Retirement Income

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How much do you need to retire comfortably?

<p><span>Calculating how much money you’ll need for your retirement can be difficult because you need to take a number of factors into account including how much money you have now, how long it will last you and what your plans are for your future.</span></p> <p>The other factors you need to take into account include your lifestyle and the number of years you’ll spend retired.</p> <p>Additionally, estimating how much you’ll have when you plan to retire depends on factors such as your current salary, super balance and assets. With so many factors, it’s easy to see why you might need a retirement calculator to get an idea of your retirement savings needs.</p> <p>Companies such as AMP have <a href="https://www.amp.com.au/retirement/calculator/retirement-calculator">retirement calculators</a> on their sites and you can use these to get an indication of whether there’s a shortfall between how much you are estimated to have and how much you’ll need in retirement, and put a plan in place to address the situation.</p> <p><strong>How much is enough for retirement?</strong></p> <p>The Association of Superannuation Funds of Australia (ASFA) estimates that Australians aged around 65 who own their own home and are in relatively good health, will need between $535 and $837 per week for one person and between $774 and $1186 per week for a couple. </p> <p>The lower amount will be for a more modest lifestyle but this is still better than living on the <a href="https://www.amp.com.au/retirement/prepare-to-retire/retirement-pension-types">age pension</a>. While the higher amount would be for a more comfortable lifestyle with a broad range of leisure and recreational activities – including domestic and international travel.</p> <p>If you're on above-average incomes, another rule of thumb to estimate how much money you’ll need in retirement is to assume you will require 67% (two-thirds) of your pre-retirement income to maintain the same standard of living.</p> <p><strong>What are your retirement lifestyle expectations?</strong></p> <p>Ultimately, how much money you'll need for your own retirement is very personal, and will depend on your own situation, wants, needs and lifestyle expectations. It may help to factor in your day-to-day spending habits, your recreational activities and hobbies and whether you’ll be entering retirement debt-free.</p> <p><strong>How long will you work for?</strong></p> <p>The age at which you retire can have a significant impact on how much money you have and how much money you need in retirement. It can depend on factors such as your health, debts, super balance, age you can access your super, whether you have dependants and your partner’s retirement plans (if you have one).</p> <p><strong>How long will you be retired?</strong></p> <p>Keep in mind if you're planning to retire at around the age of 65, it’s likely you’ll live for another 20 years or so. Men aged 65 can expect to live to 84.6 years, while women can expect to live to 87.3 years.</p> <p><strong>How much money will you have in retirement?</strong></p> <p>The money you use to fund your life in retirement will likely come from a range of different sources including the following:</p> <p><strong>Superannuation</strong></p> <p>Knowing your super balance is a crucial part of planning for retirement because it's likely to form a substantial part of your retirement savings.</p> <p><strong>The age pension</strong></p> <p>Depending on your circumstances and assets, you could be eligible for a full or part age pension or alternatively, you may not be eligible for government assistance at all. Check up on this by visiting your country's age pension site which has a calculator and you can ascertain your eligibility.</p> <p><strong>Investments, savings and inheritance</strong></p> <p>You may be planning to downsize your house, sell shares or an investment property, or use money you’ve saved in a savings account or term deposit to contribute to your retirement. Or perhaps an inheritance or the proceeds from your family’s estate may help you out in your later years. So these will all need to be taken into account.</p> <p><strong>How retirement calculators can help</strong></p> <p>If you use one of the <a href="https://secure.amp.com.au/ddc/public/ui/retirement-needs/">retirement calculators</a> available online, you can work out how much you’ll need in your retirement.</p> <p>Often when you go through all the steps of using a retirement calculator, it shows you how much you’ll need to fund your entire retirement and sometimes this points to a shortfall.</p> <p>While this news may seem scary, it’s not an uncommon situation. Luckily, finding out about the possible shortfall now means there may still be ways to boost your savings before retirement.</p> <p><span><strong>What do you do if you won’t have enough to retire?</strong></span></p> <p>If you find you’re facing a shortfall in retirement, there are several things you can do to get your retirement on track. You could consider boosting your super through additional contributions, delaying your retirement, adjusting your retirement lifestyle expectations, or selling other assets.</p> <p>Simply by having an idea of your current and projected retirement savings, thanks to using retirement calculators, you can work out a plan to improve your situation. The earlier you start, the easier it may be for you to reach your retirement goals.</p> <p><em>Image: Getty Images</em></p> <p><em> </em></p> <p><em> </em></p> <p><em> </em></p>

Retirement Income

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How do you know when it’s time to retire?

<p>If you’ve been working hard for many years and you’d like a bit more time to yourself so you can do some of those things you’ve always wanted to but never had the time, then this could be a sign that it’s getting close to the right time for you to retire.</p> <p>Or you could be getting sick of constantly working on your family home and you’d like someone else to help with some maintenance for a change! If you’re thinking along these lines then that’s another sign it could be the right time to retire.</p> <p>We all used to think we’d retire at 65 but that’s all changed and these days, many people prefer to retire earlier. Recent figures from the Australian Bureau of Statistics show the average retirement age of men and women is now 54.4 years old.</p> <p>So, it’s really an individual choice but if you give this life-changing decision the time it deserves, you can retire in the best way for you and achieve the retirement of your choice.</p> <p>To find out if it’s the right time for you to retire, here are some key things to consider:</p> <p><strong>Are you ready emotionally?</strong></p> <p>You need to feel emotionally ready if you’re going to retire. Take some time to think about how your life will change and how you can adjust to those changes.</p> <p>Before you retire, you should ask yourself three key questions: What do I want to do? Where do I want to do it? Who do I want to do it with? When you know the answers to these questions, you’ll have a plan for your life in retirement.</p> <p><strong>You're ready to relax and already making plans</strong></p> <p>If you’ve found yourself dreaming of relaxing and unwinding as you take part in a whole range of leisure activities, this is a good indication you’re ready to relax – and retire.</p> <p>As well, you could find yourself creating endless bucket lists of things you want to do and places you want to see. This is also a sign it could be a good time for you to retire. So, don’t ignore your wanderlust and your yearning to do some of those things you’ve always wanted to. As you plan for your retirement, write down a list of all the things you want to do with your time and this way, you’ll know what you want to do with your time as soon as you retire.</p> <p><strong>How’s your health?</strong></p> <p>If you’re in excellent health it’s still OK to retire because this will give you the time to enjoy those things you’ve always wanted to and you haven’t got round to them yet. But if you or your spouse are in poor health, then it’s important not to delay retirement because you don’t want to miss out on doing some of your exciting ‘bucket list’ items together.</p> <p>The best idea is to take an honest look at your health – and those close to you - and weigh this in to your decision about when’s the best time for you to retire.</p> <p><strong>Check in With Your Spouse and Friends</strong></p> <p>It’s interesting but many couples have different ideas about how they want to retire so this is definitely something you should talk about. Often one partner wants to stay working and the other wants to retire earlier. There’s really no problem with this because you can still move to a retirement village if one of you is working and the other one has stopped.</p> <p>But it’s a good idea to check in and see if you’re on the same page with your spouse. Make sure you do some planning together so you can work through any differences early and work it all out as a team.</p> <p>It also helps to check in with your friends who you might play sports with or do various activities with such as fishing. Find out what your friends’ plans are for their retirement. You’ll find if your friends are retiring around the same time as you it can make everything a lot easier and this will lead to a long and healthy retirement.</p> <p><strong>Your children are financially independent</strong></p> <p>You may want to retire but you feel you can’t because you still have children living at home. You could be worried if you sell the family home, they won’t be able to find other accommodation.</p> <p>The best thing to do is to sit down with your children and work out a plan where they can work towards becoming financially independent and you can work towards your retirement. It’s important to work on this together so in the end, everyone benefits.</p> <p><strong>Plan your retirement so it doesn’t take you by surprise!</strong></p> <p>Deciding when’s the best time to retire is all up to you but it’s a good idea to give this major decision the time and attention it deserves. Take some time out and consider all the factors we’ve listed and this way, you’ll set yourself up for a long and happy retirement.</p> <p><em>Photo: Shutterstock</em></p>

