Retirement Income

Placeholder Content Image

4 steps to get your financial affairs in order

<p>It’s a difficult topic to discuss but getting your financial affairs in order could help your family get through a difficult time and ensure your wealth is distributed as desired. Here are a few things you could to <span><a href="https://www.oversixty.com.au/finance/legal/planning-ahead-checklist-have-you-ticked-all-of-the-boxes">prepare</a></span> ahead.</p> <p><strong>1. List all assets</strong></p> <p>Put together a list of what you own (assets such as property, deeds, bank accounts, superannuation, investments, insurance policies and more), as well as what you owe (liabilities such as mortgages and loans). This will give you and your will executor a better idea on ways to administer your estate.</p> <p>You could also start making arrangements with your banks and insurance providers that would allow your partner and/or family to access your funds after you die.</p> <p><strong>2. Write or update your will</strong></p> <p>A will is a legal document that sets out what will happen to your estate (assets) after your death. Besides distributing your wealth, a will also allows you to donate to charities, name an executor and transfer trust control.</p> <p>You can create your own will by buying kits from a newsagency, a post office or online, but in general it is recommended that you enlist a lawyer or solicitor to make sure your document is signed and witnessed properly. Public Trustees can also help prepare your will for free if you appoint them as the will’s executor.</p> <p>Your will might also need to be updated when there are significant changes in your circumstances. Events that necessitate revisions might include relationship changes (marriage, separation or divorce), death of executor or beneficiaries, the entrance of new family members, and assets purchase or sale.</p> <p><strong>3. Appoint people you trust</strong></p> <p>Tapping a trusted person or party to manage your affairs can help the transition process go smoothly. One of the most important roles to consider is the will’s executor, who will be responsible for collecting and distributing your assets as well as repaying your debts. This role often requires special skillsets and involves making difficult decisions, so you may want to consider nominating a professional third party such as a private or public trustee instead of a friend or family member.</p> <p>It is also important to plan for who would make decisions on your behalf if something unexpected occurred and you could not look after your own personal and financial affairs. General power of attorney could make financial and legal decisions for you for a limited time – for example, if you are overseas. On the other hand, enduring power of attorney could make decisions on your behalf if you no longer have the capacity to do so on your own – for example, if you are mentally incapacitated – until you cancel or change them.</p> <p><strong>4. Organise your paperwork</strong></p> <p>Gather all important documents so that the person(s) managing your affairs will be able to locate them easily. These may include, but are not limited to: birth, citizenship and marriage certificates; bank account details; tax returns; vehicle registrations; Medicare card; life and medical insurance policies; house deeds; sources of assets and debts (including superannuation and investments); any pre-made funeral arrangements, and more.</p> <p>Create both physical and digital copies of these files for safekeeping.</p> <p>When in doubt, talk to a professional to discuss any matter of concern.</p> <p>How have you prepared to get your financial affairs in order? Let us know in the comments.</p>

Retirement Income

Placeholder Content Image

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

Placeholder Content Image

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, local 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

Placeholder Content Image

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

Placeholder Content Image

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.co.nz/c/readersdigestemailsubscribe?utm_source=over60&amp;utm_medium=articles&amp;utm_campaign=RDSUB&amp;keycode=WRN87V">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

Placeholder Content Image

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

Placeholder Content Image

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

Placeholder Content Image

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

Placeholder Content Image

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.co.nz/c/readersdigestemailsubscribe?utm_source=over60&amp;utm_medium=articles&amp;utm_campaign=RDSUB&amp;keycode=WRN87V">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

Placeholder Content Image

How much should I have in my emergency fund?

