spend less on a dishwasher or washing machine, you may end up paying more in regular repairs.</p> <p><strong>Will it pay itself off?<span> </span></strong>An investment property can create a rental income, which can help to pay off a loan. Consider the big picture when making decisions – sometimes you need to spend money to make money.</p> <p><em>This article first appeared in </em><span><em><a href="http://www.readersdigest.com.au/money/How-To-Make-Good-Financial-Decisions">Reader’s Digest</a></em></span><em>. For more of what you love from the world’s best-loved magazine, </em><span><em><a href="http://readersdigest.innovations.com.au/c/readersdigestemailsubscribe?utm_source=over60&amp;utm_medium=articles&amp;utm_campaign=RDSUB&amp;keycode=WRA87V">here’s our best subscription offer.</a></em></span></p> <p><img style="width: 100px !important; height: 100px !important;" src="/media/7820640/1.png" alt="" data-udi="umb://media/f30947086c8e47b89cb076eb5bb9b3e2" /></p>

Retirement Income

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How to unlock wealth from your home

<p>Having enough money to fund retirement is a big concern for Australians. The high cost of living can make paying the bills tough, and with the economic implications of an ageing population, the age pension may barely be enough to cover life’s necessities.</p> <p>If you want more than just a basic lifestyle, you’ll likely need more money than the pension or your superannuation can provide, says Andrew Ford, CEO of specialist reverse mortgage lender,<span> </span><span>Heartland Seniors Finance</span>.</p> <p>“Many [Australians] who retire just desire a few of life’s ‘wants’; to travel, to enjoy outings with friends and family, or to occasionally spoil the grandkids,” he says.</p> <p>A reverse mortgage can help you free up the capital you need to live the retirement you want without worry or stress.</p> <p><strong class="bigger-text">Freeing up capital in retirement: the options</strong><br />For many, downsizing is a great way to free up enough capital to fund an active and enjoyable lifestyle, but this option does have its drawbacks. “If you’re attached to your home, and enjoy the shops and services in your local area, downsizing might not be for you,” says Ford.</p> <p>For a house valued at $800k, downsizing could cost $20k or more once you factor in moving costs, agent fees, taxes and conveyancing services from selling your home. The associated costs can quickly add up and exhaust quite a bit of the surplus made from your sold home.</p> <p>However, if you live in a large residence that has become too big for your current needs, especially when it comes to maintenance and/or utility costs, downsizing can still be an appealing way to go as it could mean reducing those expenses. But it’s important to think about what living arrangement makes the most financial sense.</p> <p>Alternatively, refinancing an existing home loan to a reverse mortgage loan or taking out a new reverse mortgage loan can be a more prudent option. This type of mortgage has been especially developed for people over 60 to help them free up capital without the stress of continually having to service the loan.</p> <p><strong class="bigger-text">So, how does a reverse mortgage work?</strong><br />A reverse mortgage allows those on a limited income to continue to live in and own their own homes without needing to make any repayments on that loan. Customers simply take a loan against their property, and the debt and interest is capitalised and repaid from the future sale of the property.</p> <p>A common reason for taking out a reverse mortgage is to consolidate debts. “We get a lot of customers who come to us with credit card debts, or they have an existing home loan that needs refinancing. Heartland Seniors Finance can help those customers free up enough capital from their homes to give them peace of mind in their retirement,” says Ford.</p> <p><strong class="bigger-text">How much money can I access?</strong><br />The amount of money you can access is calculated using a percentage called a loan to value ratio (LVR), applied to the value of your property. The LVR is based on the age of the youngest loan applicant.</p> <p>A 60-year-old applicant can borrow 15% of the value of their home, while a 70-year-old can borrow 25%.</p> <p>For example, on a home valued at one million dollars, a 65-year-old with a LVR of 20% could borrow up to approximately $200k.</p> <p><strong class="bigger-text">How can you access your funds?</strong><br />There are multiple options for receiving funds, says reverse mortgage broker specialist Darren Moffatt of Seniors First. “Customers can take a lump sum payment such as a $100k loan or have the option of drawing down funds from a line of credit at their convenience,” says Moffatt. “Often customers will do both: they will take a lump sum of around $40k and have available a credit facility to use when they need it.”</p> <p>“We’re not always talking about a lot of extra money but these extra funds can have a transformational effect on the lives of older Australians,” he adds.</p> <p><strong class="bigger-text">Will it affect my age pension?</strong><br />While Moffatt says reverse mortgage loans usually don’t affect the age pension, there are a few considerations worth noting. “It may be beneficial to have funds drip fed to the borrower so that a large amount of capital sitting in an account won’t be included in assets test under the pension,” says Moffatt.</p> <p>“It’s also important to do your own research and enquire with Centrelink how a reverse mortgage may affect your payments,” he advises.</p> <p><strong class="bigger-text">Do I qualify for a reverse mortgage?</strong><br />There are a few requirements you will need to satisfy says Moffatt. “You need to be at least 60 years of age, you need to get your property valued and the property needs to be a good security (that is have nothing wrong with it). Ideally, you also need to have good credit,” he explains.</p> <p><strong class="bigger-text">What fees can I expect?</strong><br />There is an establishment fee of $495 and a fee for you to obtain your own legal advice as a requirement for the loan application. There could also be broker’s fees. “All in all, applicants should expect about $1-2k in start-up fees,” Moffatt says.</p> <p><em>Written by <span>Dominic Bayley</span>. Republished with permission of <span><a href="https://www.wyza.com.au/articles/money/financial-planning/how-to-unlock-wealth-from-your-home.aspx">Wyza.com.au</a></span>. </em></p>

