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IS TRANSITION TO RETIREMENT STILL VIABLE? As many readers will be aware, legally getting access to superannuation before retirement can be rather difficult. But, back in 2005 things were made just a little easier. Find out more

 

Is transition to retirement still viable?

As many readers will be aware, legally getting access to superannuation before retirement can be rather difficult.  But, back in 2005 things were made just a little easier.  Superannuation lase was amended to allow people to access their super from preservation age - currently 55, but progressively increasing to 60 - without having to retire.  It became affectionately known as 'transition to retirement' but it actually has nothing to do with retiring.  Once a person reaches their preservation age, they are able to access their super even though they might continue to work on a part-time or even a full-time basis.


Change is not a dirty word!

We are often told change is constant, and I think that we will all recognise that this is a fact of life.  This constant change is, I am sure, the reason why we are sometimes tires, a little jittery and above all, stressed.  So, what is change and why is it constant?  The reason it is constant is obvious.  As humans we continue to grow, not only in stature - but also intellectually.  Our powers of reasoning become fully developed and we understand that standing still in not an option.


Time for a quick check-up

Superannuation is not something we usually give a great deal of thought to, particularly if retirement is 10 years or more away.  But perhaps it is worth investing a few moments to consider some recent changes, particularly if you have one or more super accounts that have become inactive.  When the government talks about a super account being inactive, they are generally referring to an account that has not received contributions or rollovers from another super fund in the previous 16 months.  This is an important number to keep in mind.


Pensioners living in million-dollar homes!

As many readers will be aware, the family home is exempt from means testing for Social Security benefits, including the age pension.  But this hasn't always been the case.  When the Commonwealth first introduced the age pension back in 1909, the family home was included as an asset.  However, in 1912 the Government of the day made a decision to exempt the family home from the assets test.  And that is the way things have been for the past 107 years.  But the big question is, 'will the family home always be exempt?'


Carers - a blessing

As we age our bodies and minds start to become a little feebler.  No doubt, we will find that we are relying on care provided by relatives, our partners or by the government in the guise of a home care package, which we have discussed previously.  The role of the individual carer is extremely important and in many cases, a selfless act for a person that they love.  There are 2.7 million unpaid carers in Australia, approximately 856,000 are primary carers - those who provide most of the ongoing informal assistance to a person.


Health Insurance - a dark science?

Each year on 1 April, the premiums for private health insurance increase.  It is just part of the annual cycle; however, I don't see the joke - the date being April Fool's Day!  This year there is going to be a lot more than premium increases happening in the private health insurance world.  In late January I received an email from my private health insurer pre-empting some of the changes that I would be seeing.  This prompted me to start to do a little research.  The Australian Government is making changes that will impact on the cover held by members.  The changes have been described as the most significant to private health insurance in 20 Years.


Has the decluttering bug bitten?

I am not sure if it is just us, but over the Christmas holiday period, my wife, Kerry and I decided to do a bit of decluttering.  In retrospect, I don't think it was just us.  If fact, one day I was dropping some goods at the local charity shop and I was the last car they were letting drop off for the day.  It was 10:30am.  They had had so many goods dropped off that morning, they didn't have the capacity to process everything more that day.  So why the sudden interest in decluttering?


Grandchildren - yes, I am that old!

I have become a grandfather for the third time in the last week.  My beautiful daughter gave birth to a very healthy 3kg boy, Edward Kyle.  Very English I know - her wonderful partner is English.  My granddaughters, twins, Penelope and Adeline, are approaching two year of age - creating a feeling of joyful mayhem in my son's household.  This joyful mayhem was of course not helped by the purchase of an 8-week-old blue heeler, shah pea cross puppy called Tilley.  The household can get extremely noisy, as you can imagine, but it is, of course, a lot of fun for me because I can visit, participate in the mayhem and then leave like any good grand parent.


What will 2019 hold?

As we stand on the threshold of a New Year we may be tempted to think about what the year ahead has in store.  Somehow, I think that 2019 will be a big year but whether this is good or bad will depend on your outlook.  

Here are six things that may dictate our changing fortunes as the year unfolds:  


Happy New Year!

I have been back at work for just over a week and I've enjoyed my Christmas New Year break immensely.  In fact, probably a little too much as it did take all week to adjust my mind and life once again to the rigours of a working week.  For example, no longer am I able to take a small nanna nap in the afternoon.  To overcome the need for this adjustment, there is, of course, the Powerball jackpot.  No doubt, like me, a huge number of people are dreaming of starting the year off with a bang by winning the 100-million-dollar jackpot.