<p>An emergency fund is exactly that - it’s the money that will tide you over when an emergency happens.</p> <p>This includes losing your job, having to pay for urgent home or car repairs, and to pay for medical and dental emergencies.</p> <p>Because it’s meant to be accessed quickly, you should keep your emergency funds in a liquid bank account.</p> <p><strong>How much do I need?</strong></p> <p>First you should know how much you spend in a month.</p> <p>Keep track of your expenses for three to four months.</p> <p>You should already start saving some money while you do this exercise.<br /> <br />An emergency fund should only be used to cover the necessities and not the luxuries, which means bills such as transportation, utilities, groceries and your rent or mortgage.</p> <p>You should not be using this money for holidays or shopping.</p> <p><strong>How much should I save?</strong></p> <p>Once you know your monthly expenses, start working towards saving three months’ worth.</p> <p>For example, if you need $3000 a month to cover all your bills, you should have $9000 squared away for emergencies.</p> <p>Having that amount will give you peace of mind that you can weather the storm until you get back on your feet.<br /> <br />While it’s a good start, three months’ worth of savings is not nearly enough to cover larger costs.</p> <p>For example, if you lose your job, it may take you several months to find a suitable replacement.</p> <p>Which is why you should keep going and work towards having six months’ worth of expenses set aside.<br /> <br />One financial expert, former TV host Suze Orman, even advocates setting aside eight to 12 months’ worth of expenses to feel truly secure.</p> <p><strong>How can I start saving money?</strong></p> <p>No matter how much you earn, try sticking to the 50-20-30 rule.</p> <p>This means not more than 50 percent of your income should go towards living expenses and essentials, while 20 percent should go towards savings, investments and reducing your debt.</p> <p>The final 30 percent should be used for discretionary spending, such as travel, gifts and entertainment.</p> <p>Adjust your spending accordingly using the guide.</p> <p>For example, if you’re consistently exceeding 30 percent of your pay on discretionary spending, you might need to find cheaper entertainment alternatives or cut down on nights out.</p> <p>And if you’re just starting out, you might want to save a little more aggressively in order to squirrel away that emergency cash.</p> <p><strong>Do I keep going once I complete my emergency fund?</strong></p> <p>After you’re satisfied that the amount in your fund will keep you secure for a good amount of time, you should look into saving money for other purposes, such as buying a home of your own, or your retirement.</p> <p>You may even want to explore investing for potentially higher returns.</p> <p>Be aware though that investments come with risks, so you should speak with a qualified financial consultant whom you trust before committing to any investments.</p> <p>And, of course, if you ever need to withdraw from your emergency fund, you should start building it back up again as soon as you’re able.</p> <p><em>Written by Siti Rohani. This article first appeared in <a href="http://www.readersdigest.com.au/money/how-much-should-i-have-my-emergency-fund?items_per_page=All">Reader’s Digest</a>. For more of what you love from the world’s best-loved magazine, <a href="https://www.isubscribe.com.au/Readers-Digest-Magazine-Subscription.cfm">here’s our best subscription offer</a>.</em></p>

Retirement Income

Placeholder Content Image

Why you need to invest in yourself to retire well

<p>I have a particularly resourceful friend who lives a pretty good life, despite never having quite enough money.</p> <p>She is hardworking and popular with her wide circle of friends, neighbours and colleagues. She networks, barters and works for what she really wants.</p> <p>A former chef turned teacher, she finessed enough grant money to pay for a two-week trip to cooking school in Italy. She knows where all the good used furniture stores are, has bartered home cleaning for a two-week stay in a holiday home, and is working on an arrangement now that will get her free housing in France for several weeks this summer. Tres bien!</p> <p>I'm pretty sure my friend will do really well in retirement, though I strongly suspect she has nowhere near the $1-million plus that you would think her lifestyle would require. She has a different kind of capital: skills, smarts, and a great social network.</p> <p>"Everyone is focused on the money, but when somebody retires, they usually manage," said Larry Cohen, director of Consumer Financial Decisions, a consulting group that studies consumer behaviour. "If they don't have the money, they have human capital like skills and education, and social capital in terms of friends, neighbours or a church. All these things help."</p> <p>Cohen predicts: "The (retirement) solutions for the future are going to involve more of these other forms of capital."</p> <p>Experts are increasingly focusing on the non-financial assets that workers can bring into retirement to help them manage on fewer dollars than might be optimal.</p> <p>So what are the best non-financial forms of capital that pre-retirees can invest in now to insure a good retirement? Here are a few.</p> <p><strong>Investing knowledge</strong></p> <p>Nothing good can come of being uninformed about investing. The more you know, the more you can grow small contributions into a retirement kitty you can live off of. Break it into small bits and learn a little every month. Learning about stocks, taxes, portfolio management and the like will help you, at the very least, choose the right adviser. And it will also help you stretch your income after retirement.</p> <p><strong>Money-earning skill</strong></p> <p>The baby boom may well have psychological problems adjusting to the "withdrawal" era of their lives. It could be harder than you think to find money to see a movie or make a car payment. So develop something now that can earn money in the future. Some popular money-earning side business include TradeMe sales, handyman work, cooking, babysitting and driving.</p> <p><strong>Money-saving skills</strong></p> <p>Gardening, appliance repair, lawn mowing, scratch cooking, vacuuming ... got it? If you're the kind of person who currently pays others to do all of these things for you remember this: In retirement you'll have more time and less money.</p> <p><strong>Friends and neighbours</strong></p> <p>Can you drive each other to the airport? Share big bargain packages of toilet paper and tomatoes? Check in on each other when you haven't surfaced for a while? Does someone in the crowd make their own tomato sauce and another fix cars? Or own a beach house or a garden tiller? There's no end to the savings that a supportive collective like that can generate. And, of course, people who are connected to others enjoy life more and may be able to entertain themselves more cheaply.</p> <p><strong>Best body possible</strong></p> <p>The better shape you are in going into retirement, the less you'll spend on pain pills, back braces and more. Of course, you can't control everything that befalls you, but moving into retirement with strong bones and muscles, a good sense of balance, and cardiovascular fitness will improve your retirement fun and cut your retirement expenses.</p> <p><strong>Craftiness</strong></p> <p>Retirement can be like a second chance; the rules come off and you can do things you might not have considered while you were in your main buttoned-down job. Practice creativity now, just like my friend, and you'll be ahead of the game when your new job is making that smaller-than-you'd-hoped retirement fund last a long and happy time.</p> <p>Do you agree with this advice?</p> <p><em>Written by Linda Stern. Republished with permission of <a href="http://www.stuff.co.nz/" target="_blank"><strong><span style="text-decoration: underline;">Stuff.co.nz</span></strong></a>.</em></p>