Retirement Income

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How to self-fund your retirement

<p>With the social security system under increasing pressure from an ageing population, self-funded retirees may feel like they are being snubbed when it comes to government support. After faithfully paying taxes all their lives, it seems only fair that they should receive some level of support to assist with certain needs.</p> <p>Fortunately, there are some avenues where support is available — if you know where to look. We explore some options that can help put you on the right track.</p> <p><strong class="bigger-text">Commonwealth Seniors Health Card</strong><br /><a rel="noopener" href="https://www.humanservices.gov.au/individuals/services/centrelink/commonwealth-seniors-health-card" target="_blank"><span>This card</span></a><span> </span>entitles the holder to a wide variety of concessions, including low cost health care, and potential discounts from state or territory governments and local councils for utilities, rates, and public transport.</p> <p>The card is available to those of age pension age. There is no asset test but you are subject to an income-based means test. Currently, to pass the income test, you must earn no more than $53,799 a year if you’re single, $86,076 a year for couples, and $107,598 a year for couples separated by illness, respite care, or prison. Add $639.60 to these amounts for each child in your care.</p> <p><strong class="bigger-text">State Seniors Card</strong><br /><a rel="noopener" href="https://www.australia.gov.au/content/seniors-card" target="_blank"><span>This card</span></a><span> </span>is issued by each state and territory, though it can be used interstate for some businesses and services. The benefits vary in each state but are generally quite substantial. Generally speaking, if you are over 60 and work less than 20 hours per week, you will qualify. The big plus is that it is not means-tested — this makes it well worthwhile for self-funded retirees to investigate further.</p> <p>Discounts can include public transport and government concessions, as well as reductions from participating businesses on such things as holidays, travel, hospitality, automotive service, professional services, and shopping. Check your state’s seniors card website to get specifics on discounts and periodical special offers.</p> <p><strong class="bigger-text">Pension Loan Scheme</strong><br /><a rel="noopener" href="https://www.humanservices.gov.au/individuals/services/centrelink/pension-loans-scheme" target="_blank"><span>This may be an option for retirees</span></a><span> </span>who are excluded from the full age pension due to the income and assets test, and have substantial equity in their home or in an investment property. By using your property equity as security, you may qualify for a non-taxable loan to boost income.</p> <p>The loan amount is not provided as a lump sum, rather as a fortnightly payment which can be up to the equivalent of the age pension. This can be an efficient way to translate some of your assets into usable income without having to sell your property, but you do need to think seriously about the impact of the loan and interest charges eroding your home equity.</p> <p><strong class="bigger-text">Carer payment</strong><br />If you have a partner in need of care, you may be eligible for a<span> </span><a rel="noopener" href="https://www.humanservices.gov.au/individuals/services/centrelink/carer-payment" target="_blank"><span>carer payment</span></a><span> </span>but it is dependent on an income and assets test. Provided the person receiving care does not get a pension, you may qualify if their income is less than $112,006 a year and their assets (not including their home) are less than $691,000.</p> <p><strong class="bigger-text">Department of Veterans Affairs</strong><br /><a rel="noopener" href="https://www.dva.gov.au/" target="_blank"><span>The Department of Veterans Affairs</span></a><span> </span>may provide benefits such as health cards and income supplements to veterans, and their widow(er)s and dependants. Details about eligibility and compensation are outlined in the<span> </span><a rel="noopener" href="https://www.dva.gov.au/benefits-and-payments" target="_blank"><span>benefits and payments section</span></a><span> </span>of their website.</p> <p><strong class="bigger-text">Commonwealth Home Support Programme</strong><br /><a rel="noopener" href="https://www.myagedcare.gov.au/help-home/commonwealth-home-support-programme" target="_blank"><span>This program</span></a><span> </span>is designed to provide assistance for those who may have difficulties with everyday activities, but want to continue living in their own home as independently as possible. Self-funded retirees are subject to a financial assessment to determine whether an<span> </span><a rel="noopener" href="https://www.myagedcare.gov.au/costs/help-home-costs/income-assessment" target="_blank"><span>income-tested care fee</span></a><span> </span>may be required.</p> <p><strong class="bigger-text">Planning ahead is always the best option</strong><br />While accessing support in retirement is always helpful, there is no substitute for creating your own financial independence before you retire. To do that successfully, you need to consider questions such as:</p> <ul> <li>Can I afford the lifestyle I want?</li> <li>How much will be enough to retire on?</li> <li>How can I best invest to maximise my retirement savings?</li> <li>How can I structure my financial affairs to maximise social security entitlements?</li> <li>What can I do to improve my retirement savings before I retire?</li> </ul> <p>These questions can be quite daunting and complex to answer, so how should you tackle them?</p> <p><strong class="bigger-text">Planning retirement is like planning a holiday</strong><br />Think of how you go about planning a holiday: you pick a destination, decide what sights you want to see, work out a daily spending allowance, choose the accommodation, and book your flights. Typically, you would use the skills and resources of a travel agent to help get the best prices, and to determine the overall cost, so that you can plan how much you need to save and to ensure your trip goes smoothly. Trying to go it alone could turn your dream escape into a nightmare.</p> <p>Planning your retirement works in a similar way. Talking to a financial expert can give you the guidance you need to assess your ongoing income needs, as well as all the other lifestyle costs that you want in your ideal retirement — such as holidays, recreation, and special purchases. They can then project how much you need to save and assist in creating an appropriate investment strategy to get you to your retirement “destination” securely.</p> <p>In many ways, retirement is just like a never-ending holiday, so it is essential to plan it professionally to maximise your enjoyment and maintain your living standards.</p> <p>What do you look forward to most about retirement? What do you worry about most? Share your thoughts below.</p> <p><em>Republished with permission of <span><a href="https://www.wyza.com.au/articles/money/financial-planning/how-to-self-fund-retirement.aspx">Wyza.com.au</a></span>. </em></p>