Older Australian and their housing dilemma

As we approach another Christmas, perhaps it is time to reflect on those members of our community that are doing it tough.  Sadly, the number of older Australians affected by housing affordability in on the increase.  Quite recently COTA NSW released a report into research they conducted in relation to the housing predicament affecting older Australians in New South Wales.  Even though the report is specific to NSW, the findings are probably representative throughout Australia.


Christmas - again so soon!

We all know that from a physics and time perspective, there is always a period of 12 months between Christmas celebrations - unless you also like to celebrate Christmas in July as well.  However, regardless of what sciences tell us, I am sure I am not alone in thinking that it does not feel like 12 months since Christmas 2017.  Every year, the 12 months in between festive season does appear to become shorter, except of course if you are an 8-year-old child when the last few weeks before Christmas morning seems to take an eternity!


Age Pension and the Superannuation Sweet Spot 

What am I talking about?  I will try and provide a very simple explanation.  The "Superannuation Sweet Spot" is recent terminology referring to the amount of money a person or couple needs to have saved in superannuation to ensure they achieve a reasonable level of income while maximising their age pension.  There have been many articles written in the press concerning this matter with suggestions that an amount of approximately $300,000 in superannuation for a single person who owns their home is sufficient, and $400,000 in superannuation for a couple who own their own home is more than adequate. 


Scared of losing your marbles... or just your super?

We have previously written on a number of occasions about the risks of internet-driven identity theft and perhaps, more importantly, the theft of our hard-earned savings.  But did you know that thousands of Australians have indirectly 'given' billions of dollars of their super to the Australian Taxation Office (ATO)?  This is not something that we do continuously, but it happens every day of the week.

 


Age Pension and the question of residency

As readers of the blog will know that to qualify for an age pension, you first need to reach the necessary qualifying age -  which now can depend on the year you were born.  You also need to be an Australian resident.  According to the Social Security Act, this requires you to reside in Australia and be either an Australian citizen or the holder of a permanent visa.  In addition to residing in Australia and be either an Australian citizen or the holder of a permanent visa.

 



Dividend imputation - what does Labor's announcement mean?

In the past week, there has been an enormous kerfuffle about Mr Shorten's plans to abolish the refunding of excess franking credits.  On the surface, this might look like a topic that is best ignored, however there has been so much media commentary both in favour of and against the proposal, it probably can't be ignored.  Before we start, let's take a step back and look at what it all means...

 


Helping the kids into the housing market

Hardly a week goes by without mainstream media reminding us of Australia's predominantly East Coast housing affordability crisis and just how difficult it is for young people to break into the housing market and buy their first home.  The government has introduced initiatives such as the First Home Super Savers scheme, however, this is still in its infancy, and whether it has the capacity to deliver a meaningful outcome remains to be seen.

 


My comfortable retirement

What does this mean?  Every three months, an organisation known as the Association of Superannuation Funds of Australia (ASFA) produces research providing details of how much a person needs in retirement to fund a comfortable lifestyle.  The research is very comprehensive - documenting a detailed 'comfortable budget' outlining how much a couple can spend on food, entertainment, clothing, travel, health, transport etc. From this research, based on this comprehensive budget, a couple looking for a comfortable lifestyle in retirement need superannuation of $640,000 to support annual income of $60,457.

 


Tree change, sea change, or stay in the big smoke?

Back in the early 1980's when my parents retired, it was not uncommon to move away from the traditional home base and stake out a small claim in a sleepy costal enclave or a nice little country town.  In those days it was common for considerable time and effort to be invested in finding the ideal spot to retire.  In my parent's case, and after a couple of years of travelling up and down the New South Wales north and south coasts on holidays 'conducting research', they settled on Forster - in the early 80's, it was a five-hour drive from the northern suburbs of Sydney where we had grown up.

 


A bit nostalgic

One thing that is certain is that the older we get, the more memories we have - both good and some not-so-good.  As we are now into the last month of summer, I couldn't help but feel a little bit nostalgic.  These days, particularly in the heat of a summer Queensland midday, I prefer to sit in air-conditioned comfort rather than tearing around like a madman which I might have done in the past.  The idea of cruising down to the Gold Coast on a hot summer's day with the sunroof open no longer holds a great degree of attractions. 

 


Change and depression in later years?