Retirement Income

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The biggest rip offs in retirement and how to avoid them

<p><span style="font-weight: 400;">Superannuation has revolutionised the way people retire, as many ordinary, working Australians are finding themselves entering retirement with more than a million dollars in retirement savings.</span></p> <p><span style="font-weight: 400;">While this should set them up for a long and happy life, living with financial security, sadly it means many will become the victims of various rip-off schemes. </span></p> <p><span style="font-weight: 400;">Rip off schemes that can be easily avoided with a little bit of knowledge.</span></p> <p><strong>Online Scams</strong></p> <p><span style="font-weight: 400;">The most obvious are on-line scams. ASIC estimates Australians lose some $30 million to online scams every year and sadly, once your money is lost, there is very little that can be done to get it back.</span></p> <p><span style="font-weight: 400;">Online scams come in many forms, from bogus emails just appearing on your computer requesting you to send money to clear a tax debt or outstanding judgement, to the infamous on-line love affair scams.</span></p> <p><span style="font-weight: 400;">The best advice is just don’t. Don’t send money to an online bank account and never give your bank account details or identification documents like your driver’s license to anyone online without knowing exactly who you are dealing with.</span></p> <p><strong>Simplistic Investments</strong></p> <p><span style="font-weight: 400;">The next biggest scam to avoid is investments that are simply too good to be true. </span></p> <p><span style="font-weight: 400;">The most common are companies promoting investments they describe as being like term deposits or secured against property, but which offer a much higher return.</span></p> <p><span style="font-weight: 400;">Typically, if you dive into these investments you will learn your funds are being used to provide ‘mezzanine’ finance to property developers and instead of being secure, usually, they are totally at risk should the development not prove profitable.</span></p> <p><strong>Watch out for family</strong></p> <p><span style="font-weight: 400;">Unfortunately, another keyway retirees end up losing money is at the hands of their family or loved ones. Too often on entering retirement, people will discuss with their loved ones just how much money they have in superannuation.</span></p> <p><span style="font-weight: 400;">In doing so, it is easy for family members to think you can or should spare just a little of it and give it to them. </span></p> <p><span style="font-weight: 400;">The best way to avoid all of this is to never discuss your finances in detail with family members or loved ones. Unless you are very confident about your financial situation, you should keep every cent of retirement savings to provide for you in retirement.</span></p> <p><strong>Self-managed super</strong></p> <p><span style="font-weight: 400;">Self-managed super funds can be a great vehicle for creating wealth but typically, they lose their reason for being in retirement and just become a time consuming and costly way of keeping your superannuation savings.</span></p> <p><span style="font-weight: 400;">This money can be saved by simply closing the SMSF and moving your savings into a quality retail fund. Typically, you will have the same level of control over your savings as you do with an SMSF but at a fraction of the cost.</span></p> <p><strong>Be wary of retirement homes</strong></p> <p><span style="font-weight: 400;">Finally, many people choose to move into retirement homes for the easier lifestyle they offer and for the support and comfort of having a strong community around them. </span></p> <p><span style="font-weight: 400;">However, this can often end in tears. Make sure you find a good solicitor to review any paperwork and ensure your financial rights and obligations are fully explained to you before you sign on the dotted line so you know exactly what you can expect in the future.</span></p> <p><em>Image credit: Shutterstock</em></p> <p><em>This article first appeared in <a rel="noopener" href="https://www.readersdigest.com.au/food-home-garden/money/the-biggest-rip-offs-in-retirement-and-how-to-avoid-them" target="_blank">Reader's Digest</a>.</em></p>

Retirement Income

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How I mastered baking a yeast bread from scratch, and saved money doing it

<p><span style="font-weight: 400;">By Jeanne Sidner</span></p> <p><span style="font-weight: 400;">My introduction to baking started with the home-kitchen classic that cracks open the oven door for so many – chocolate chip cookies. It was the 1970s, and most of the mums in our largely Catholic neighbourhood were busy raising big families. For the girls in my house, that meant our mother made sure we knew our way around the kitchen. At the flour-dusted table, Mum taught eight-year-old me how to make the cookies perfectly chewy with a crispy exterior. (The big secret: Always chill your dough.)</span></p> <p><span style="font-weight: 400;">So from a young age, I was crystal clear on the power of a baked-to-perfection cookie to make people happy. Baking cookies – then brownies, cakes and pies – became my hobby and a tasty form of social currency. First I used my skills with butter and sugar to impress a series of teenage boyfriends. In time, the fresh goodies were left on doorsteps to welcome new neighbours and set out in the break room for co-workers. Baking was my superpower.</span></p> <p><span style="font-weight: 400;">A few years ago, I became the content director for Taste of Home, Reader’s Digest’s sister magazine and website that celebrates the treasured recipes of home cooks. I’d never been more excited for a new job, but privately I worried that my baking chops wouldn’t measure up. Why? I had a secret as dark as an oven with a burned-out light bulb: While I had baked sweets my whole life, I’d never made a yeast bread from scratch.</span></p> <p><span style="font-weight: 400;">Still, this was no time for excuses. I was a baker, now one with Taste of Home attached to my name. I may have been intimidated by bread, but it was time. I wanted in.</span></p> <p><span style="font-weight: 400;">Getting started, I found Instagram to be a friend. A basic no-knead bread was the one I was seeing online overlaid with dreamy filters. People described it as easy, and to be honest, the thought of removing even one intimidating variable – kneading – was enough to get me to buy two kilograms of bread flour and dive in.</span></p> <p><span style="font-weight: 400;">I gathered everything I’d need (“be prepared” is the first rule of any baking), including my mum’s trusty Pyrex. It had seen me through my first days as a baker, so I was counting on it to work its magic. I had an easy Taste of Home recipe all set on my iPad. I mixed the flour, salt, and yeast and made sure the water temperature was just right – 38 to 46 degrees – before pouring it in.</span></p> <p><span style="font-weight: 400;">And then it happened – or didn’t happen. I followed the instructions to the letter, but my dough didn’t rise. Somehow, impossibly, it looked smaller. Sludgy, gooey, wet with a few bubbles. Sad.</span></p> <p><span style="font-weight: 400;">Three hours later, after I’d resisted the urge to keep checking on it like a nervous mum with a newborn, a puffy dough filled the bowl. I hadn’t killed it; it was just … sleeping. A quick fold, a second rise, and then my bread went into my Dutch oven and off to bake.</span></p> <p><span style="font-weight: 400;">Thirty minutes later, I took it out. Sure, it was slightly misshapen, but in my eyes, it was golden-brown, crusty perfection, right down to the yeasty-sweet hit of steam coming from its top.</span></p> <p><span style="font-weight: 400;">Naturally, the first thing I did was grab my phone and hop on Instagram, positioning my beautiful bread just so in a shining stream of daylight on a wooden cutting board. No one needed to know it was my first yeast bread ever – or how close it came to getting scraped into the garbage can. The online reactions started almost immediately – heart emojis and comments like “This looks DELISH!” from my friends.</span></p> <p><span style="font-weight: 400;">Finally I cut into that lovely brown crust and doled out slices to my husband and kids. Those slices led to seconds, then thirds, each piece slathered with softened butter and a little sprinkle of salt. I made my family perhaps happier with slices of warm, buttered homemade bread than I had with all the sweets combined. </span></p> <p><span style="font-weight: 400;">At last, I was a bread baker – despite yeast’s best attempts to intimidate me on this first try. No more feeling inferior or afraid. Now I make bread and homemade pizza crust regularly. And I have enough confidence to start thinking (and stressing!) about my next difficult baking challenge: homemade croissants.</span></p> <p><em>Image credit: Shutterstock</em></p> <p><em>This article first appeared in <a rel="noopener" href="https://www.readersdigest.co.nz/food-home-garden/home-tips/how-i-mastered-baking-a-yeast-bread-from-scratch-after-years-of-failure" target="_blank" title="Mastering yeast bread">Reader’s Digest</a>. </em></p>