Retirement Income

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Options for boosting income during retirement

<p>Awareness about planning for retirement income these days is perhaps greater than ever. We are constantly reminded by Government and media about the growing burden of the age pension and the increase in life expectancies. The need to self-fund retirement is therefore becoming increasingly important.</p> <p>Of course the ideal situation is to plan ahead for retirement as early as possible and as thoroughly as possible. That means projecting what your spending needs will be in retirement, including:</p> <ul> <li>your everyday expenses, such as food, utilities, transport and clothing</li> <li>your lifestyle costs, such as sports, hobbies and the occasional holiday</li> <li>capital expenses to fund major one-off purchases, such as cars and home repairs, and</li> <li>a contingency fund for emergencies.</li> </ul> <p>The reality, however, is that some of us may leave our run too late or may not be able to put aside as much for retirement as we would like. Even those who do plan carefully and save faithfully for retirement may be hit with unpredictable costs that they did not identify in their planning.</p> <p><strong>What can create extra expenses?</strong><br />Additional expenses in retirement may occur for a variety of reasons. It may be an invitation from some friends to join them on an overseas trip. Or perhaps you decide you want to add an indoor/outdoor room to the house for family entertaining. It could even be a desire to help out children or grandchildren with the purchase or a car, or assistance with a home deposit or school fees. Your budget may not allow for such major expenditure, but there may be other options if such objectives are important to you.</p> <p><strong>A limited return to work</strong><br />It may not be for everybody, but a limited return to some sort of paid employment may be an option to start funding a special goal. This can be an attractive option if you have been missing the mental stimulation and social aspects of the work environment, so perhaps some part time or contract work for an old employer or client may be worth pursuing.</p> <p>Alternately, it could be a completely different field to your previous employment, such as a local retail store, school or club. You may only need to do a short stint or two, or maybe allocate a day or two a week – whatever suits your retired lifestyle.</p> <p><strong>Start a hobby business</strong><br />If you don’t want to return to working for someone else, why not turn one of your personal hobbies or interests into an income earning opportunity? If you enjoy gardening, for example, why not offer your services in the local neighbourhood and earn some ready cash doing something you love. This has the advantage of letting you control the amount of work you take on and when you do it.</p> <p>Local markets and car boot sales may be an option for selling some of your handiwork, such as woodwork, jewellery, garden produce or baked goods. The same venues can also be good places to make some cash from the unused items you have cluttering up the house or garage.</p> <p><strong>Join the sharing economy</strong><br />You can put your assets to work by joining the growing number of people who take part in the sharing economy. Perhaps your home is big enough to start up a bed and breakfast or rent out a room on a more permanent basis. You could also make use of your car by becoming an Uber driver, which allows you to set your own hours and discriminate on which customers you choose.</p> <p><strong>Accessing home equity</strong><br />If earning income doesn’t particularly grab you, the other alternative is to look at ways of accessing some of the value of your home. If your home is actually bigger than what you need, then perhaps down-sizing is an option. You end up with a more manageable residence with lower maintenance costs and you free up some of the capital that has been locked in your home, which you can then use for lifestyle objectives.</p> <p>If selling the home is not desirable, but you still want to access some of your equity, a reverse mortgage may be an option. A reverse mortgage is basically a loan from a financial institution that is made against the value of your home equity. Unlike a normal mortgage, a reverse mortgage gives you the option not to make repayments and let interest accrue instead.</p> <p>While a reverse mortgage may assist cashflow in the short term, you need to bear in mind that the compounding interest may quickly build up and eat into your equity. When you eventually come to sell the home you may end up with a nasty surprise in the amount that the financial institution will need to be paid back out of the sale proceeds.</p> <p>Entering such arrangements needs to be done with caution, a clear goal in mind and a careful analysis of how it will impact your future income and estate plans. You need to determine whether you will be able to pay back interest out of your other income, or alternately whether you are prepared to sacrifice a sizeable chunk of your equity when the home is eventually sold, in order to pay back the loan. A reverse mortgage may also impact your pension entitlements.</p> <p>To help assess the risks and whether a reverse mortgage is suitable for your needs, it is best to get some professional advice to help you weigh up the pros and cons.</p> <p><strong>Pension Loans Scheme</strong><span> </span><br />An alternative to a reverse mortgage, which may be more suitable if your needs are relatively modest, is the Pension Loan Scheme provided through the Department of Human Services and the Department of Veterans' Affairs. This scheme may provide you with a top-up to your basic pension amount in the form of a loan with an economical interest rate.</p> <p><strong>Planning is the key</strong><br />Whether you are still saving for retirement or are already in retirement, planning and seeking competent advice is integral to ensuring you maximise retirement income. A financial planner can help you assess your lifestyle priorities, retirement goals, current financial situation and social security entitlements, so that you can develop a clear strategy that puts it all together.</p> <p>What ideas can you share for boosting retirement income? Let us know below.</p> <p><em>Written by Bridges. Republished with permission of <span><a href="https://www.wyza.com.au/articles/money/financial-planning/options-for-boosting-income-during-retirement.aspx">Wyza.com.au</a></span>. </em></p>

Retirement Income

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How to avoid buyer's remorse in retirement