Retirement Income

Placeholder Content Image

How to really stretch a dollar

<p>Some 'rich' people appear extremely well off. They earn a lot of money, drive expensive cars and live in gorgeous houses. What you may not realise is that a large proportion of these people are living on credit, or relying on the astronomical incomes to continue indefinitely. Or both.</p> <p>When something goes wrong, the car goes back to the lease company. The house goes mortgagee. Their clothes are worthless, their luxuries reduced dramatically in value and all they really have left are photos and memories - and the urgent desire to go back to their old way of life.</p> <p>I have seen this happen so many times. Twice with families that have won first division Lotto. Within a handful of years they were broke again. Why? They take pride in how much they paid for things and in being able to afford whatever they like and let tomorrow worry about itself. </p> <p>The other kind of 'rich' person actually has money in the bank. They are less likely to drive sports cars or head overseas for holidays. But they own everything they have and continue to build on it.</p> <p>If something goes wrong, no-one is going to walk in and take the house. In fact, you will probably find they have a back-up plan to tide them over if need be. These people take pride in how hard they worked for their money and in how hard they made their money work for them. They are also very aware of where they want to be when tomorrow comes.</p> <p>Here are some tips to help you save.</p> <p><strong>1. Don't pay interest.</strong></p> <p>You are essentially paying (a lot) for the privilege of not waiting. If you can't afford to save up for something, you can't afford the repayments. As a bonus, your savings earn you interest. If you have no choice but to borrow, look for no interest deals, or shop around for the best rates and make paying the debt off you top priority.</p> <p>Penalty fees for late payment on bills does count as interest, as does interest on overdrafts (get rid of them) and credit cards (if you can't pay the entire balance every month reduce the credit limit to what you can pay or cut it up).</p> <p><strong>2. Investment or expense?</strong></p> <p>Whatever you are buying, consider whether it is an investment or an expense. Consider cost vs usage, quality, warranty value, running costs. Paying 20 per cent more for something that lasts twice as long is an investment. Paying more for a pretty colour is not.</p> <p>Paying $100 for a quality outfit you will wear every week is more of an investment that $30 for something you will wear twice. When considering a freezer I compared cost and running expenses with savings from bulk buying and resale value. This helped us decide what we were prepared to spend, and whether it was an investment.</p> <p>Don't assume that just because something is branded or expensive it is well made. Likewise with things that are cheap. Observe and research.</p> <p><strong>3. Shop around.</strong></p> <p>Compare prices, brands, quality. I essentially got a free bottle of milk each week by going to one local dairy instead of the other. Loose carrots are usually cheaper than bagged. Meat in bulk from the butcher and fruit from the markets cut a third off my weekly food bills. It all adds up. Assume nothing, and do the math yourself.</p> <p><strong>4. Waste not want not, as Gran always said.</strong></p> <p>Known these days as Reduce, Reuse, Recycle. Do you need to buy something new? Look at buying second hand, or even better, re-purposing or fixing something you already have.</p> <p>Recovering an old lounge suite is cheaper than buying a new one, and will probably last a lot longer for being better made in the first place. Most of our furniture is second hand, or off the road side. Fixed up, no-one can ever tell - even people who used to own it.</p> <p>Trade kids clothes with friends. Make your scraps into compost and grow veges, or pinch cuttings to grow for your own garden. Replace the buttons that make your jacket look dated. Reuse wrapping and ribbons and make old greeting cards into new ones. Throw leftovers in the freezer for quick and easy meals.</p> <p>Most important and easiest of all - look after what you do have. The actual multimillionaires I know do these things, and yet most of my 'broke' friends seem embarrassed to.</p> <p><strong>5. Alternative methods of acquirement.</strong></p> <p>Ask for something (or money towards it) for birthdays and Christmas. Whether it's a fancy beauty cream, new tool, whatever. When we were kids Santa would often pop new lunchboxes and stationary for the coming year into our stockings. Santa was still cool. Vouchers (even home made ones) for outings the kids have been begging for also make great gifts or rewards, and kill two birds with one stone.</p> <p><strong>6. Buy your own house.</strong></p> <p>Accommodation takes the largest portion of your weekly income, and when it's paid to rent you get no return on that money at all. Save up as much as you can for the deposit, and choose carefully. It is the biggest investment you'll ever make, but don't expect the first house you buy to be the one you spend the rest of your life in. View it more as a stepping stone, with the long term resale uppermost in your mind.</p> <p>You can insulate, change the interior decor and landscaping, or possibly renovate to increase value. You can't change the area it's in (or local plans for that area), the local schools or environment, or where the sun rises and sets. Look harder at the area than the house, but ensure the house is solid and sunny. The costs of renting far outweigh the interest costs when the resale value is taken into account, and the long term security is priceless.</p> <p>Essentially, stop worrying about what everyone else has just bought and take the long term view on life. There are hundreds of ways to stretch a dollar, most of them without any compromise to your current lifestyle. It doesn't matter how much money you have at the moment, start to take pride in making your money work for you and it will grow.</p> <p>Anyone can do it, I know a lot of people who have.</p> <p>Do you have any money saving tips you’d like to share?</p> <p><em>Written by Marie Barclay. Republished with permission of <a href="http://www.stuff.co.nz" target="_blank"><strong><span style="text-decoration: underline;">Stuff.co.nz</span></strong></a>.</em></p>