Retirement Income

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5 surprising things that decrease property value

<p><span style="font-weight: 400;">After making a huge investment into your own property, it makes sense that you would want to keep your house in good condition. </span></p> <p><span style="font-weight: 400;">There are a lot of surprising ways that your property can decrease in value over time. Here are just five of them to look out for. </span></p> <p><strong>Poor exterior paint quality</strong></p> <p><span style="font-weight: 400;">Your home’s exterior is the first impression people get of your house. So exterior paint that’s faded, cracked or peeling is a big turnoff. Another negative is painting your home an offbeat colour. Buyers favour neutral colours like grey, white, cream and beige. So pick your colours with care and repaint the exterior when it starts to look bad.</span></p> <p><strong>Deferred maintenance</strong></p> <p><span style="font-weight: 400;">Have a backlog of serious repairs, such as a leaky roof, damaged cladding, or drooping gutters? If so, it’s best to tackle them ASAP. Letting them languish on your to-do list will only chip away at your home’s property value. What’s more, it’s often more expensive to remedy these issues the longer you wait.</span></p> <p><strong>Neighbourhood foreclosures </strong></p> <p><span style="font-weight: 400;">A foreclosure close to your home hurts your home’s property value. That’s because appraisers look at comparable selling prices in your neighbourhood when estimating your home’s value. What’s more, foreclosed homes may sit vacant without any maintenance for a long time. That also doesn’t bode well for your property value.</span></p> <p><strong>Proximity to certain facilities and businesses</strong></p> <p><span style="font-weight: 400;">Studies show that living close to certain businesses and facilities can drag down property values. Being in close proximity to the following are associated with these drops in property value:</span></p> <p><span style="font-weight: 400;">Bad school (22.2%)</span></p> <p><span style="font-weight: 400;">Strip club (14.7%)</span></p> <p><span style="font-weight: 400;">Homeless shelter (12.7%)</span></p> <p><span style="font-weight: 400;">Cemetery (12.3%)</span></p> <p><span style="font-weight: 400;">Funeral home (6.5%)</span></p> <p><strong>An unsightly yard</strong></p> <p><span style="font-weight: 400;">They call it curb appeal for a reason. If your yard is in poor condition or overrun with stuff, expect your property value to suffer. On the flip side, elaborate landscaping or a koi pond can also put a dent in your property value since many homeowners don’t want to handle the extra maintenance. A final yard-related turnoff: trees located too close (less than 6m) to your house.</span></p> <p><em><span style="font-weight: 400;">Image credit: Shutterstock</span></em></p> <p><em><span style="font-weight: 400;">This article first appeared on <a rel="noopener" href="https://www.readersdigest.co.nz/food-home-garden/money/10-surprising-things-that-decrease-property-value" target="_blank" title="Surprising things that decrease property value">Reader’s Digest</a>.</span></em></p>

Retirement Income

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Teen entrepreneur calls out the older generations

<p><span style="font-weight: 400;">An Australian high schooler who has become a multi-millionaire off of his online business ventures has called out older generations for labelling millennials as “lazy” and “entitled”.</span></p> <p><span style="font-weight: 400;">Jack Bloomfield has become a successful ecommerce entrepreneur through a series of ventures.</span></p> <p><span style="font-weight: 400;">The 17-year-old has penned an open letter, saying young people are “doing incredible things”.</span></p> <p><span style="font-weight: 400;">“If I had a dollar for every time I heard yet another insult about Millennials like me, I could probably actually afford to be every bit as lazy as we’re always accused of being,” he wrote in a </span><a rel="noopener" href="https://www.news.com.au/finance/money/17yo-selfmade-millionaires-open-letter-to-adults/news-story/3ab4fd514b3aa838b14b5ca12f96ca40" target="_blank"><span style="font-weight: 400;">news.com.au</span></a><span style="font-weight: 400;"> piece.</span></p> <p><span style="font-weight: 400;">“Honestly, it feels like kids my age should all be walking round with helmets on given just how much of a beating we take from older generations.</span></p> <blockquote style="background: #FFF; border: 0; border-radius: 3px; box-shadow: 0 0 1px 0 rgba(0,0,0,0.5),0 1px 10px 0 rgba(0,0,0,0.15); margin: 1px; max-width: 540px; min-width: 326px; padding: 0; width: calc(100% - 2px);" class="instagram-media" data-instgrm-captioned="" data-instgrm-permalink="https://www.instagram.com/p/BxrT1FTl-Kg/?utm_source=ig_embed&amp;utm_campaign=loading" data-instgrm-version="13"> <div style="padding: 16px;"> <div style="display: flex; flex-direction: row; align-items: center;"> <div style="background-color: #f4f4f4; border-radius: 50%; flex-grow: 0; height: 40px; margin-right: 14px; width: 40px;"></div> <div style="display: flex; flex-direction: column; flex-grow: 1; justify-content: center;"> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; margin-bottom: 6px; width: 100px;"></div> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; width: 60px;"></div> </div> </div> <div style="padding: 19% 0;"></div> <div style="display: block; height: 50px; margin: 0 auto 12px; width: 50px;"></div> <div style="padding-top: 8px;"> <div style="color: #3897f0; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: 550; line-height: 18px;">View this post on Instagram</div> </div> <p style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; line-height: 17px; margin-bottom: 0; margin-top: 8px; overflow: hidden; padding: 8px 0 7px; text-align: center; text-overflow: ellipsis; white-space: nowrap;"><a style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: normal; line-height: 17px; text-decoration: none;" rel="noopener" href="https://www.instagram.com/p/BxrT1FTl-Kg/?utm_source=ig_embed&amp;utm_campaign=loading" target="_blank">A post shared by Jack Bloomfield (@jackbloomfield)</a></p> </div> </blockquote> <p><span style="font-weight: 400;">“All we get told is how lazy and entitled we are.</span></p> <p><span style="font-weight: 400;">“But you know what? We’re not listening.</span></p> <p><span style="font-weight: 400;">“We don’t want to spend 40 years chained to a desk taking a pay cheque like you did.</span></p> <p><span style="font-weight: 400;">“We want to be in charge of our own future.</span></p> <p><span style="font-weight: 400;">“And we’re making it happen whether you like it or not.”</span></p> <p><span style="font-weight: 400;">Since starting his first business at the age of 12, Jack has gone on to become a multi-millionaire and public speaker.</span></p> <p><span style="font-weight: 400;">He told </span><em><span style="font-weight: 400;">Today Extra</span></em><span style="font-weight: 400;"> last year that schools needed to do more to support aspiring entrepreneurs.</span></p> <p><span style="font-weight: 400;">“It all comes back down to support of kids like myself who want to go out there and start something really big with their lives,” he said.</span></p> <p><span style="font-weight: 400;">“No one’s really talking about starting a business, especially teachers and schools around the country, so it was all self-education.</span></p> <p><span style="font-weight: 400;">“Instead of watching Minecraft or whatever I watched at the time, I started typing up how to start your own online business just on YouTube, just spending hours and hours educating myself trying to figure out how this whole thing’s going to work.”</span></p> <p><span style="font-weight: 400;">Bloomfield concluded his piece by praising the achievements of other young people who are "trying to launch the next revolutionary business that will change the way we live or work".</span></p> <p><span style="font-weight: 400;">"We want to be in charge of our own future," he said. "And we're making it happen whether you like it or not."</span></p> <p><em><span style="font-weight: 400;">Image: Jack Bloomfield / Instagram</span></em><span style="font-weight: 400;"></span></p>

Retirement Income

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Oldest woman makes it to space 60 years after training