I have been a resident of the Gold Coast for over 40 years and during this time I have witnessed enormous change - some of it good, some not so good.  The most frustrating change is the increased level of "traffic", which is understandable considering the increase in the area's population.  Knowing the reasons for the increase does not make the level of stress any less.  Now, before any of you readers who live in the capital cities, point out that the traffic issues on the Gold Coast are nothing compared to those of their capital city, let me just say, I agree.

 


What is retirement?

I realise we have spoken about this topic on many occasions, however, I plan to take a slightly different approach this time and provide some useful information to readers who may be planning to retire now, or in the coming months or years, and are looking to access their super.  The word 'retirement' means something different to everyone.  For some, it will be a time to hang up the work boots and relax - perhaps reading a book in the sun on the porch.  Or, it may be a time to simply do what you 'want' to do - and not what you 'have' to do.  It may be a time for travel and adventure; of a time to spend with family and friends.  Retirement may be a time to care for others - be they elderly family members, or grandchildren.

 


Downsizer Contributions - value for some is questionable!

In November 2017, legislation was passed that will allow certain individuals who sell their main residence to contribute up to $300,000 of the sale proceeds to superannuation without being constrained by the usual restrictions that otherwise apply to contributions including contribution caps and work requirements.  The value of homes in most capital cities in Australia has increased over four-fold in the last 20 years meaning a large number of people over the age of 80 who are in receipt of an age pension are living in the largest asset that they own. 

 


Should life be this hard?

Have you ever tried to change your bank, electricity supplier or phone/internet provider?  Why is it so hard?  A couple of years back I heard a theory that banks aspire to have multiple relationships with their customers.  They work on the philosophy that the more relationships (i.e. accounts) a person has with them, the harder it is for customers to change.  Apparently the optimal number is four.  That is why banks are always wanting to upsell new accounts, products and services to their customers. 

 


Christmas - what does it mean?

I am not a religious person however, I was baptized into the Anglican faith.  I attended the Methodist Church Sunday School tow houses up from my parents' home in Redcliffe and my children attended Catholic primary and secondary schools.  Therefore, I do understand the "real reason" why Christmas is such an important celebration of the Christian faith.  What I find interesting is that as the world becomes more westernized, Christmas is celebrated in many countries were Christianity is not the first religion. 

 


The things I wish I knew then

Way back on 12 December 1967, I started my first - with the princely salary of $1,589 per annum.  Fresh out of school and with the dream of becoming an accountant, I started working for the Australian General Insurance Company, part of Mercantile Mutual Insurance.  Their un-air-airconditioned offices were at 117 Pitt Street Sydney, the lifts were driven by lift drivers, and the lunch rooms in the basement were segregated for both male and female staff. Becoming an accountant never eventuated - but there is till time!

 


What happens when it does not go to plan?

PK and I have written on numerous occasions over the last few years of the need to plan carefully for your retirement - financially, emotionally, physically and mentally.  The question is what happens if it does not go to plan, not from a financial aspect but from a health perspective?  the emotional upheaval can be quite devastating.  What am I talking about?  Over the last couple of months, I have observed two people close to me, a good friend and a brother in law prepare for their retirement and then retire with their first years of "freedom" or "my time" meticulously planned.   

 


Home Care - a blessing

My mum is 87 years of age and loves on her own, in her own home.  Over the past few months, I have noticed that her ability to look after herself has declined, although certainly not to the extent where I am considering placing her in residential aged care.  however, she has slowed considerably.  She is not eating as well as she used to or should be, her ability to clean her little home is not too the standard it needs to be, she is becoming a little forgetful and she certainly needs helps showering after breaking her hip earlier this year. I do live close so I can provide some assistance, however, as I am still working, my ability to provide this assistance is severely limited.

 


Should I retire?

Mark and I have written about aspects of retirement on many occasions over the past three years which we have published on this blog, Realise Your Dream.  For regular readers, you will recall that we have defined retirement at that stage of life when we can finally do what we want to do - and not what we have to do. 

 


Reality Check

Australians are pretty good at having the occasional whinge.  From time to time we all like to complain about how hard we are done by.  Perhaps we believe we pay too much in tax, the increasing costs of living and power prices, housing has become unaffordable, the health care system is broken, the trains don't run on time, we get held up in the traffic, our sporting teams don't perform the way we would like, or the weather is a bit crook.