<p>We have all heard a story about someone who moved to a retirement community and then suffered buyers regret. Another kind of ‘buyer regret’ is not making the move sooner.</p> <p>So, what do you need to know before making such a big decision? Realising this is an issue, two industry insiders, Rachel Lane and Noel Whittaker teamed up to write<span> </span><em><a rel="noopener" href="http://t.dgm-au.com/c/185116/71095/1880?u=http%3A%2F%2Fwww.booktopia.com.au%2Fretirement-living-handbook-rachel-whittaker-noel-lane%2Fprod9780987440464.html" target="_blank"><span>The Retirement Living Handbook</span>.</a></em></p> <p>Both Noel and Rachel have heard these stories again and again. Rachel says, “The biggest problem with both types of regret is that it is too late to do anything about it. You can’t wind back the clock and move into the village sooner and if you are at the point of leaving the village it is too late to negotiate a different financial arrangement.”</p> <p>Noel adds, “What they needed was someone to help identify the village or villages that would meet their lifestyle needs and explain the legal and financial aspects to them well before they chose a village.” Of course, that’s easier said than done as many of the legal and financial arrangements are complicated.</p> <p><strong>How does it work?</strong></p> <p>Retirement communities can be broadly grouped into Retirement Villages and Over 55 Communities (sometimes called Manufactured Home Parks). Retirement Villages operate under the relevant state or territory legislation, often<span> </span><em>The Retirement Villages Act</em>, which set age requirements and deal with some but not all financial arrangements, while a small number operate under residential tenancy laws. Over 55’s on the other hand operate under caravan park or residential tenancies arrangements or a combination of the two. </p> <p><strong>Legal issues</strong></p> <p>The legal contract for a retirement village unit can take a number of forms, from strata title to more common leasehold and licence arrangements through to company share and unit trust arrangements where the right to occupy a unit is granted in exchange for the purchase of shares in a company or units in a trust. The biggest difference between a retirement village and an over 55’s community is that the contract is over the land rather than a unit - the purchaser buys the unit and has a leasehold or lease over the land.</p> <p>Of course there is a very big difference between having a 12 month lease and having a 99 year leasehold arrangement. It also creates the very interesting situation of being a homeowner and a tenant at exactly the same time. The form of legal ownership the person has will dictate their rights and responsibilities in relation to their unit and the costs associated with it while they live in the community and after they leave, so it is important to understand.</p> <p><strong>Be aware of extra costs</strong></p> <p>The costs associated with retirement communities can be summarised as the ingoing, the ongoing and the outgoing. The ingoing is the amount the person pays for their right to occupy their unit together with other costs such as contract preparation fees or stamp duty.</p> <p>The ongoing costs of living in a retirement community will relate to the costs associated with the facilities and management of the community, in a retirement village these are often called general service charges or recurrent charges and in over 55 communities they are known as site fees. Of course you still have your own personal expenses too.</p> <p>In many retirement communities the operator delivers (or engages with external providers to deliver) extra services, such a domestic help, meals and in some cases care. These services are normally offered on a user pays basis and are in addition to the standard charges.</p> <p>Doing a budget that incorporates all of the costs together with your pension entitlement, rent assistance and other income is a good idea. The cost of leaving a retirement community is the aspect that normally causes the greatest confusion. There are many different exit fee models, most are based on either the purchase price or the sale price and are for a percentage multiplied by the number of years you stay in the village.</p> <p>A common model historically has been 3 per cent per year for 10 years based on the sale price. In more recent times, exit fee models have tended to be higher - anywhere between 35 per cent and 50 per cent is not uncommon. What many people fail to appreciate is that there is more to the exit fee calculation than just the percentage based cost, often referred to as the Deferred Management Fee or DMF.</p> <p>There can be sales commissions to the village or to an agent that the resident appoints and refurbishment costs to bring the unit up to the current standard within the village. Understanding all of the fees and charges and putting them into dollar terms is important, although it often involves the imperfect science of predicting how long you will live in the village and what your unit will be worth when it sells.</p> <p><strong>Expert tips</strong></p> <p>To help people navigate the maze and avoid some of the traps, Noel and Rachel wrote<span> </span><span><em>The Retirement Living Handbook</em></span><span> </span>which covers all of the important aspects of moving to a retirement community, from finding the right retirement community to the different forms of legal contract and financial arrangements through to the impacts on pension entitlement and eligibility for rent assistance.</p> <p>There’s more than a dozen case studies from real Australian retirement communities so you can see how the concepts play out in practice, and at the back of the book is a directory of over 1,000 retirement communities broken down by lifestyle with a lexicon of key features to help readers identify the retirement communities that may best suit you.</p> <p>What are the biggest concerns you have about retirement? Join the conversation below.</p> <p><em>Republished with permission of <span><a href="https://www.wyza.com.au/articles/property/insider-tips-for-buying-into-an-aged-care-facility.aspx">Wyza.com.au</a></span>.</em></p>

Retirement Income

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Financial security vs financial freedom