<p><span style="font-weight: 400;">60 years after she first completed astronaut training, Wally Funk has become the oldest person to reach space.</span></p> <p><span style="font-weight: 400;">Ms Funk was one of the so-called Mercury 13 - a group of women who trained to become NASA astronauts in the 1960s.</span></p> <p><span style="font-weight: 400;">Despite her training, she was denied the opportunity to go to space because of her gender.</span></p> <p><span style="font-weight: 400;">She was 21 at the time, and the youngest of the women who passed the same testing as the Mercury Seven male astronauts in NASA’s program that sent Americans into space between 1961 and 1963.</span></p> <p><span style="font-weight: 400;">“I didn’t think I’d ever get to go up,” Ms Funk said in a video interview on NASA’s website.</span></p> <p><span style="font-weight: 400;">But, the 82-year-old was finally able to make the journey as one of Jeff Bezos’ three co-passengers aboard the Blue Origin’s New Shepard launch vehicle during its historic suborbital flight.</span></p> <blockquote class="twitter-tweet"> <p dir="ltr">"Guess what: It doesn't matter what you are. You can still do it if you want to do it. And I like to do things that nobody has ever done." ~Wally Funk ❤️✈️🚀 <a href="https://twitter.com/hashtag/FlyWallyFly?src=hash&amp;ref_src=twsrc%5Etfw">#FlyWallyFly</a> <a href="https://t.co/zispvzshnm">pic.twitter.com/zispvzshnm</a></p> — Dr. Tanya Harrison (@tanyaofmars) <a href="https://twitter.com/tanyaofmars/status/1417460508731523085?ref_src=twsrc%5Etfw">July 20, 2021</a></blockquote> <p><span style="font-weight: 400;">She also set the new record as the oldest person to launch into space, a title previously held by the late John Glenn, who was 77 when he flew aboard the Discovery space shuttle in 1998.</span></p> <p><span style="font-weight: 400;">“I’ve been waiting a long time,” Ms Funk said afterward.</span></p> <p><span style="font-weight: 400;">“The four of us, we had a great time. I want to go again – fast.”</span></p> <p><span style="font-weight: 400;">Ms Funk was a passenger alongside Mr Bezos’ brother Mark, and Oliver Daemon, the 18-year-old who became the youngest person to fly to space.</span></p> <p><span style="font-weight: 400;">The vehicle reached an altitude of about 106 kilometres during the 10 minute flight.</span></p> <p><span style="font-weight: 400;">“I felt like I was just laying down. I was just laying down and I was going to space,” Ms Funk said.</span></p> <p><span style="font-weight: 400;">It isn’t the first time Ms Funk has set a record, having been both the first female flight instructor at a US military base and the first woman to become an air safety investigator for the National Transportation Safety Board.</span></p> <p><span style="font-weight: 400;">“I’ve done a lot of astronaut training through the world, Russia, America. And I could always beat the guys on what they were doing because I was always stronger and I’ve always done everything on my own,” Ms Funk said after the flight.</span></p> <p><span style="font-weight: 400;">“And I didn’t do dolls … I did outside stuff. I flew airplanes, 19,000 some hours. I loved it and I loved being here with all of you, your family,” she told Mr Bezos.</span></p> <p><span style="font-weight: 400;">She added that she would “cherish that forever”.</span></p> <p><span style="font-weight: 400;">Footage from the flight showed the weightless passengers floating, doing somersaults, tossing Skittles and throwing balls.</span></p> <blockquote class="twitter-tweet"> <p dir="ltr">Blue Origin video from inside the New Shepard capsule in space:<br /><br />Jeff Bezos: “Who wants a Skittle?” <a href="https://t.co/SUO6sAYZAE">pic.twitter.com/SUO6sAYZAE</a></p> — Michael Sheetz (@thesheetztweetz) <a href="https://twitter.com/thesheetztweetz/status/1417522168078893056?ref_src=twsrc%5Etfw">July 20, 2021</a></blockquote> <p><span style="font-weight: 400;">The crew also took a number of mementos with them on the trip, including a piece of fabric from the Wright brothers’ first place and a pair of goggles belonging to Amelia Earhart.</span></p> <p><em><span style="font-weight: 400;">Image: IWASM / Twitter</span></em></p>

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“Miraculous” lotto win saves Sydney man’s livelihood

<p><span style="font-weight: 400;">A Sydney man will be able to stay in business after a “miracle” lotto win saw him receive more than $1 million.</span></p> <p><span style="font-weight: 400;">The 50-year-old said he was on the brink of losing his business and one of thousands struggling during Sydney’s extended COVID-19 lockdown.</span></p> <p><span style="font-weight: 400;">“I have been in business for almost 30 years but due to the devastating impact of COVID-19, I was about to go under,” he told lotto officials after his win.</span></p> <p><span style="font-weight: 400;">“I feel like this win is an absolute miracle that has saved my life, and I won’t let this opportunity go to waste.</span></p> <p><span style="font-weight: 400;">“I will put the money towards paying off debts and saving my business.”</span></p> <p><span style="font-weight: 400;">The winner took part in The Lottery Office’s USA Power Lotto via The Lottery Office app, taking home a division two prize.</span></p> <p><span style="font-weight: 400;">After accidentally selecting a multiplayer game for an extra $3.25, the man’s prize was doubled and came to a total of $1.6 million.</span></p> <p><span style="font-weight: 400;">Lottery Office chief executive Jacyln Wood said the man struggled to sleep after he received the news.</span></p> <p><span style="font-weight: 400;">“The player said the recent lockdowns had been a massive blow to his hospitality business and he had suffered numerous sleepless nights figuring out how he could continue to support his family and staff,” she said.</span></p> <p><span style="font-weight: 400;">“He emailed us straight after the app notified him of the win, he knew he had won a big prize, but he wasn’t ready to believe it.</span></p> <p><span style="font-weight: 400;">“When I called him this morning, he was in tears from the moment I confirmed how much he had won.”</span></p>

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Four-day working week trial found to be ‘an overwhelming success’

<p><span style="font-weight: 400;">Trials of a four-day working week in Iceland have been an “overwhelming success” that led many workers to move to shorter hours, researchers have said.</span></p> <p><span style="font-weight: 400;">Taking place between 2015 and 2019, workers were paid the same amount but worked fewer hours.</span></p> <p><span style="font-weight: 400;">Researchers said productivity levels stayed the same or increased in the majority of workplaces involved in the trial.</span></p> <p><span style="font-weight: 400;">The trials run by Reykjav</span><span style="font-weight: 400;">í</span><span style="font-weight: 400;">k City Council and the Icelandic government eventually included upwards of 2,500 workers, accounting for about one percent of Iceland’s working population.</span></p> <p><span style="font-weight: 400;">Many of the various workplaces, including preschools, offices, social service providers, and hospitals, moved from a 40 hour week to a 35 or 36 hours week, according to researchers from UK think tank Autonomy and the Association for Sustainable Democracy (Alda) in Iceland.</span></p> <p><span style="font-weight: 400;">The trials also led unions to renegotiate working patterns, and 86 percent of Iceland’s workforce have now moved or will gain the right to move to shorter hours for the same pay, the researchers said.</span></p> <p><span style="font-weight: 400;">Workers reported feeling less stressed, having a lower risk of burnout, and said their health and work-life balance had improved. They also said they had more time to spend with family, do hobbies, and complete chores around the house.</span></p> <p><span style="font-weight: 400;">“This study shows that the world’s largest ever trial of a shorter working week in the public sector was by all measures an overwhelming success,” said Will Stronge, director of research at Autonomy.</span></p> <p><span style="font-weight: 400;">“It shows that the public sector is ripe for being a pioneer of shorter working weeks - and lessons can be learned for other governments.”</span></p> <p><span style="font-weight: 400;">Gudmundur Haraldsson, a researcher at Alda, said: “The Icelandic shorter working week journey tells us that not only is it possible to work less in modern times, but that progressive change is possible too.”</span></p> <p><span style="font-weight: 400;">A number of other trials are now being run around the world, with Spain pivoting to a four-day working week for companies and Unilever in New Zealand trialling a 20 percent reduction in work without affecting pay.</span></p>