 


Aged Care - Accommodation costs

Entry to a residential aged care home is traumatic for all concerned, and a decision that is never taken lightly.  The process is complicated and can be quite lengthy.  A question which I am often asked during this process is - how can I afford to pay the Refundable Accommodation Deposit (RAD) the aged care facility requires, as I do not have the cash?  Remember, I have discussed the RAD in previous blogs.  

 


Affordable housing - Is super the answer?

In its 2017 Budget, the Government announced several measures designed to ease the pressure on spiralling housing prices, particularly in the East Coast capital cities of Melbourne, Sydney and to a lesser degree, Brisbane.  I was in Sydney recently on a personal visit and couldn't help but notice the eye-watering prices being asked for relatively modest, free-standing houses near my old stomping ground.

 


Dementia - An unpleasant fact?

Dementia is not a single disease; it is an all-encompassing term describing a range of symptoms that cause parts of he brain to deteriorate progressively.  Dementia affects memory, perception, behaviour, language and personality.  Alzheimer's it the most common and well-known form of dementia.  I am not going to attempt to outline the medical causes and the reasons in this blog - I am not a doctor and after reading several articles, I am still not certain I understand the terminology or the reasons.

 


The secret to a long and happy life

Living a long and happy life is something that will be found on most people's list of wishes, desires and goals.  But that is not surprising.  With average life expectancy of Australians now running well into our eighties, it is undoubtedly a universal goal that we will all want to enjoy life to the fullest.  But life has a habit of throwing up all sorts of obstacles.  We could be forgiven for thinking nature is conspiring to frustrate our attempts to enjoy a fulfilling life.

 


Three years and what has changed?

From a legislative point of view, a tremendous amount!  The changes to the superannuation laws are too numerous to list - the age at which a person qualifies for age pension has increased, the assets test has become tougher, and the assessment of rent for residents going into aged care has also changed.  The list is endless and all this change in only a relatively short period of three years.


Why I use a financial planner?

On 12 December 2017, I will have been working in the financial services sector for 50 years.  With all that experience you would think I had all the answers and didn't need to use a financial planner.  I should by now, know everything I need to know to ensure I have my money under control and a very fat superannuation balance.  However, I am sure you have heard the story of the plumber who has leaking taps, and the painter whose house needs painting.


24 Hours is a day!

I am quite sure I am not on my own when I ask the question - where di the last 24 hours go?  It is not uncommon to find life and time becoming a blur.  Work, family and personal commitments all take time but have you ever wondered exactly how much?  What about when we retire?  How does the way people spend their time in retirement differ?  Is there more time to enjoy life?


It's not a house, it's a home

Anyone who has seen the 1999 movie - was it that long ago? - 'The Castle' will be familiar with Darryl Kerrigan and his attitude towards his home - his castle.  It was the quintessential house sitting on a quarter acre block in the suburbs, albeit under to flight path to Melbourne's Tullamarine Airport.  I recently read a headline in a major newspaper that read: "Scott Morrison urges retirees to 'free up larger homes for younger families'.


How confident are you about your retirement?

Hardly a week goes by without the media raising questions about our preparedness for retirement.  A lot of media attention is driven off the back of research surveys and projects that appear to be the 'flavour of the month'.  But then, with around a quarter of a million Australian baby-boomers hitting retirement age each year, I guess this is to be expected...


Aged Care Costs

On numerous occasions, I have written about the requirements for a person entering residential aged care to complete a Permanent Residential Aged Care - Request for a Combined Assets and Income Assessment (SA457) form. Sounds a little frightening, and it can be. It is 28 pages long with over 140 questions - of course not all questions need to be answered, but on first look, it is indeed daunting. So, why is the form required? The answers you provide in relation to your income and assets will determine your entitlement to receive assistance from the government with your accommodation costs...


When should I really start planning for my retirement?

For anyone who knows me, I have a standard answer for questions like this. and that answer is 'it depends'. Whether it is planning for retirement, buying a new home, deciding what school to send the kids to, what job to take, or where to go for holidays, there are simply numerous variable that need to be taken into account. Let's face it, as humans, we are not infallible and we often get it wrong. However, some decision we make in life are much bigger than others. And those are the ones we need to get right...


Age Pension - not set and forget?

Applying for an aged pension is not easy. There is a comprehensive and complicated application form with an extensive number of questions to be answered and depending on your circumstances, innumerable documents that need to be photocopied and lodged as well. If an application is successful and the age pension is granted, many age pensioners never want to deal with the bureaucracy of Centrelink again. They do not give a passing thought to the responsibilities and reporting obligations that go with the entitlement to the age pension...