Retirement Income

Placeholder Content Image

5 questions to ask before moving into a granny flat

<p>If managed correctly, a granny flat arrangement can turn into a win-win scenario for all parties. It can also turn sour fast. If you’ve toyed with the idea of entering into this sort of arrangement, it’s important to make sure you’re aware of the implications.</p> <p>Here are five questions to ask before moving into a granny flat.</p> <p><strong>1. Am I really ready to live in a granny flat?</strong></p> <p>While often in these situations you still have plenty of your own personal space, there is going to be a loss of independence to a degree. It’s important to ask yourself if you are really willing to give up this space when moving in with your family.</p> <p><strong>2. Is my family really ready to live with me?</strong></p> <p>It’s not pleasant thing to think about, but the harsh reality is there may be some parties who are not altogether pleased with the situation (even if it seems like they are on the surface). It’s always worth having a frank discussion with all the parties that are affected, and asking them if this is arrangement is indeed willing to go into. </p> <p><strong>3. Is my pension going to be affected?</strong></p> <p>Depending on the arrangement you enter into, moving into a granny flat can affect your pension entitlements. It’s important to check with the Department of Human Services<a rel="noopener" href="https://www.humanservices.gov.au/" target="_blank"></a> and a financial professional about the ramifications of making this move, and ultimately whether or not you’re willing to live with them.</p> <p><strong>4. Have I formalised the agreement?</strong></p> <p>This may seem like adding unnecessary red tape to the arrangement (especially when you’re dealing with family), but formalising the agreement can go some way to avoiding conflicting. Getting the rights and responsibilities of each party down on paper is the best way to manage expectations and ensure no one is given the short end of the stick.</p> <p><strong>5. Do I have a backup plan?</strong></p> <p>If things do go awry you don’t want to be left high and dry. It’s important to have a backup plan up your sleeve just in case the worst does happen, and you can be sure you’re in the best position possible to recoup and ultimately recover.  </p> <p>Have you moved into a granny flat? Or perhaps you know someone who has? What do you think about the arrangement? Let us know in the comments below.</p>

Retirement Income

Placeholder Content Image

Daughter takes 85-year-old father’s life savings: "I never dreamt that she would do it"

<p>When Ray Thomson lost his life savings, he also lost the daughter he thought loved him the most.</p> <p>"I was led to believe she was doing everything for me. She was alright but she was doing everything for herself - with my money," he says.</p> <p>Over two years, Thomson's daughter Helen Williams robbed her father of everything he had, cleaning $320,000 out of his bank account, leaving him with just $20. </p> <p>The blind man now lives in a rest home, in a single, sparsely decorated room, a transistor radio among his meagre possessions.</p> <p>In January, Williams was sentenced to 12 months' home detention for her deceit, a crime she says was motivated by a gambling and drug addiction.</p> <p>Thomson can't talk about what his daughter did without breaking down. She was going to get half his money when he died but she couldn't wait, Thomson says - her "plain greed" got in the way.</p> <p>"I never dreamt that she would do it. I was completely taken in by it and by the time I had woken up to what happened, it was too late.</p> <p>"As far as I am concerned she's not my daughter."</p> <p>The first inkling Thomson got of there being a problem was when the council got in touch about his rates account being in arrears.  </p> <p>He remembers being taken by surprise. "I've never owed anyone in my lifetime," he says. </p> <p>When he checked with his daughter, he says she reassured him there had been a mistake, that there was nothing to worry about.</p> <p>As power of attorney, she was able to withdraw money from his account at will and while she spent it paying back her own debt, grocery bills and on a trip, her father went without. On one occasion Thomson had no hot water for six weeks as his unpaid bills mounted up.</p> <p><strong>'She cut me off'</strong></p> <p>During the time she stole from him, his daughter was a constant presence in Thomson's life. She made sure she was often the only person he would see for days.  </p> <p>"Every time she was at my place - she'd be there most times - she told everyone that I was not there. She cut me off from anyone that I knew," he says.</p> <p>Williams went to extraordinary lengths to keep her father in the dark about what she had been doing, reassuring him constantly and even intercepting the mail. </p> <p>But when the money ran out, Thomson's lawyer turned up with the news he had just $20 to his name.</p> <p>His life suddenly revealed to be in tatters, Thomson was forced to sell his house and move into a rest home. </p> <p>"I still think back on the episode and about what's happened but I will never forgive her for what she's done to me."</p> <p>He says people who prey on the elderly "should be disgusted with themselves." </p> <p>Thomson says even if family are involved in helping out, his advice to others is to be wary and ask questions if something is amiss.</p> <p>"Be cautious, be on the alert."<br /> <br /> "You don't expect those sorts of things to come from your own family."</p> <p>Have you ever encountered something like this?</p> <p><em>Written by Deena Coster. Republished with permission of <a href="http://www.stuff.co.nz/" target="_blank"><strong><span style="text-decoration: underline;">Stuff.co.nz</span></strong></a>.</em></p>