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Three tricks scammers use

<p><span style="font-weight: 400;">With a recent uptick in potentially fraudulent texts, emails, and phone calls during the pandemic, the field of psychology has analysed these deceptions to reveal some simple tricks scammers use.</span></p> <p><strong>1. Using trusted logos and brands</strong></p> <p><span style="font-weight: 400;">Fraudsters will often use familiar elements, such as the name or logo of well-known brands, to gain immediate trust from their victims.</span></p> <p><span style="font-weight: 400;">This will tend to be paired with a message that aims to elicit a strong emotional response to stop the victim from thinking logically. That could take the form of a promise of a reward or a potential threat that victims need to provide their personal or financial information to receive or avoid.</span></p> <p><strong>2. Posing as a professional</strong></p> <p><span style="font-weight: 400;">In other more devious schemes, scammers pose as lawyers or doctors representing a family member or colleague needing financial help.</span></p> <p><span style="font-weight: 400;">“Often negative emotions are most effective,” said Cleotilde Gonzalez, a professor of decision science at Carnegie Mellon University in Pittsburgh, Pennsylvania.</span></p> <p><strong>3. Setting a timer</strong></p> <p><span style="font-weight: 400;">Finally, most scams will present their victims with a “time-limited” situation that requires an immediate response.</span></p> <p><span style="font-weight: 400;">This works to increase the chance that you will act before you engage your critical thinking skills to either not miss the opportunity or avoid potential threats and forget the possibility of deceit.</span></p> <p><strong>A mix of all three</strong></p> <p><span style="font-weight: 400;">Most scams rely on a mix of all three tricks to ensure success.</span></p> <p><span style="font-weight: 400;">Think of the calls claiming to come from the tax office, warning that you could face a fine if you don’t take action immediately, which usually involves sharing bank account details. With an immediate threat to deal with, it can be incredibly difficult to think clearly.</span></p> <p><span style="font-weight: 400;">“Your guard automatically drops in those situations and your emotions will override rational decision making,” said Garth Norris, a psychologist at Aberystwyth University in the UK.</span></p> <p><span style="font-weight: 400;">Though there isn’t a single fool-proof way of protecting ourselves from scams, both Norris and Gonzalez suggest not responding immediately to every single message we receive.</span></p> <p><span style="font-weight: 400;">“Just give yourself the time and think, is this real?” said Norris.</span></p> <p><span style="font-weight: 400;">And if the message includes a link, typing it out manually instead of clicking on it can help us spot any anomalies.</span></p>

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4 tips that could save you thousands

<p><span style="font-weight: 400;">When it comes to our finances, there are plenty of monetary pitfalls that can have costly consequences.</span></p> <p><span style="font-weight: 400;">Here are four financial tips that could save you thousands of dollars in the long run.</span></p> <p><strong>1. Choose who you take advice from</strong></p> <p><span style="font-weight: 400;">Though looking to family and friends for advice can be helpful in other circumstances, you can run into problems when it comes to money advice.</span></p> <p><span style="font-weight: 400;">“Unless your loved one is qualified and an expert in this field, they are unlikely to know everything there is to know,” says Helen Baker, a financial advisor, author and public speaker. “Those who speak from their own experience are not aware of the details that make everyone’s situation different.”</span></p> <p><span style="font-weight: 400;">Being more picky about where and who you take financial advice from is the best way to go, according to Baker.</span></p> <p><span style="font-weight: 400;">“Make sure they are licensed to practice and have a good reputation,” she says. “Beware of vested interests pushing you a certain way. Consider professional advice only on matters they are qualified to discuss: accountants aren’t licensed to give financial advice, and financial advisors are limited with their tax advice.”</span></p> <p><strong>2. Be smart about your super accounts</strong></p> <p><span style="font-weight: 400;">While most advice tells us to roll all our superannuation accounts into one to save money, it might not be so simple</span></p> <p><span style="font-weight: 400;">“If you consolidate low-fee super accounts into a high-fee one, you’re actually losing money,” Baker explains. “Low cost funds don’t necessarily offer the same investments found in other funds.”</span></p> <p><span style="font-weight: 400;">Claims that having two funds will mean you pay double the fees aren’t necessarily true either.</span></p> <p><span style="font-weight: 400;">“Fees are generally calculated as a percentage of your super, so one percent of, say, $200,000 is the same as one percent of two $100,000 balances.” she says.</span></p> <p><span style="font-weight: 400;">Instead, the biggest super mistake relates to life insurance.</span></p> <p><span style="font-weight: 400;">“Life, disability, and income protection insurances can all be paid out of your super,” Baker says. “If you close an account, the policies attached to that account in almost all cases are terminated. Policies also differ between providers - you’re unlikely to get exactly the same policy in each one.</span></p> <p><span style="font-weight: 400;">“Many people only discover their mistake when they need to make a claim but are no longer covered.”</span></p> <p><strong>3. Put away the crystal ball</strong></p> <p><span style="font-weight: 400;">With the unpredictable nature of life, Baker says calculators meant to determine how much super you will need for retirement should be treated with caution.</span></p> <p><span style="font-weight: 400;">“How is that calculated? How can it factor in things such as future tax rule changes, Centrelink changes, spontaneous withdrawals, changes in employment or market fluctuations? They can provide false hope that you have enough so you needn’t do anything, or scare you into taking unnecessary risks.”</span></p> <p><strong>4. Get involved</strong></p> <p><span style="font-weight: 400;">For couples, the common pattern of one partner leaving financial matters to the other and not getting involved can be detrimental.</span></p> <p><span style="font-weight: 400;">Baker says this can become an especially thorny issue following divorce or death.</span></p> <p><span style="font-weight: 400;">“Nobody gets married expecting to divorce or be widowed early,” she says. “But sadly, this can and does happen. If your partner dies suddenly or becomes your ex, it’s difficult to unpick where the funds have gone if you weren’t involved - especially at a time when you’re grieving and becoming accustomed to living on your own.”</span></p>

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Veteran horsewoman honoured for exceptional achievement

<p><span style="font-weight: 400;">Jane Dotchin, from Hexham in Northumberland, England, has been recognised for her efforts by the British Horse Society (BHS) and received an Exceptional Achievement Award.</span></p> <p><span style="font-weight: 400;">The 80-year-old became an online sensation during her 600-mile journey from Hexham to Augustus in Scotland’s north and back - which she takes each year - with her pony Diamond and disabled dog Dinky who travels in a saddlebag.</span></p> <p><span style="font-weight: 400;">For most of her life, Jane has operated a small riding school in Hexham where she has shared her love and knowledge of horses with thousands of local young people and adults.</span></p> <p><span style="font-weight: 400;">Jane lives off the grid, cares for her horses by hand, and uses her own intuition rather than high-tech riding gear. </span></p> <p><span style="font-weight: 400;">This also meant the news she had won came as quite a surprise.</span></p> <p><span style="font-weight: 400;">“I didn’t know what I’d won it for,” Jane said to </span><a rel="noopener" href="https://www.bbc.com/news/av/uk-england-tyne-57527584" target="_blank"><span style="font-weight: 400;">the </span><em><span style="font-weight: 400;">BBC</span></em></a><span style="font-weight: 400;">. “And of course I don’t have internet, no modern technology at all. So I had to get a friend to use hers to find out what it was about.”</span></p> <p><span style="font-weight: 400;">Having made the journey over so many years, Jane has become well-known along the route.</span></p> <p><span style="font-weight: 400;">“I’ve done the route so many times now and I know people all along the way and it’s nice to see everybody again, everybody’s very kind and generous,” she said.</span></p> <p><span style="font-weight: 400;">Jane was stopped and filmed by stunned resident Rab Black, who shared the clip on Facebook in September last year.</span></p> <p><iframe src="https://www.facebook.com/plugins/video.php?height=316&amp;href=https%3A%2F%2Fwww.facebook.com%2Ftyndrumlodges%2Fvideos%2F767297650720296%2F&amp;show_text=true&amp;width=560&amp;t=0" width="560" height="431" style="border: none; overflow: hidden;" scrolling="no" frameborder="0" allowfullscreen="true" allow="autoplay; clipboard-write; encrypted-media; picture-in-picture; web-share"></iframe></p> <p><span style="font-weight: 400;">“Well they always seem so surprised I’ve travelled so far, but I say well at one time when we didn’t have cars, everybody travelled by horse.”</span></p> <p><em><span style="font-weight: 400;">Images: Hexham Courant, Hyndshaw Stables </span></em></p>