Has superannuation failed us?

For many older Australians, superannuation is a relatively new concept, having only been available to the masses since the mid-1980's. Although 'awards based' superannuation first appeared in 1985. the more formal compulsory superannuation guarantee system was introduced in 1992. Before becoming compulsory, employer sponsored superannuation was pretty much optional. Certainly, public sector employees often enjoyed very attractive super and many larger companies provided super for employees, but many of the schemes from that time required employees to also contribute a part of their salary...


Retirement is not that simple!

During my working life, I have always looked forward to the stress-free and simple life I would be able to lead once I retire, but as I draw closer to the magic day, I am not sure how stress-free and simple retirement will be. For most of us, by the time we retire, we would have dealt with all the stress, the high blood pressure and emotions that one would normally face over a period of 40 plus working years...


Do you feel vulnerable about your online security?

We have heard some disturbing reports about Medicare number being sold on the 'dark web'.  This should be concerning to each of us and it raises a number of questions that are worth considering: How does a Medicare number need to be? A Medicare number on its own is pretty harmless. Without the Medicare card that goes with it, a Medicare number is probably of little use to anyone...


 

 

The trip of a lifetime - or is it?

Over the past few weeks I have been quietly watching a drama play out like episodes of 'Days of our Lives'. But this is no soapy... it is a real drama involving real people and having the key elements of a good serial - excitement, anticipation, climax and then disappointment... 


 

 

Always up for a challenge!

Last week, Mark's blog (At what age do I qualify for an aged pension?) focussed on the age we qualify to receive the age pension, and the fact it is progressively increasing from 65 to 67. Following the publication of that article, a question arose from a reader of the blog, Scott. Scott reflected on the fact that age pension was introduced in 1909 and posed the question 'what kind of lifestyle did the age pension get you in 1909?'


 

 

At what age do I qualify for an age pension?

If you said 65 you would be correct, but not for much longer.  From July 2017, for those people born after 1 July 1952, from age perspective for the age pension you will need to be 65 and a half to qualify. Put very simply, if you were born on June 30 1952 you would qualify for the age pension depending of course on your circumstances at the age of 65. However, if your mum was a couple of days late giving birth and you were born after 1 July 1952 you will have to wait until you are 65 and a half... 


 

 

The unexpected or is it?

The second Sunday in May every year, as I am sure you are aware is Mother's day and this year was no different.  Being the dutiful son, my partner - Donna, my dog - Scout and I shouted my mum breakfast.  Nothing out of the ordinary, so far.  After we finished our very enjoyable breakfast, I dropped my mum and drove the 15 minutes back to my house. 5 minutes after we arrive home, I receive a phone call explaining to me that mum had a fall and was being transported to the hospital by ambulance. We immediately jumped back into the car and head for the hospital where the doctor after viewing the necessary x-rays confirms our worst fears, mum at the age of 86, has broken her hip...


 

 

Real Estate Investment - not that simple

When they retire, a large number of Australians gave a diversified portfolio of investments, including cash, shares and superannuation and in a substantial number of cases, an investment property. During a person's working life the investment property can provide a number of benefits including possible increases in the property's value, a regular rental income stream and depending on the level of borrowings, a tax benefit via a common strategy called "negative gearing"...


 

 

Financial ruin - a slippery slope

Even so often I receive a phone call, read an article, or hear a story that leaves me bewildered and, in some ways, helpless because I don't have a simple fool proof answer.  In the past week I have heard of three separate stories that, because of past decisions, have had a profoundly negative outcome for each of the folk involved.  As readers of this blog, you will know I like to talk about personal financial wellbeing and the need for each of us, irrespective of our age or circumstances, to live a financially responsible life...

 


 

 

Are you prepared?

In 1990 my dad passed away two weeks before his 62nd birthday - I was 34. I was not close to my dad and I had not lived at home for over 16 years. However, I do remember that I was shocked and upset (which is to be expected). The thought of my dad passing away had never crossed my mind - despite the fact that he was a heavy smoker. The weekend just past I visited my mum and went to see my step-dad in his nursing home - he is 94. He is as sharp as a tack but unfortunately his body is falling apart around him.  He has lost most of his dignity and is embarrassed by his situation, he wants to pass away and he hopes for it every night when he goes to sleep...

 


 

 

Are you 'financially literate'?