Retirement Income

Placeholder Content Image

Wife’s battle over bungled $200K life insurance: “I won, my husband lost”

<p>Cheryl Sayers was caught in an unimaginable battle when AMP incorrectly cancelled her husband Lee’s life insurance just months before he died of a terminal illness.</p> <p>The couple’s final months together were tainted by AMP’s unforgiveable failure and so Cheryl fought to hold the insurance giant accountable.</p> <p>“I didn't honestly believe that anyone could beat an insurance company,” Cheryl told <em>A Current Affair</em>.</p> <p>The Sydney mother-of-three forfeited a $78,000 non-disclosure payout to share her story, in the hope of helping other Australians who have been wronged in the same way.</p> <p>“I was not going to let them shut me up,” she said.</p> <p>“There are a lot more people out there that this has happened to."</p> <p>In 2011, AMP cancelled Lee’s life insurance policy without warning, falsely claiming he had insufficient funds to pay for it.</p> <p>According to Cheryl, her late husband had “never missed a payment” and had paid close to $80,000 in premiums.</p> <p style="text-align: center;"><img width="497" height="280" src="/media/7818791/2_497x280.jpg" alt="2 (84)"/></p> <p>If the policy had been in place, the couple would have received the $200,000 payout when Lee was diagnosed with pancreatic cancer, eight months before he passed away.</p> <p>The couple had dreamed of using the money to go on a Europe river cruise but were forced to work right up until Lee’s death, while also trying to fight AMP’s incorrect policy cancellation.</p> <p>“That policy would have allowed Lee to retire, to spend quality time with his children and myself,” Cheryl said.</p> <p>“You’re at a loss. You've lost your husband and you look like you're going to lose your home and you're at a loss what to do.”</p> <p>MREC-TAG-HERE</p> <p>But Cheryl chose to represent herself and fought AMP and their high-paid lawyers.</p> <p>In 2014, her persistence paid off when the Superannuation Complaints Tribunal ruled in her favour.</p> <p>“I had won, but my husband had lost,” Cheryl said. </p> <p>AMP agreed to pay Cheryl the $200,000 payout. She estimates that she was also owed around $80,000 in interest and costs but AMP said they would only pay the funds if she signed a non-disclosure agreement. </p>

Retirement Income

Placeholder Content Image

5 basic principle to follow when giving adult children money

<p>The link between money and relationships is undeniable. Money issues can break couples apart, destroy relationships between siblings and cause tension between parents and adult children.</p> <p>Parents have an important role in ensuring their children are not only financially literate but are able to make sound financial decisions and act responsibly with their money.</p> <p>There is big difference between financial literacy and financial capability. This means parents have a continuing role to guide their children past childhood so they not only understand money concepts but know how to put them into practice as they face major decisions and events in their adult life.</p> <p>However, different attitudes towards money and expectations about parental responsibilities can cause serious issues for both parents and adult children.</p> <p>To what extent should parents interfere with or criticise their children's financial decisions and behaviour? Is it reasonable for adult children to expect financial assistance from their parents at times of need? At what point should parents expect their children to be self-sufficient?</p> <p>Every parent wants to see their children succeed but there are different philosophies about how best to help children get ahead in life. Some parents feel the best way to help their children is to give them a hand through gifts of money or interest-free loans. Others think it is only by children pulling themselves up by their own bootstraps that they will learn how to be successful. These deep philosophical differences can be problematic when one parent has a different view from the other and when children have expectations of parents which are not aligned with their parents' philosophy.</p> <p>Parents give money to their children because it makes them feel as though they are being better parents. It is good to give to others, especially your own family, but there are dangers involved. Giving too much or too often can lead to financial dependency, lack of responsibility, repeated poor financial behaviour, enablement of problem behaviours such as addictions or over-spending, delayed retirement or increased financial risk for parents, and resentment from siblings if one child is seen to be receiving more assistance than the others.</p> <p>There are some basic principles which will help decide how and when to support adult children:</p> <p><strong>Decide how much you can afford to give</strong></p> <p>Every financial decision has long-term consequences. The more you give to your children, the less you will have later on to pay off your mortgage or save for retirement. Make sure you are financially secure before helping others, or financial strife will simply transfer from them to you.</p> <p><strong>Set clear expectations</strong></p> <p>Have conversations with your children about what you are prepared to help them with and to what extent. If you are providing ongoing support, set a time limit for how long this will continue. Expect your children to make a contribution rather than giving them all of what they need.</p> <p><strong>Act like a banker</strong></p> <p>If your adult children went to the bank to borrow money they would need to fully disclose their assets, debts, income and expenses so the bank could decide whether to lend or not. You need to do the same. Make sure you understand why your children are in the situation they are in and what behaviours they need to change to avoid being in the same situation again. If you expect money to be repaid, you need to know how likely it is that this will happen.</p> <p><strong>Get legal advice for large sums</strong></p> <p>It may be necessary to have written loan agreements for large sums to avoid disputes later. If your adult child has a partner, you will need to consider what might happen to a loan or gift to your child in the event that the relationship ends as it may become relationship property.</p> <p><strong>Consider your other children</strong></p> <p>Be upfront with your other children about what help you are giving and why. Sibling rivalry is natural, and children can feel deeply hurt by being treated unequally unless they understand the reasons. Equality can be achieved in the long run by making adjustments to how your estate is divided, taking into account prior assistance.</p> <p>It is good to help your adult children but in many cases, teaching them how to make better financial choices is more beneficial than handing out money.</p> <p>Do you agree with this advice?</p> <p><em>Written by Liz Koh. Republished with permission of <a href="http://www.stuff.co.nz/" target="_blank"><strong><span style="text-decoration: underline;">Stuff.co.nz</span></strong></a>.</em></p>