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4 reasons to avoid MLM schemes

<p><span style="font-weight: 400;">Whether you’re looking for an income boost or are strapped for cash, you’re likely to come across multi-level marketing (MLM) while figuring out your options.</span></p> <p><span style="font-weight: 400;">Multi-level marketing, also known as direct selling, is a form of direct sales where salespeople who aren’t employees of the company and don’t receive a salary or wage are used to distribute products or services.</span></p> <p><span style="font-weight: 400;">These companies often sell wellness and cosmetic products - such as essential oils, supplements, and skincare products.</span></p> <p><span style="font-weight: 400;">Recruiters of MLMs often target vulnerable people with promises of flexible working hours, getting to be your own boss, and being able to “get rich quick”.</span></p> <p><span style="font-weight: 400;">In situations where money is tight, it’s easy and understandable to be susceptible to that kind of temptation.</span></p> <p><span style="font-weight: 400;">To combat the stigma and dispel the myths around MLMs, here are four reasons why they may not be the solution.</span></p> <p><strong>#1 You have a 99.7 percent chance of losing money</strong></p> <p><span style="font-weight: 400;">Though some MLM recruits say their income allows them to travel the world and buy new cars, the representative body for direct selling, Direct Selling Australia, says otherwise.</span></p> <p><span style="font-weight: 400;">“Direct selling isn’t about buying boats or bigger houses … [rather] earning additional income that contributes to school fees, weekly groceries, saving for a holiday and bills.”</span></p> <p><span style="font-weight: 400;">But even that is a reach for most members.</span></p> <p><span style="font-weight: 400;">Gerard Brody, CEO of Consumer Action Law Centre, said more than 99 percent of recruits will lose money, going against the wealthy lifestyle MLMs claim to fund.</span></p> <p><span style="font-weight: 400;">Professor David Wishart, who has researched the dangers that come with MLMs, said it’s important to remember these companies “don’t operate within the social contract that business has with society”.</span></p> <p><span style="font-weight: 400;">“If you are in business, yes you look after your own needs, but there are limits and morality - everyone is supposed to have that,” Professor Wishart said.</span></p> <p><span style="font-weight: 400;">“[MLM recruits] operate outside of that.</span></p> <p><span style="font-weight: 400;">“People down the end are simply ripped off. It’s a bad taste capitalism.”</span></p> <p><strong>#2 It could cost you your friendships</strong></p> <p><span style="font-weight: 400;">Members of MLMs often rely on their existing relationships with friends and family, but it can come at a cost.</span></p> <p><span style="font-weight: 400;">“Many people become frustrated with friends attempting to ‘commodify’ their emotional connection,” said Marie O Sullivan, a lecturer in marketing at the Cork Institute of Technology who has studied MLMs from a feminist perspective.</span></p> <p><span style="font-weight: 400;">Dr O Sullivan also said some of these companies encourage members to cut ties with those who don’t support them.</span></p> <p><span style="font-weight: 400;">“Participants are encouraged to cut out anyone who expresses doubt as this negativity will prevent them from achieving their full potential.”</span></p> <p><strong>#3 You’re blamed for failing, despite working hard</strong></p> <p><span style="font-weight: 400;">With many MLMs pushing the idea that the harder you work, the more you earn, many are left feeling shame when they don’t make it in direct selling, Dr O Sullivan explained.</span></p> <p><span style="font-weight: 400;">Sara Balanuik, who had sold weight-loss products for a MLM in the past, recalled: “I hustled hard but was still not a successful boss babe, as was promised.”</span></p> <p><span style="font-weight: 400;">She was told by her “upline” that she wasn’t seeing the results promised because she wasn’t working hard enough.</span></p> <p><span style="font-weight: 400;">This kind of business model sets people up to fail, according to Anna Jenkins, a senior lecturer in entrepreneurship at the University of Queensland.</span></p> <p><span style="font-weight: 400;">“It’s very, very important for all potential sellers to make themselves aware of the statistics around MLMs,” she said.</span></p> <p><strong>#4 It can be an ethical conundrum</strong></p> <p><span style="font-weight: 400;">While MLMs aren’t strictly illegal - unlike pyramid schemes - they can be ethically dubious.</span></p> <p><span style="font-weight: 400;">Many MLMs use a business model that focuses on recruiting “downline” - meaning they get new distributors to buy the product - rather than selling products to actual customers, making them similar to pyramid schemes.</span></p> <p><span style="font-weight: 400;">“While there are many genuine underlying economic activities involved in these schemes, they commonly operate to benefit those at the top. And disadvantage those at lower levels,” Mr Brody said.</span></p> <p><span style="font-weight: 400;">Professor Wishart recommended doing your due diligence on the company before deciding to join their ranks.</span></p> <p><span style="font-weight: 400;">“Read what you’re in for. Work out what the terms are.</span></p> <p><span style="font-weight: 400;">“Look at the product and the sales commission you get on it. Compare the product with what else is on the market. Nobody buys Tupperware anymore as there is stuff that is just as good.”</span></p>

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Is it worth selling my house if I’m going into aged care?