<p>On the subject of financial planning, terms such as “financial security” and “financial freedom” often get thrown around loosely. On the surface, they may seem like generalised terms that roughly mean the same thing, but when you dig deeper, there is a dramatic difference between them. While both are important and valid financial goals, understanding that difference could have a profound effect on your financial future.</p> <p><strong class="bigger-text">So what is financial security?</strong><br />Essentially, financial security focuses on conservation. If you are employed and earning an income, for example, financial security is all about ensuring that the standard of living you and your family enjoy is not put under threat.</p> <p>For a start, this might mean ensuring that you are dedicated to your work, and take steps to improve your abilities and skills, so that your prospects for retaining your job or business and earning a greater income are strong. Beyond that, it might mean taking steps to provide a fallback position, such as saving three to six months’ of income in an emergency fund to cater for a sudden medical situation, loss of employment, or family crisis.</p> <p>At a broader level, ensuring financial security should also include a personal insurance plan, which can replace your financial value to your family if you were to suddenly die or become permanently disabled. If you suffer an injury or illness that prevents you from earning income for an extended period, income protection insurance can offer extra security for you and your family.</p> <p>Financial security also has relevance for your long-term saving and retirement planning. You might say that financial security in retirement means being able to independently afford the basic lifestyle requirements of shelter, food, clothing, transport, and other general living expenses.</p> <p>At its core, however, financial security is conservatively focused on maintaining what you already have in the event of a crisis, sickness, or retirement. While certainly a worthy and sensible goal, it doesn’t look beyond those needs, or toward more ambitious targets.</p> <p><strong class="bigger-text">Financial freedom is quite different</strong><br />If you are financially secure, you can certainly get by — but what if you want a bit more out of life than just preserving a basic existence? Financial freedom, in essence, means having the resources to make decisions about what you buy, do, or see without having to worry about impacting your basic living standards in the future. It means having the freedom to fulfil dreams of where you live, how you spend your time, which travel destinations you can experience, and how you can support your family.</p> <p>This kind of freedom is something that very few people are able to achieve, but it is not limited to those who are born into money, inherit money, or win the lottery. Financial freedom can be achieved by an ordinary working person if they have the vision — and employ the methods, planning and habits — to get them there.</p> <p><strong class="bigger-text">It starts with an attitude</strong><br />Financial freedom can be a realistic goal for many of us but it won’t happen by accident. The formula for achieving financial freedom involves several key aspects that need your deliberate action and attention:</p> <ul> <li>The fundamental characteristic of those who build their own financial freedom is an attitude and a belief that they can achieve a lifestyle beyond their current circumstances. This means having the confidence to dream big and visualise those specific things that you want to enjoy in life.<br /><br /></li> <li>Being clear about your dreams, and putting them down in black and white is the next step. Really owning your dreams in this way will give you the motivation and impetus to take action toward them.<br /><br /></li> <li>You then need to break down the financial requirements needed to get you to your goals — your financial plan. This is where the nuts and bolts are worked out on issues such as budgeting, saving, and investing. Without a solid financial plan, financial freedom will only ever be wishful thinking.<br /><br /></li> <li>Finally, you need to engage the help of those who have greater expertise than you. It may be hard for some of us to accept that we can’t do everything on our own, but the fact is that those who have really succeeded in any aspect of life have one common characteristic; they surround themselves with people who know more than they do.</li> </ul> <p>In terms of financial freedom, this means engaging financial professionals, such as an accountant and a financial planner, who’s expertise you can draw on to help you articulate and prioritise your goals, construct a sophisticated financial plan, research the best opportunities for investment, balance the need for capital preservation and capital growth, maximise your taxation and social security entitlements and review and adjust plans to adapt to changing needs and situations.</p> <p>If you are not simply satisfied with having financial security and you want true financial freedom, the potential is there for you, but there are no short cuts. Take action on all the steps outlined here and you can make it happen.<br /><br />What does financial freedom mean to you? Share your thoughts below.</p> <p><em>Republished with permission of <a href="https://www.wyza.com.au/articles/money/financial-planning/financial-security-vs-financial-freedom.aspx"><span>Wyza.com.au</span>.</a></em></p>

Retirement Income

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What you need to know about loyalty card and royalty reward schemes

<div> <div class="replay"> <div class="reply_body body linkify"> <div class="reply_body"> <div class="body_text "> <p>It can be hard figuring out whether or not your loyalty cards have tangible rewards or not. At this point, you’re on autopilot when your local grocery stores ask whether or not you have a loyalty card.</p> <p>Gary Mortimer, Associate Professor at the Queensland University of Technology Business School, says we’re not alone.</p> <p>"If you're a bit like me and habitually, passively scan your loyalty card without really thinking about what you're doing, then it's probably not worth your time having one," he says.</p> <p>"All you're doing is simply providing the retail with free information and free data on your shopping behaviour."</p> <p>However, if you’re clever about the way you use your cards, you can redeem points for other products and flights.</p> <p><strong>Supermarket and store loyalty cards</strong></p> <p>We’ve all seen them across the larger grocery retailers and throughout smaller businesses as well. They’re rewarding you for your repeat business, and sometimes, it’s not that bad of a deal. A free eyebrow wax? Sure, why not!</p> <p>However, Jason Pallant, who is a lecturer in Marketing at Swinburne Business School has warned us of the pitfalls when it comes to repeat consumer behaviour.</p> <p>"I certainly don't think there is often great value in changing your behaviour or deliberately buying something you didn't need or want just to get loyalty benefits."</p> <p>Dr Pallant adds, "If you're doing it anyway, get rewarded. But don't change your behaviour hugely because of a loyalty program."</p> <p>There are some benefits to having loyalty cards, as you can get special offers and discounts that non-card holders don’t. However, you have to spend a lot to get a little back and you might not end up earning enough points for a reward just based on your normal spend.</p> <p><strong>Credit card reward points</strong></p> <p>Credit cards with reward programs, including cards that are offered by stores or airlines, might sound similar to loyalty cards but they couldn’t be more different.</p> <p>As credit card issuers use reward programs in order to attract your business, the people that generally use them can fall into two camps, according to Steve Worthington, who is an Adjunct Professor at Swinburne University’s Faculty of Business and Law.</p> <p>"You can divide credit card holders into two basic camps — there's transactors, that is those who use their card and pay off in full every account period, so they never pay interest," Professor Worthington says.</p> <p>"Then there's the revolvers who do pay interest because they don't pay it off in full and they therefore have to pay interest.</p> <p>"If you're a transactor, you might be able to use a reward card and do fairly well out of it. But if you're a revolver, I would argue that you need to concentrate on not paying interest, rather than collecting reward points."</p> <p>For some, the allure of combining points with airline point systems is the whole reason they’re using the reward system. For others, cashback once you reach a certain amount of points is enough to keep them with the reward program.</p> <p>The cons are more straightforward, with high annual fees, not all spending being eligible for reward point collection, as well as feeling like you’re encouraged to spend more to earn points.</p> <p><strong>Airline points </strong></p> <p>With the promise of free travel and upgraded seats, for those who travel a lot, airline points seem like a no brainer.</p> <p>However, before you dive right into it, it’s a good idea to check how many free points need to be redeemed for a free flight. You might find it’s an astronomical amount.</p> <p>Dr Pallant encourages people to be aware of the hierarchy programs often attached to airline point systems. These programs often encourage members to spend more than they would usually in order to obtain the next level of membership available.</p> <p>"I know people who have taken trips because it was coming to the end of their 12-month cycle," he says.</p> <p>"It's interesting because you can pay for the things that having the higher status gives you, such as a seat choice and more luggage, and often it'll be cheaper [to purchase these with your own money] than all the money you spend to get the status."</p> <p>Do you use any loyalty cards or royalty reward schemes? Do you think it’s worth it? Let us know in the comments. </p> </div> </div> </div> </div> </div>