Retirement Income

Placeholder Content Image

What really happens when a car salesperson goes to "talk to their manager"

<p><span>We’ve all been in a situation where we are negotiating with a salesperson, ready to close the deal, when they say they need to speak to their manager.</span></p> <p><span>A user on Q&amp;A site Quora has asked whether the salesperson is actually discussing the deal when they duck away or if it is just a sales technique.</span></p> <p><span>According to one respondent, the “talk to the manger” routine is just an overused sales trick.</span></p> <p><span>“LOL, great question! The answer is NO,” wrote consultant Daniel Pearl.</span></p> <p><span>“There is a popular technique in sales, which has been mastered by the auto sales industry, called the ‘higher authority’ close.</span></p> <p><span>“Simply put, the salesperson asks the prospect for a commitment to do business, in return for a price (or other negotiable item) which they already know they can obtain. So while there are times they truly need approval from a manager, most of the time it’s just a technique.”</span></p> <p><span>Daniel explained that the technique best used is when the salesperson says: “I would need to get approval on your request, but I hesitate to ask for such a huge concession unless you are certain there are no other obstacles to moving forward.”</span></p> <p><span>He adds, “If my manager approves this, are you prepared to move forward immediately? If not, let’s discuss any other obstacles BEFORE I go to my boss with this request, so I don’t get egg on my face by getting his approval and then having to tell him you were just curious.’”</span></p> <p><span>Software salesman Dough Wampler disagrees and says that when buyers ask for a discount above a certain threshold, approval is needed by a manager.</span></p> <p><span>“Many salespeople are given certain pricing parameters and many times the buyer is asking for above what the salesperson can give without further approval,” he wrote.</span></p> <p><span>“This is often well known and abused by savvy buyers who won’t take any offer until they get to a manager so it’s become a stale tactic to signal to the potential buyer that the sales rep has fought for the best price without actually doing so.</span></p> <p><span>“So the answer to your question is, ‘No, it’s not always real’, but not always sleazy.”</span></p> <p><span>However, product specialist for Volkswagen claimed that manager approval was always needed.</span></p> <p><span>“As a product specialist for Volkswagen I can give some real world insight to this,” wrote Elliott Moos.</span></p> <p><span>“The short answer is yes, we always go speak to a manager. Managers have the entirety of the decision-making power in the dealership when it comes to numbers and figures. Our job is to ask hypothetical questions and be the first, second, third and fourth ‘no’.</span></p> <p><span>“When buying a new car it’s important to know that the internet basically destroyed all efforts in making really, really good car deals. Today, it’s more about hundreds of dollars than thousands and even in a desperate situation a large discount off an already-discounted price is pretty rare.</span></p> <p><span>“Long story short — find the highest-volume dealer for your desired make that’s most local to you, and the odds are it’s a great deal no matter what.”</span></p> <p><span>Former mechanic Doug Scott also said the “manager talk” was real but said that salespeople do not discuss your deal in the conversation.</span></p> <p><span>“Yes they do, and with most dealerships now having offices with glass walls it is too easy to get caught not going to the manager,” he wrote.</span></p> <p><span>“That does not mean they are getting approval, it actually means the salesman goes in and tells the manager what he is planning on doing with his commission, and maybe a joke or two. They are not discussing your offer.</span></p> <p><span>“And something else to remember, you do not need to give a deposit before the salesman goes to the manager. They use that ploy to make their story of going to the manager easier to believe.”</span></p> <p><span>Quora user Kevin Burke said the manager talk was real “to some degree”.</span></p> <p><span>“Many dealers use what is called a ‘track’ system to sell vehicles,” he wrote.</span></p> <p><span>“The salesman runs back and forth between the customer and the sales manager delivering offers and counter offers, trying to close a deal.</span></p> <p><span>“In a case like that, obviously they talk. Other dealers price differently — no-negotiation stores are catching on, some do internet pricing to reduce the hassle, but no car or truck EVER leaves a dealer or is sold without the salesman submitting it to a sales manager for approval.</span></p> <p><span>“The cars belong to the dealer, not the salesman, and the manager has to make sure there is enough money in the deal.</span></p> <p><span>“Regardless, sales managers and sales people do talk, but neither of them is really working for the buyer. Everyone is paid on gross profit — so the conversation is, ‘How do we bump this deal up?’”</span></p>