<p>For senior Australians who cannot live independently at home, residential aged care can provide accommodation, personal care and general health care.</p> <p>People usually think this is expensive. And many assume they need to sell their home to pay for a lump-sum deposit.</p> <p>But that’s not necessarily the case. Here’s what you need to consider.</p> <p><strong>You may get some financial support</strong></p> <p>Fees for residential aged care are complex and can be confusing. Some are for your daily care, some are means-tested, some are for your accommodation and some pay for extras, such as cable TV.</p> <p>But it’s easier to think of these fees as falling into two categories:</p> <ul> <li> <p>an “entry deposit”, which is usually more than <a href="https://www.health.gov.au/sites/default/files/documents/2020/06/eighth-report-on-the-funding-and-financing-of-the-aged-care-industry-july-2020-eighth-report-on-the-funding-and-financing-of-the-aged-care-industry-may-2020.pdf">$A300,000</a>, and is refunded when you leave aged care</p> </li> <li> <p>daily “<a href="https://www.myagedcare.gov.au/aged-care-home-costs-and-fees">ongoing fees</a>”, which are $52.71-$300 a day, or more. These cover the basic daily fee, which everyone pays, and the means-tested care fee.</p> </li> </ul> <p>To find out how much government support you’ll receive for both these categories, you will have a “<a href="https://www.myagedcare.gov.au/income-and-means-assessments/#aged-care-home">means test</a>” to assess your income and assets. This means test is similar (but different) to the means test for the aged pension.</p> <p>Generally speaking, the lower your aged-care means test amount, the more government support you’ll receive for aged care.</p> <p>With full support, you don’t need to pay an “entry deposit”. But you still need to pay the basic daily fee (currently, <a href="https://www.myagedcare.gov.au/aged-care-home-costs-and-fees">$52.71</a> a day), equivalent to 85% of your aged pension. If you get partial support, you pay less for your “entry deposit” and ongoing fees.</p> <p><strong>You don’t need a lump sum</strong></p> <p>You don’t have to pay for your “entry deposit” as a lump sum. You can choose to pay a rental-style daily cost instead.</p> <p>This is calculated as follows: you multiply the amount of the required “entry deposit” by the maximum permissible interest rate. This rate is set by government and is currently at <a href="https://www.health.gov.au/sites/default/files/documents/2021/03/schedule-of-fees-and-charges-for-residential-and-home-care-schedule-from-20-march-2021_0.pdf">4.01%</a> per year for new residents. Then you divide that sum by 365 to give a daily rate. This option is like borrowing money to pay for your “entry deposit” via an interest-only loan.</p> <p>You can also pay for your “entry deposit” with a combination of a lump sum and a daily rental cost.</p> <p>As it’s not compulsory to pay a lump sum for your “entry deposit”, you have different options for dealing with your family home.</p> <p><strong>Option 1: keep your house and rent it out</strong></p> <p>This allows you to use the rental-style daily cost to finance your “entry deposit”.</p> <p><strong>Pros</strong></p> <ul> <li> <p>you could have more income from rent. This can help pay for the rental-style daily cost and “ongoing fees” of aged care</p> </li> <li> <p>you might have a special sentimental attachment to your family house. So keeping it might be a less confronting option</p> </li> <li> <p>keeping an expensive family house will not heavily impact your residential aged care cost. That’s because any value of your family house above <a href="https://www.health.gov.au/sites/default/files/documents/2021/03/schedule-of-fees-and-charges-for-residential-and-home-care-schedule-from-20-march-2021_0.pdf">$173,075.20</a> will be excluded from your <a href="https://www.servicesaustralia.gov.au/organisations/health-professionals/services/aged-care-entry-requirements-providers/residential-care/residential-aged-care-means-assessment">means test</a></p> </li> <li> <p>you can still access the capital gains of your house, as house prices rise.</p> </li> </ul> <p><a href="https://images.theconversation.com/files/405552/original/file-20210610-15-3u26en.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/405552/original/file-20210610-15-3u26en.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="Lease sign on front fence of house" /></a> <span class="caption">Renting out your house can be an option.</span> <span class="attribution"><a href="https://www.shutterstock.com/image-photo/sign-lease-front-old-residential-house-1492504154" class="source">from www.shutterstock.com</a></span></p> <p><strong>Cons</strong></p> <ul> <li> <p>your rental income needs to be included in the means test for your aged pension. So you might get less aged pension</p> </li> <li> <p>you might need to pay income tax on the rental income</p> </li> <li> <p>compared to the lump sum payment, choosing the rental-style daily cost means you will end up <a href="https://www.smh.com.au/money/super-and-retirement/seek-help-when-weighing-up-how-to-pay-for-your-aged-care-20191202-p53g16.html">paying more</a></p> </li> <li> <p>you are subject to a changing rental market.</p> </li> </ul> <p> </p> <p><strong>Option 2: keep your house and rent it out, with a twist</strong></p> <p>If you have some savings, you can use a combination of a lump sum and daily rental cost to pay for your “entry deposit”.</p> <p><strong>Pros</strong></p> <ul> <li> <p>like option 1, you can keep your house and have a steady income</p> </li> <li> <p>the amount of lump sum deposit will not be counted as an asset in the pension means test.</p> </li> </ul> <p><strong>Cons</strong></p> <ul> <li> <p>like option 1, you could have less pension income, higher age-care costs and need to pay more income tax</p> </li> <li> <p>you have less liquid assets (assets you could quickly sell or access), which could be handy in an emergency.</p> </li> </ul> <p><strong>Option 3: sell your house</strong></p> <p>If you sell your house, you can use all or part of the proceeds to pay for your “entry deposit”.</p> <p><strong>Pros</strong></p> <ul> <li> <p>if you have any money left over after selling your house and paying for your “entry deposit”, you can invest the rest</p> </li> <li> <p>as your “entry deposit” is exempt from your aged pension means test, it means more pension income.</p> </li> </ul> <p><strong>Cons</strong></p> <ul> <li>if you have money left over after selling your house, this will be included in the aged-care means test. So you can end up with less financial support for aged care.</li> </ul> <p><strong>In a nutshell</strong></p> <p>Keeping your house and renting it out (option 1 or 2) can give you a better income stream, which you can use to cover other living costs. And if you’re not concerned about having access to liquid assets in an emergency, option 2 can be better for you than option 1.</p> <p>But selling your house (option 3) avoids you being exposed to a changing rental market, particularly if the economy is going into recession. It also gives you more capital, and you don’t need to pay a rental-style daily cost.</p> <hr /> <p><em>This article is general in nature, and should not be considered financial advice. For advice tailored to your individual situation and your personal finances, please see a qualified financial planner.</em></p> <p><em>Correction: this article previously stated the amount of lump sum deposit will not be counted as an asset in the aged-care means test, as a pro of option 2. In fact, the amount of lump sum deposit will not be counted as an asset in the pension means test.</em><!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;" src="https://counter.theconversation.com/content/161674/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https://theconversation.com/republishing-guidelines --></p> <p><span><a href="https://theconversation.com/profiles/colin-zhang-1234147">Colin Zhang</a>, Lecturer, Department of Actuarial Studies and Business Analytics, <em><a href="https://theconversation.com/institutions/macquarie-university-1174">Macquarie University</a></em></span></p> <p>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/is-it-worth-selling-my-house-if-im-going-into-aged-care-161674">original article</a>.</p>

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Women retire with less than men: Boosting compulsory super won’t help