Retirement Income

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Save Money In Ways You've Never Thought Of Before With These 5 Tips

<p>It can be tricky knowing when to get started, especially when you don't know where to begin. These tips aim to help you get started.</p> <p><strong>1. Find your hidden savings accounts</strong></p> <p>Take your savings wherever you find them, even if they aren't in the bank.</p> <p>"You can definitely start with the change in the middle console of your car," said Sheldon Crow, branch manager at Bellco Credit Union in Arvada, Colorado.</p> <p>"If it works for you, that is a savings account."</p> <p>Guys who toss their pocket change each night into a jar or drawer may be astonished at how much they've piled up in change.</p> <p>Do you have gift cards lingering in your wallet, a pile of tips you haven't bothered to deposit, store credit, a cash-back account you're ignoring, or a reloadable charge card you forgot you reloaded?</p> <p>Maybe you let your PayPal or Venmo account balance increase whenever you sell something on eBay or a friend pays you back for a night out.</p> <p>Honor your cash-stashing habits as creative ways to save money, whatever they are.</p> <p><strong>2. Pick an inconvenient bank</strong></p> <p>It's great to do all your banking in one place, especially if you bank online.</p> <p>But when the money you saved is just a few keystrokes away, even determined savers can give in to the temptation to make a quick transfer to cover a bill, or withdraw savings from the ATM "just this once."</p> <p>So make it a challenge to access that money.</p> <p>Deposit savings in a different institution from your everyday accounts.</p> <p>Shred the ATM card so you have to bank in person.</p> <p>Pick one that's far away from your home or work, with inconvenient hours.</p> <p>Choose a bank that charges big fees for withdrawals or a brokerage that makes you wait 48 hours for a transfer. </p> <p><strong>3. Pay it off—but keep paying in</strong></p> <p>If you're finally making your last car payment, or paying off a credit card or a student loan, avoid the temptation to bump up your spending or accrue new debt.</p> <p>Instead, divert into savings the same amount you've been paying all these months.</p> <p>Such money-saving tips don't change your standard of living, so you won't notice any difference in your budget, but you'll be paying yourself instead of a creditor. </p> <p><strong>4. Set aside a portion of every windfall</strong></p> <p>Congrats, you got a bonus (or a big tax refund or a check from a relative).</p> <p>Good for you! Use this rule of thirds: Put one-third into savings, one-third to reduce debt, and the final third to spend on something wonderful for yourself.</p> <p>Don't save the whole amount, which will make you feel virtuous, but deprived.</p> <p>This plan gives you balance—you allocate some of your unexpected cash to the past (paying off debt), some to the future (saving), and the rest on a present for yourself. </p> <p><strong>5. Open a roundup savings account</strong></p> <p>Understanding that people need encouragement to save, the financial industry came up with a clever and painless way to do it: automatic savings.</p> <p>Every time you use your debit card to make a purchase or pay a bill, these accounts round up the purchase amount to the nearest dollar, transfer the difference from checking to savings, and keep track of how much you're putting away.</p> <p>It's just like your change jar, only virtual.</p> <p>Bank of America calls their product the "Keep the Change" Savings Program, and many banks and credit unions offer something like it.</p> <p><em>Written by Lisa Greim. This article first appeared in <a href="http://www.readersdigest.com.au/money/save-money-ways-youve-never-thought-these-10-tips">Reader’s Digest</a>. For more of what you love from the world’s best-loved magazine, <a href="http://readersdigest.innovations.com.au/c/readersdigestemailsubscribe?utm_source=over60&amp;utm_medium=articles&amp;utm_campaign=RDSUB&amp;keycode=WRA87V">here’s our best subscription offer</a>.</em></p> <p><img style="width: 100px !important; height: 100px !important;" src="/media/7820640/1.png" alt="" data-udi="umb://media/f30947086c8e47b89cb076eb5bb9b3e2" /></p>

Retirement Income

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The Centrelink conman who scammed Australia for 30 years