Retirement Income

Placeholder Content Image

4 ways to manage retirement anxiety

<p>Retirement is supposed to be one of the happiest periods of your life, but that doesn’t mean the transition is easy. Retirement anxiety is a real thing, and leaves many people concerned about what life will look like when work finishes.</p> <p>While retirement anxiety is something to be wary of, it’s certainly manageable. Here are four simple ways to deal with some of the leading causes of retirement anxiety.</p> <p><strong>1. Don’t be afraid to seek financial advice</strong></p> <p>The financial markets, especially these days, can make for pretty grim viewing at times, and lead to serious concerns about being able to support your quality of life.</p> <p>As super fund <a href="https://www.equipsuper.com.au/" target="_blank"><strong><span style="text-decoration: underline;">Equip</span></strong></a> states in the blog post, <a href="https://www.equipsuper.com.au/blog/hold-on-tight-as-the-world-keeps-spinning" target="_blank"><strong><span style="text-decoration: underline;">Hold on tight as the world keeps spinning</span></strong></a>, “Investment markets have bounced along a pretty bumpy course in this financial year. It’s pretty understandable, as investor uncertainty merely reflects the unpredictability of international events and mixed signals within the global economy.”</p> <p>While many people are cautious about seeking financial advice, burying your head in the sand is only going to make matters worse. A <a href="https://www.equipsuper.com.au/financial-planning/the-benefits-of-financial-planning"><strong><span style="text-decoration: underline;">qualified financial planner</span></strong></a> will give you the tools to make the right decision, helping you create a plan that will manage your fiscal commitments and support your quality of life into the future.</p> <p><strong>2. Take time and manage the transition</strong></p> <p>When it comes time to test the waters of retirement, diving in headfirst isn’t always the best option. Sometimes it’s a good idea to dip a toe in first, especially if the thought of filling all that free time sounds daunting. Super funds like Equip offer various <a href="https://www.equipsuper.com.au/retirement/planning-your-retirement/transition-to-retirement" target="_blank"><strong><span style="text-decoration: underline;">transition to retirement products</span></strong></a>, allowing you to cut your working hours and make up the difference with a pension income stream. This frees up your time so you can get a taste of retirement and ultimately decide whether you’re ready to take the plunge or have a few more years of work left in you.</p> <p><strong>3. Try to avoid pressure from your peers</strong></p> <p>Just like when you were a teenager, you shouldn’t feel as though you have to do something just because everyone else is. If you friends have flicked the switch and a pressuring you to do the same feel free to take their opinions onboard, but don’t let it influence yours. Retirement is something personal and means something different to everyone so you should only take the leap when you know you’re 100 per cent ready. </p> <p><strong>4. Embrace retirement with open arms</strong></p> <p>Ultimately, retirement is going to be different. But this isn’t necessarily a bad thing. A willingness to embrace the challenges and rewards of retirement will bode well and go some way to ensuring this really is the most enjoyable time in your life.</p> <p>Have you experienced retirement anxiety? How did you cope?</p> <p>Let us know in the comments below.</p> <p><em><a href="https://www.equipsuper.com.au/" target="_blank"><strong><span style="text-decoration: underline;">Equip</span></strong></a> manages $7 billion of investments for members working across a wide range of Australian industry sectors. This <a href="https://www.equipsuper.com.au/" target="_blank"><strong><span style="text-decoration: underline;">superannuation fund</span></strong></a> has been providing strong investment performance and has been a reliable provider of retirement benefits for over 80 years.</em></p> <p><em>This article is for general information only. You should seek formal financial advice on your specific circumstances.</em></p> <p><strong>Related links:</strong></p> <p><a href="/finance/retirement-income/2016/11/australian-cities-need-to-become-more-retirement-friendly/"><em><span style="text-decoration: underline;"><strong>Australian cities need to become more retirement-friendly</strong></span></em></a></p> <p><a href="/finance/retirement-income/2016/11/senior-financial-literacy-is-not-up-to-scratch/"><span style="text-decoration: underline;"><strong><em>Senior financial literacy is not up to scratch</em></strong></span></a></p> <p><a href="/finance/retirement-income/2016/11/aussies-want-to-know-where-their-super-is-actually-going/"><em><span style="text-decoration: underline;"><strong>Aussies want to know where their super is actually going</strong></span></em></a></p>