One of the catch-cries of the past couple of years has been the need for Australians to become more 'financially literate'.  But what does it mean, and who does it apply to?  I guess that when we hear the term 'financial literacy' being thrown around our minds often turn to the younger generations.  It covers all of the things that they need to be doing to ensure they don't make the same financial mistakes their parents and older siblings might have made when it comes to managing their personal finances. It's all about someone else - and never about us!

 


 

 

Why it pays to trust the expert

PK and I have spent the last three weeks on the road, travelling from Perth (in the West) and across to Townsville (in the North); visiting all the capital cities in between and talking to a large number of Advisers and Accountants along the way. Our discussions focused on the complexities of the legislation for superannuation, aged pension, and agedcare - without taking into account the numerous changes foreshadowed in the new year (especially in the area of superannuation)...

 


 

 

Have a questions about retirement? You're in good company!

When speaking with people who have either retired, or are planning to retire in the near future, there are some recurring themes that emerge when it comes to the financial side of things.  There appears to be five key questions that regularly come up in the conversation.  I'm interested in knowing: do these questions resonate with you?...


 

 

The 'Super' Silly Season

For some reason, that always seems to evade me, the end of the calendar year is often referred to as the 'silly season'.  Apparently the term has its roots in the media, and refers to that time of year when news is slow and the media is reliant on publishing 'fluffier' news stories to fill their pages.  However, as the 'silly season' coincides with the summer season in the southern hemisphere, it is more akin to that time of the year when our calendars fill up with social engagements - often accompanied by an occasional refreshing beverage or two (or five!)... 


Account-based Pensions: Don't bury your head in the sand!

On 1 January 2015 the official social security assessment process of account-based pensions (ABP) for the purpose of establishing a person's age pension entitlement was changed. Prior to this date - the balance of the ABP was assessed as an asset, and for the purposes of calculating the income to be assessed under the income test, the income being drawn from ABP as a yearly pension was reduced by a deductible amount...


The Olympics: How good are we?

Like the majority of Australians at the moment - I have caught a fever which mysteriously flares up once every four years. This particular fever can be identified when the person exhibits the following symptoms over a two week period. The person will sweat, cry, show signs of Tourette Syndrome with the occasional outburst of incoherent bad language, be tired often, and dark circles will appear under their eyes...


Are we working till we drop?

Back in October 2014, when we first started writing for our blog. Mark and I often spoke about what a 'perfect' day in retirement would look like. It would include where we would love, how we would spend our time, what places we would visit, and how in-shape we would look! (Both health-wise and financially)...


Is Retirement a Sustainable Proposition?

Over the past week or so I have been reading a couple of articles that painted a rather gloomy outlook for retirees in the coming years.  Most Australians will be reliant on the government age pension to meet all, or part, of their income needs - at least some time in their retirement...


Financial Planners; who needs 'em?

When we hear the words 'financial planner' or 'financial adviser' our first impression is often the idea of someone who provides investment advice - what shares to buy, whether to invest in property, and which term deposits offer the best yield. In some cases; investment advice might extend to exotic investments including bullion and precious metals, foreign exchange and derivatives...


The Looming Election

Next Saturday, 2 July 2016, Australia will go to the polls to elect a new House of Representatives and a New Senate. The 2016 election is only the seventh election initiated by a double dissolutions since Federation. The last double dissolution election was held in 1987 by the then Hawke Government; following the rejection of the legislation to introduce the 'Australia Card'. However - by now most Australians will be growing tired of what has been a long, drawn-out election cycle that has run for almost two months...


Age Pension: A Short History

On June 10 1908 the invalid and Old-age Pensions Act received royal assent. From 1 July 1909 - Old-age pensions and the Invalid Pension became payable to the 'appropriately qualified people' within Australia. The new scheme replaced a number of very similar pension schemes - which had been implemented by the New South Wales, Victoria and Queensland governments. But, the big question is, who were these 'appropriately qualified people' at the time when the act was introduced? An interesting question; with a set of even more intriguing answers!...


Demystifying super, well at least a little bit

Over the past couple of weeks - Tealey and I have had the opportunity to speak at a  number of events hosted by financial advisers for their clients and friends.  One of the things we enjoy about these functions is the opportunity to meet with 'real people'.  These are the individuals who are concerned, and sometimes confused, about their journey towards retirement... 


It's all in the timing

When is the best time to retire? To be honest - I have no idea.  In the last week a 'young' man (60 years old) who I know decided it was the right time for him.  He advised me that he is going to slowly transition to retirement by gradually decreasing his working week from five days to four, three, and eventually reaching full retirement by the end of November this year...