<p>A conman who had been scamming the Australian government for more than three decades is finally set to be deported, reports said.</p> <p>The serial fraudster, who went by the name Michael Boghdadi Asaad, had scammed Centrelink for social security payments totalling to almost $90,000 using a false identity.</p> <p>According to <a href="https://www.dailymail.co.uk/news/article-6457237/Michael-Boghdadi-Asaads-daughter-vows-confront-Centrelink-conman-father-life-crime.html">Daily Mail Australia</a>, Asaad is now being held at Villawood Detention Centre in Sydney and set to be deported.</p> <p>Asaad entered Australia in 1985 on a Canadian passport under the name of Rick Michaels. He was given an Australian birth certificate in 1992 after claiming he was born in Tasmania, and received a total of $89,161.44 in Centrelink benefits between 2002 and 2009.</p> <p>The conman had also been imprisoned for fraud-related offences in 1994, 2004, 2009 and 2010. This included a case where Asaad borrowed more than $35,000 from businesses without disclosing his bankruptcy, while also falsely telling creditors that he had graduated from Harvard with an MBA and worked for several big US banks.</p> <p>In 2017, FBI fingerprint files revealed Asaad’s true identity as Farouk Asaad, a convict with an 18-year criminal record who was deported from the US. Reports said Asaad went in and out of jail between 1971 and 1987 on charges ranging from bank fraud to embezzlement.</p> <p>Asaad’s son, Michael Boghdadi Asaad Jnr, also made headlines in 2009 when he assaulted<span> </span><em>Today Tonight</em><span> </span>reporter Damien Hansen. According to court documents, Hansen was filming a story on Asaad’s family in Paradise Waters, Queensland when Asaad Jnr punched him twice in the face and destroyed his camera and equipment.</p> <p>The Department of Home Affairs refused to comment on Asaad’s case. </p> <p>“Foreign nationals who do not hold a valid visa will be liable for detention and removal from Australia,” said a spokesman for the department.</p>

Retirement Income

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The major changes you need to know starting from 1 January 2019

<p>With the new year right around the corner, you start to plan how you’re going to do things differently. But you’re not the only one who plans to bring about change.</p> <p>With the start of a new year, the government uses the occasion to introduce new laws and regulations, fees and charges, and taxes and benefits.</p> <p>So to prepare for January 1, 2019, here is what you need to know.</p> <p><strong>Increase in train fares</strong></p> <p>Victoria will see a spike in train fares by 2.2 per cent starting from January 1. The increase is according to the consumer price index and the government claims it is the lowest fare rise since 2014.</p> <p>A two-hour ticket which previously cost $4.30 will now be $4.40, with an all-day ticket costing travellers $8.80. Concession tickets will be priced at $2.20 and $4.40.</p> <p>A seven-day Myki pass will cost passengers $44 while concession passes will set commuters back $22. Annual passes will be increased to $1722.50 and if travelling on concession, then it will cost $861.25.</p> <p>Those residing in Brisbane should also expect an increase in fares starting from January 7, with adult tickets increasing from $4.70 to $4.80. But concession prices will remain the same at $2.40.</p> <p>Eight zone tickets will cost $28.90 for adult passengers and $14.50 for concession.</p> <p>Those who carry a TransLink Go card will pay $2.65-$3.31 for a single-zone adult fare and $1.32-$1.66 for concession holders.</p> <p>The eight-zone charges will increase to $15.97-$19.96 for adults and $7.98-$9.98 for concession.</p> <p><strong>Power price cuts</strong></p> <p>Customers who are with AGL in Victoria will see a decrease in electricity prices as they plan to come down by 1.6 per cent starting from January 1.</p> <p>Average households will see a saving of $23 a year and $60 for small businesses. Gas prices are also planned to become cheaper as families will save $11 and small businesses $56.</p> <p>Those living in NSW, ACT, Queensland and South Australia, and are owners of a concession card, will have an automatic 10 per cent discount applied to their electricity bill from January 1.</p> <p>The four states are also looking at an increase in gas prices, with households paying an extra $69 a year. But if you want a way around the hefty cost, then EnergyAustralia recommends switching to the Secure Saver plan which locks in 2018 rates for two years.</p> <p><strong>NAB’s ATM fees</strong></p> <p>If you’re an NAB customer then prepare yourself as from January 1, National Australia Bank members will be forced into paying $2 from over 3000 ATMs that used to be free since 2009.</p> <p>The fee comes after NAB ended its partnership with RediATM, but a spokesperson from NAB says that there will still be 7000 ATMs around the country that customers can use free of charge.</p> <p>“NAB has decided to no longer be part of the RediATM network from January 1, 2019,” they said. “The way Australians are using cash is changing fast with ATM use declining by 20 per cent over the past five years.”</p> <p><strong>Qantas Frequent Flyer changes</strong></p> <p>Members of Qantas’ Frequent Flyer program will not be able to earn points by booking meals from January 1, as the Australian carrier will be putting a stop to its Qantas Restaurants scheme.</p> <p>The airline partnered with TripAdvisor-owned company Dimmi.com.au, which rewarded members with points if they booked with one of over 4000 restaurants.</p> <p>“Due to changes in the program, from January 1, 2019 you will no longer be able to book a table or earn points via Qantas restaurants,” the website read. “You can book a table up until December 31 2018 and dine until January 31 2019.”</p>

Retirement Income

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Why is the Australian government still paying the pension to 6000 dead people?