Retirement Income

Placeholder Content Image

How to save money right now

<p>"Saving more money" is top of the list of many people's resolutions – but it very rarely works.</p> <p>There are a number of reasons for this.</p> <p>The first is that most people are very vague about what they want to save. "More" does not mean anything – and so no money is ever saved. Other people do a little better when they set a goal such as wanting to save $100 a month. But they often are unsuccessful, too.</p> <p>Wonder why? It is because most of them draw up a budget, or have a vague idea in their heads of spending less, and decide they will save what is left over at the end of the month. This almost never works. Even with a good budget, if you have money in your bank account, it is so easy to spend it.</p> <p>The key to saving money is to know at each payday how much you can afford to save and to transfer that money to a savings account immediately. Do not touch it, do not sit on it for a while, do not think about treating yourself this month. Transfer it straight away, or better yet set up an automatic payment for the same day money comes into your account.</p> <p>It should be sent to an account that you cannot touch easily. Banks will allow you to have an account that you cannot access from your online banking login, so you will have to go into the branch if you want money. Some people even set up savings accounts that require more than one signature to access, so if they want to tap in, they have to convince the other person that it is a good idea. You could also have a bank account with a different bank so you do not see the saved amount sitting there temptingly every time you log in to check the balance of your everyday transaction account.</p> <p>In many cases, a basic savings account can be run with very few, or no fees.</p> <p>Whatever it takes to reduce the temptation to raid your savings account, do it. It is too common for people to tell themselves they will "borrow" money from their savings accounts to pay for something – but then it is rarely paid back.</p> <p>Each time you are paid, divide up the amount that you know is your surplus in the budget and put it into your savings accounts. You might have one for a holiday, one for a house deposit, and so on. Have as many bank accounts as you need to, to help you get your head around where the money is going. It might help to give the accounts your goals as names.</p> <p>Make sure you you get your partner and anyone else you share money with on board with your plans. Having that moral support will make you much more likely to reach your goals – and if they know what you are working towards, and are helping too, they are much less likely to derail your plans.</p> <p>Whatever you are saving for, it is important that you set up an emergency fund. Lots of experts say this should be equal to six months' income but that can be too difficult a target for a lot of people. Aim for three months. This money should cover you if disaster strikes, such as if you lose your job, your car dramatically breaks down or you need to take some time off work due to sickness – and you are not insured.</p> <p>Once you start saving, you will probably be pleasantly surprised at how quickly it can add up. If you start saving $20 a week in an account giving you 2 per cent interest, you will h ave almost $5000 in five years. Save $35 a week and you will get to $8662.</p> <p>Tim Barnett, from the National Building Financial Capability Charitable Trust, says it is worth making sure you have  the right type of account.</p> <p>"Compare the accounts on offer from your bank and choose carefully. One of the least appealing accounts we have come across is a well-known bank's  Earner Account, which pays a tiny 0.1 per cent interest as long as you have an average $5000 average monthly balance. </p> <p>"A $5000 balance would earn you $5 per year  - hardly an incentive to save. They also have a Simple Saver account, also offering 0.1 per cent interest calling this account 'competitive'.  The Online Bonus Saver offers up to 2.1 per cent per annum – 21 times the Simple Saver – but the interest evaporates if you make a withdrawal during the month, or fail to make a deposit."</p> <p><strong>Reward yourself</strong></p> <p>If you are on track for a longer-term goal, give yourself regular rewards. When you get to $1000 saved, for example, go out for dinner.</p> <p><strong>The other side of the ledger</strong></p> <p>Saving requires more money coming in than is going out.</p> <p>If you have trimmed all your spending to the point where you cannot cut any further, you might need to consider how you can boost the income side of the balance sheet.</p> <p>Is there any way you could work towards a payrise at work? Could you take on some extra work in your spare time to make some money – even things such as babysitting at the weekend can provide a little extra for your savings account. Or consider a sideline business you could run from home in your spare time – there are a lot of opportunities available, including everything from Tupperware to cleaning products and these can be quite lucrative if you are a confident networker.</p> <p>Upskilling or getting more qualifications is a good investment if it boosts your earning power over your lifetime.</p> <p><strong>Lifelong skills</strong></p> <p>Tonya Russell says she has been a good saver most of her life – apart from a stint in Dubai, where she spent her money travelling.</p> <p>Each payday, an automatic payment takes money from her transactional bank account to a savings account. "I have an account for household stuff and the rest is spare. I take money monthly for saving but I save more than that because I simply don't spend as much as I earn," she says. "But I also never say 'I can't afford' things. I wonder how I can afford it and look for ways to make that happen."</p> <p>She says she has been careful not to take out hire-purchase agreements or pay interest on things other than her mortgage. As well as being careful about her spending, asking herself where she will put things before she buys them, and not buying coffee during the day any more, she has worked to bring in more money as well as limiting what is going out, through setting up her own business as a yoga teacher and selling products that fit in with that, such as essential oils and supplements. "I have worked to create income streams rather than solely relying on wages."</p> <p>Do you think you’ll try these tips?</p> <p><em>Written by Susan Edmunds. Republished with permission of <a href="http://www.stuff.co.nz/" target="_blank"><strong><span style="text-decoration: underline;">Stuff.co.nz</span></strong></a>.</em></p>

Retirement Income