 


It's all about transition

Back in the early 2000s we had a problem in Australia.  We had a thing called a 'skills shortage'.  Skilled people were leaving the workforce to retire, and there was nobody to replace them.  In response tot his dilemma the government at the time came up with a rather neat idea.  What if superannuation (super) laws were changed to allow people to cut back their working hours and, at the same time, permit their access to accumulated super savings?

 


It isn't just about superannuation

A couple of weeks ago my colleague, Peter Kelly (PK), posted a blog title A super budget which provided a very comprehensive overview of the 2016 Federal budget, and outlined the changes in relation to superannuation.  If you haven't read it yet I highly recommend that you take the time and do so immediately - as this post provides a large amount of very useful information...

 


Moving the Goal Posts

Don't you just love it when the government and bureaucrats keep 'moving the goal posts'?  The superannuation announcements contained in the 2016 Federal budget are a classic example of shifting sands or a changing landscape, (depending on which cliché you prefer)...

 


What will the 2016 budget hold for pre-retirees?

In recent weeks, the media has been overrun with commentary about what the 2016 federal budget may contain in relation to superannuation.  But this year - things are a little different.  The Australian Federal Government has already departed from convention by bringing the budget forward one week.  The budget is usually brought down annually on the second Tuesday of May.  But this year it has changed, and will be delivered on May 3 2016...


Reality Shock

I believe I have a good understanding of the complexities and the bureaucratic system people need to navigate when confronting the prospect of aged care.  Over the last few years I have written numerous articles, blogs, and answered countless questions.  I have also presented to large numbers of people all on the subject of aged care.  My belief was that, because of this knowledge and understanding, I would be well prepared when I too had to deal with the prospect of aged care. This turned out not true!


Suffering from 'Super' Fatigue?

I am constantly amazed by the amount of 'airtime' superannuation gets.  For something that is, generally, quite boring - it receives an awful lot of attention.  And that attention covers topics regarding how much we have in superannuation, how much we should have, rumoured changes to the system, the investment returns achieved by various funds, and much more.  The truth is that superannuation is often not far from the attention span; yet, at the same time, Australians are notoriously disengaged with their own super...


Look forward to retirement, but proceed with caution

I recently had the pleasure of telling a group of young people at a workshop the story of Mr and Mrs Mean and their retirement journey.  Well, when I say young, I mean people a lot younger than myself and many years away from their own retirement.  By now you may be asking "who are Mr and Mrs Mean? That's a strange name!"...


Credit Card Debt: A cancer eating away at our society

I have just received my credit card statement from one of our big banks.  The fine print on the statement, which I would guess few of us read, suggested that if I dutifully pay the minimum monthly amount, and don't put any other charges on my card (they didn't actually say that, but I am smart enough to read between the lines!) then I would have my $3,736.34 balance paid off in "about 54 years and 11 months"...


Do you have a reason to complain?

I live in Australia, I am healthy and I have a good job which pays well.  I have a very nice home, I am 400 metres from a beautiful beach, and I have a wonderful partner.  I also have a supportive family and a wide circle of acquaintances and friends.

Life is generally very good and has been kind to me, but I still find issues to complain about.  Whether it be traffic, standing in queues, weather too hot, too cold, too wet, people walking on my new lawn, delayed or cancelled flights, slow internet speed, a noisy neighbour, planes flying over my house, the list goes on and I am not alone in my gripes...


This year, I resolve to double my superannuation in five years

Yes it is that time again, when we all make a commitment to lose weight, get fit, drink less, quit smoking, stress less or maybe just enjoy life more.  According to research and articles which I have read, approximately 70% of us are able to keep the resolution in the first two weeks, I have no idea what happens to the other 30%.  By six months this figure has fallen to less than 50% and drops again to under 20% by year's end.  Obviously we are not all that good at commitment.


 

 

The (Christmas) Hangover

The euphoria of Christmas and the New Year has passed.  Hopefully, for most of us the two week Christmas holiday will be a pleasant memory, filled with images of family, friends, gifts, food, laughs and good times.

Towards the end of January the cold hard reality of what you may have spent in the lead up to Christmas will turn up in the form of a credit card statement and any leftover feelings of euphoria very quickly disappear.  "Surely I didn't spend that much money!"... 

 

Are You Retirement Ready

Whiling away idle moments reading the research reports and surveys the study the needs of those of us approaching retirement, can be an intriguing pastime.  After all, most of us are keen to discover if we are retirement ready.  One of the popular topics often discussed in these surveys is the amount of money we need to provide for a comfortable retirement...