<p>Australian pensioners over 80 years old will soon have to produce a “proof of life certificate” to continue receiving the pension.</p> <p>The changes, which will come into effect from July 1, will mean that expats will have to go to an Australian embassy or consulate every two years to register that they are still alive and entitled to receive the payment.</p> <p>The change follows the recent revelation that thousands of deceased expats continued to receive their pension.</p> <p>Speaking about the major discrepancy, Social Services Minister Paul Fletcher, said: “We believe we will identify about 6000 people living overseas who are dead or whose families are wrongfully receiving taxpayer money.”</p> <p>Based on average death rates, the Government predicts the new procedure will save $150 million over four years.</p> <p>Mr Fletcher said the proof of life certificates were a fair way to make sure pension payments are only going to eligible recipients.</p> <p>"Countries like the UK, Germany, Netherlands, France and Italy all have systems in place to verify whether a pensioner living overseas is still alive and we're now going to introduce a similar system," he said.</p> <p>"We do have a duty to be careful and responsible with taxpayers' money and so it's appropriate to have a process in place to check that where a pension is being paid that that person continues to be alive."</p> <p>Until now, the government has relied on the voluntary reporting of an overseas death by a family member or friend, allowing many deaths to go unnotified.</p> <p>“The most likely explanation is that many Australians who were living overseas on a pension have died - but that has not been made known to the Government and we are continuing to pay their pension,” he said.</p> <p>“In some cases it could be fraud. In others, it could be that the former Australian pensioner's family incorrectly think that they remain entitled to receive the pension formerly paid to their loved one.”</p> <p>Expat pensioners will be given 13 weeks to tell the government they are alive before their payment is cancelled. </p>

Retirement Income

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The outrageous advice Centrelink just gave this 55-year-old woman

<p>A devoted wife has been advised by Centrelink to divorce her husband of more than 20 years as he suffers through a devastating stroke.</p> <p>Wayne Mitchell, a former PDHPE teacher and a man who held a passion for sport, has been left unable to walk and talk after suffering from a stroke in August.</p> <p>Requiring round the clock care, the 55-year-old is forced to live in a nursing home which is proving to be a huge expense for his family.</p> <p style="text-align: center;"><img style="width: 0px; height:0px;" src="/media/7821999/1.jpg" alt="" data-udi="umb://media/5884b4ca6eba43739a8a96cb97801e5b" /></p> <p style="text-align: center;"><em>Photo: <a href="https://www.9now.com.au/a-current-affair/2017">A Current Affair</a></em></p> <p>Sitting down with <em><a rel="noopener" href="https://www.9now.com.au/a-current-affair/2017" target="_blank">A Current Affair</a></em>, Colleen Mitchell said the government has recommended a divorce from her husband, so he can be eligible to receive the pension.</p> <p>“I’ve been told it would be cheaper to divorce, he’d go on a pension,” said Colleen.</p> <p>If Colleen decided to proceed with the divorce, Wayne will be entitled to complete care from the federal government as he would be a single disabled person.</p> <p>Due to the tragic circumstances, Colleen is considering taking the advice given even though she loves her husband dearly.</p> <p style="text-align: center;"><img style="width: 500px; height:280.625px;" src="/media/7822000/http_2f2fprodstatic9netau2f_2fmedia2f20182f112f152f182f582fmd2.jpg" alt="" data-udi="umb://media/14f24862a95f488c9ee0e05a44a4b47e" /></p> <p style="text-align: center;"><em>Photo: <a href="https://www.9now.com.au/a-current-affair/2017">A Current Affair</a></em></p> <p>The family have attempted to get through to Centrelink to request funding for Wayne’s condition but due to the couple owning a home, their requests have been denied due to the house being considered an asset.</p> <p>According to Colleen, she either divorces her husband or has to look into selling her home, which she shares with her daughter in order to cover the costs of nursing home care.</p> <p>“There’s no way he’d be saying, sell up, because I would have nowhere to live,” she said.</p> <p>But despite the struggles the family is currently facing, Colleen says divorcing her husband is an option she doesn’t want to take.</p> <p>“We’ve been together for 22 years, so that would be the last thing I would want to do but if it comes down to it,” she said.</p> <p style="text-align: center;"><img style="width: 500px; height:281.25px;" src="/media/7822001/http_2f2fprodstatic9netau2f_2fmedia2f20182f112f152f182f582fmd6.jpg" alt="" data-udi="umb://media/6119de73b7864e4faa733a7a251f76f5" /></p> <p style="text-align: center;"><em>Photo: <a href="https://www.9now.com.au/a-current-affair/2017">A Current Affair</a></em></p> <p>The family created a <a rel="noopener" href="https://www.gofundme.com/inspire-stroke-care-centre?fbclid=IwAR31-mXmv3OC87p1HRar_h2ousxnlmeVQA4Ra4UspaNDYrI2dNDVStIK1Ow" target="_blank">Go Fund Me</a> page in October to help raise money for a facility that hopes to help young stroke survivors that require the level of assistance only provided in residential care.</p> <p>“On the 27th of August 2018, my 55-year-old father (Wayne) suffered a major Basal Ganglia Haemorrhagic Stroke,” wrote Wayne’s daughter on the Go Fund Me page.</p> <p>“The original prognosis was that he would not survive the original bleed given its severity. He has pulled through, although it is still a long road of rehab and recovery.”</p> <p>Since the page went up, they have received over $25,000 worth of donations.</p> <p>“We want to create a residential care facility specialising in direct support for young stroke and ABI and TBI survivors or any young person who has been put into the situation of requiring 24-hour support,” the page read.</p> <p>“Being cared for around other young people, can provide more mental stimulation and promote rehab, healing and interactions.”</p>

Retirement Income