  

10 Retirement Commandments

I am certainly not claiming to be Moses and no, I did not have to climb Mount Sinai to collect the 10 retirement commandments.  However, over the years I have learnt a thing or two and these are the factors which I will use to guide my life into retirement.

1.  PREPARE - financially and emotionally, what do you want to do in retirement and how much will it cost? Retiring to sit in front of a TV is not a life - I is a sentence.  If you are not ready for it, retirement will not be enjoyable.  It will be incredibly hard, boring and I suspect, short...

 


 

Saving you age pension, one gift at a time

Our media is full of discussion around changes to the age pension assets test that will come into effect from January 1 2017.  However, some of the strategies being promoted in the press, with the aim of enabling affected Australians to keep their pensions intact, are scary to say the least.

For some, the idea of giving away money or assets to children, even if it is only a "loan", may appear attractive...


Are You Underinsured or Over Insured? Quite possibly, both.

Every year, I look forward to the end of winter.  The sun rising earlier, the days getting longer, and no longer having to wear a couple of layers of clothes to keep warm.

Yes, I do live in Queensland and we don't really have a winter, but having lived here all my life, once the temperature dips below about 10ºC, I start to look for snow, beanies and gloves which become standard attire early in the morning......yes, I know I am soft!

The transition from winter to spring also presents a great opportunity to do a bit of spring cleaning of your own financial position.  In the last month I have been prompted to do tis by two very important pieces of information I have received...


Saving for a Rainy Day

Picture this - you have just lost your job, or come down sick... how long would your savings last?

Or, you have just had that dreaded midnight phone call informing you that a family member overseas, or in another part of Australia, has had a serious accident or is critically ill... where would the money come from to enable you to rush to their bedside?

These questions are worth pondering for a few moments... 


Robo - Advice - Right or Wrong?

In a world where commoditization of products and services appears to be the norm, I do hope that the successful marketing of robo-advice will not see it become the most common form of financial advice for consumers.

Some of you will be asking, what is robo-advice?

The Wikipedia definition of robo-advice is "a class of financial adviser that provides portfolio management online with minimal human intervention. While their recommendations may vary, they all employ algorithms"...


Age Pension Increase

A change in Prime Minister and an increase in my age pension... did Malcolm make this his first priority as the new PM?

No, the change in the PM had nothing to do with an increase in the age pension. 

Every 20 March and 20 September, the age pension is adjusted.  This is based on a rather convoluted mathematical formula, which takes into account the movement in the Consumer Price Index (CPI) and the Pensioner and Beneficiary Living Cost Index (PBLCI). This is then benchmarked to 25 per cent of Male Times Average Weekly Earnings (MTAWE)...


5 ways to avoid a property investment disaster

Hardly a day goes by without our attention being drawn to the buoyant residential property investment market, particularly in Sydney and Melbourne. Not only are record prices being achieved by sellers, but clearance rates at auctions have been tracking at very high levels, with weekly reports of clearance rates of 80% being achieved.

But what happens when things go wrong?


Confessions of a 65 Year old investor - part 2

In the first part of this article, we reflected on the fact that a 65 year old investor was a long term investor. Now in Part 2, we continue this discussion. For those who missed Part 1, it can be accessed here.

What should a 65 year olds investment strategy look like?

Firstly, whenever we speak about investing, the first consideration should be "peace of mind'. There is no point at all in making investments that result in worry and keep us awake at night. Our investments must pass the
'sleep test'...


Confessions of a 65 Year old investor - part 1

It has long been accepted that as we get older (and hopefully wiser), we need to think about becoming less aggressive when investing our hard-earned savings. That is, we need to adopt a more conservative approach to investing. After all, if there is a downturn in the market we don't have the same amount of time as a younger investor to recover.

Now all of this makes sense on the surface, however the idea of moving to an ultra-conservative approach to investments as we age can be fraught with difficulties...


The Age Pension - one night can make a difference

The issue of a person's right to receive an age pension has once again made headlines in the media, as a result of the budget and the proposed changes to the age pension's assets threshold, due to take effect from 1 January 2017.

I am not going to bore you with all the details, but suffice to say those age pensioners with minimal assets will see an increase and those age pensioners with assets above a certain level will either see a reduction in their pension or for approximately 90,000 the loss of their entitlement to a part pension...


 

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