<p>All sorts of claims are being made following the release of the Retirement Income Review, including that it paid insufficient attention to issues of gender.</p> <p>Among other things we are being told that the gap between female and male super would narrow if compulsory contributions were lifted from 9.5% to 12%.</p> <p>It wouldn’t, not at all. As the <a href="https://treasury.gov.au/publication/p2020-100554">review</a> of which I was a member states, “maintaining the superannuation guarantee at 9.5% would avoid the increases in inequities associated with the superannuation guarantee rate rising to 12%”.</p> <p>Since men on average earn more than women, increasing the superannuation guarantee rate would widen — rather than narrow — the retirement income gap.</p> <p>By design, superannuation is a contributory scheme. That means what you get in retirement depends largely on how long you have been in the workforce and how much you have been paid.</p> <p>In that respect women are at a disadvantage, firstly due to the gender pay gap.</p> <p><strong>Women get less super because they get less pay</strong></p> <p>The review points out in November 2019 the gap in total average weekly earnings was 16.9% for women and men working full-time.</p> <p>The Bureau of Statistics reported in December 2020 that the pay gap had fallen to <a href="https://www.abs.gov.au/statistics/people/people-and-communities/gender-indicators-australia/latest-release#economic-security">13.4%</a>.</p> <p>While there is still a way to go, it’s an improvement.</p> <p>However, the second and greater disadvantage for women is that they are far more likely to take on caring roles that lead to career breaks and part-time employment.</p> <p>Some 93% of all primary carer leave is taken by women. The result is a gender pay gap of closer to <a href="https://www.abs.gov.au/statistics/labour/earnings-and-work-hours/average-weekly-earnings-australia/latest-release">30%</a> when part-time and full-time work are taken together.</p> <p><strong>Several things could help</strong></p> <p><a href="https://images.theconversation.com/files/390716/original/file-20210321-15-1jrip39.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/390716/original/file-20210321-15-1jrip39.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=237&amp;fit=clip" alt="" /></a> <span class="caption"></span> <span class="attribution"><a href="https://treasury.gov.au/sites/default/files/2021-02/p2020-100554-ud03_equity.pdf" class="source">The Retirement Incomes Review modelled retirement outcomes by gender.</a></span></p> <p>To understand the contribution of career breaks to super balances and retirement incomes, the review constructed and modelled <a href="https://treasury.gov.au/sites/default/files/2021-02/p2020-100554-ud03_equity.pdf">five different scenarios</a> for female workers based on observed patterns of career breaks and part-time work.</p> <p>Not surprisingly the modelling found that when women take more time out of the workforce, the gender gap in superannuation balances increases. Breaks earlier in careers have a greater impact on balances than breaks taken later.</p> <p>In recent decades the impact of career breaks has been declining as women take less time out of the workforce. Average female working life climbed from 24 years in 1980 to around 38 years in 2019.</p> <p>There are a number of measures that could improve super outcomes for women.</p> <p>The review found one would be to require the payment of superannuation on employer paid parental leave and <a href="https://www.servicesaustralia.gov.au/individuals/services/centrelink/parental-leave-pay">government parental leave pay</a>.</p> <p><strong>The super gap isn’t as wide as the pay gap</strong></p> <p>Another would be to require employers to make superannuation contributions to workers earning less than <a href="https://www.ato.gov.au/Business/Super-for-employers/">$450 per month</a>.</p> <p>The present exemption impacts directly on those who work part-time and who work for a number of different employers, 63% of whom are women.</p> <p>Both options would improve the retirement incomes of women, but only marginally mitigate the gender gap inherent in the way superannuation is structured.</p> <p>But here’s what else we found. A number of measures already in place do quite a bit to lessen the gap.</p> <p>Among them are the <a href="https://www.ato.gov.au/Individuals/Super/In-detail/Growing-your-super/Low-income-super-tax-offset/">Low-Income Superannuation Tax Offset</a> and the <a href="https://www.ato.gov.au/Individuals/Super/In-detail/Growing-your-super/Super-co-contribution/">government superannuation co-contribution</a>.</p> <p>Because women earn less than men, both benefit women far more than men.</p> <p>Also, women benefit from the imposition of <a href="https://www.ato.gov.au/Individuals/Super/In-detail/Growing-your-super/Division-293-tax---information-for-individuals/">Division 293 tax</a> which limits concessions for higher income earners, who are more likely to be men.</p> <p><strong>Half as worse off in retirement</strong></p> <p>And women also make higher <a href="https://treasury.gov.au/sites/default/files/2021-02/p2020-100554-ud03_equity.pdf">voluntary super contributions</a> as a proportion of incomes then men. This is particularly so for women over the age of 50, suggesting some make a concerted effort to catch up.</p> <p>As a result, in 2017‑18 the median gap in superannuation balances between men and women aged 60‑64 was <a href="https://treasury.gov.au/sites/default/files/2021-02/p2020-100554-ud03_equity.pdf">22%</a>, considerably less than the <a href="https://www.abs.gov.au/statistics/labour/earnings-and-work-hours/average-weekly-earnings-australia/latest-release">30%</a> gender gap in pay.</p> <p>And the age pension means test means that once women move into retirement, they are more likely than men to get the age pension, and to get more of it.</p> <p>When the age pension and superannuation income are combined, the retirement income gap for women who have worked full time with no career break falls to <a href="https://treasury.gov.au/sites/default/files/2021-02/p2020-100554-ud03_equity.pdf">8.4%</a> For women with two career breaks and part-time work it falls to <a href="https://treasury.gov.au/sites/default/files/2021-02/p2020-100554-ud03_equity.pdf">14.5%</a>.</p> <p>We could do better, and the review spelled out steps to take. It found that boosting compulsory super contributions was not one of them.</p> <p>An increase in the proportion of income sent to super would lift the retirement incomes of high earners more than the retirement incomes of low earners.</p> <p>Until things change, increases in compulsory super will boost the retirement incomes of men more than women.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;" src="https://counter.theconversation.com/content/157412/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https://theconversation.com/republishing-guidelines --></p> <p><span><a href="https://theconversation.com/profiles/deborah-ralston-107436">Deborah Ralston</a>, Professorial fellow, <em><a href="https://theconversation.com/institutions/monash-university-1065">Monash University</a></em></span></p> <p>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/yes-women-retire-with-less-than-men-but-boosting-compulsory-super-wont-help-157412">original article</a>.</p>

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Psychology behind two common scams

<p><span style="font-weight: 400;">Scammers rely on tried and true ways to manipulate how we think and act to make us more vulnerable. IDCARE counsellor Suli Malet-Warden explains how scammers use psychological games to entrap their victims in these two common schemes.</span></p> <p><strong>Romance scam</strong></p> <p><span style="font-weight: 400;">In the initial grooming stage, the scam artist works to gain a high level of trust from their victim to manipulate them into an “ether state”.</span></p> <p><span style="font-weight: 400;">Victims in this state characteristically have high oxytocin levels that are increased through “love bombing” - where the criminal validates the victim, tells them how amazing they are, sends love notes and poems relentlessly through the day, and emotionally bombardes them with “love vibes”.</span></p> <p><span style="font-weight: 400;">Once in this state, the criminal can start asking the victim for money, citing plausible but unusual reasons such as accidents, lost wallets or banking issues.</span></p> <p><span style="font-weight: 400;">The victim is also encouraged to keep messaging the scammer throughout the night, becoming sleep deprived, which has a detrimental effect on brain function.</span></p> <p><span style="font-weight: 400;">The scammer will promise an enticing future life with the victim, who will want to believe everything the scammer says and will employ selective thinking to do so.</span></p> <p><span style="font-weight: 400;">The victim will block out any observations that contradict the story the scammer is telling them, which is why it can be incredibly difficult for well-meaning friends and family to convince them they’re falling for a scam.</span></p> <p><span style="font-weight: 400;">Romance scammers often lure victims in using sexual desire and dreams of an intimate relationship in the future. The stronger the ‘pull’ for sexual connection, the less a victim will notice any gaps or oddities in the scammer’s story.</span></p> <p><strong>The ATO scam</strong></p> <p><span style="font-weight: 400;">Criminals using this scam send victims into “amygdala hijack”.</span></p> <p><span style="font-weight: 400;">This evolutionary response shuts down the prefrontal cortex - our rational ‘executive function’ area in the brain - in response to threats to our safety and security, which causes us to act and not think.</span></p> <p><span style="font-weight: 400;">Scammers often convince victims of the importance of needing to take immediate action, such as making an immediate payment in the Australian Tax Office scam, and the fear triggered by threats of imprisonment causes amygdala hijack.</span></p> <p><strong>When the cash starts flowing</strong></p> <p><span style="font-weight: 400;">Once the victim starts paying the scammer, they are susceptible to another psychological process called “induction of behavioural commitment” which makes them more motivated to keep giving money with the belief they will get it all back.</span></p> <p><span style="font-weight: 400;">The victim will be asked to make small steps of compliance to build trust in the scammer. </span></p> <p><span style="font-weight: 400;">Criminals also ensure the promised story of a better life is made vivid enough so the victim will still feel motivated to give money and continue making faulty decisions. This applies to both the romance and ATO scams, with scammers using the relationship, lottery winnings, or inheritances to suck the victim in.</span></p>

Retirement Income

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68% of millennials earn more than their parents, but boomers had it better

<p>A lot of us are pessimistic about our children’s future. According to the most recent data from the Pew Global Attitudes Survey (in 2019), just 29% of Australians believe today’s children will be <a href="https://www.pewresearch.org/global/question-search/?qid=1625&amp;cntIDs=&amp;stdIDs=">better off financially</a> than their parents.</p> <p>Such pessimism is common in many developed nations. In Japan, just 13% believe children will be better off, in France 16%, in Britain 22%. Australians are still marginally less optimistic than Canadians (30%) and Americans (31%), and significantly less optimistic than Swedes (40%) and Germans (48%).</p> <p><a href="https://www.lifecoursecentre.org.au/research/journal-articles/working-paper-series/are-we-richer-than-our-parents-were-absolute-income-mobility-in-australia/">Our research shows</a> things aren’t as bad as many fear, with 68% of millennials (those born between 1981 and 1987 for our research) earning more income than their parents did at the same age. This is close to the highest percentage <a href="https://www.iza.org/publications/dp/13456/trends-in-absolute-income-mobility-in-north-america-and-europe">among countries</a> for which estimates are available. The experience of gen-Xers (born from the early 1960s to late 1970s) has been similar.</p> <p>But it’s not all good news. That percentage is lower than the upward mobility enjoyed by baby boomers (born from 1946 to the early 1960s). For those born around 1950, 84% earned more at age 30-34 than their own parents did at the same age.</p> <p>There are two prime reasons for this decline in absolute mobility since the 1980s. Lower economic growth leading to average incomes growing more slowly; and growing income inequality.</p> <p><strong>How we did our research</strong></p> <p>The share of people whose income is higher than their parents at the same age is known as “absolute income mobility”. It is an appealing indicator of economic progress because it captures aspirations for our children. It reflects economic growth, inequality and opportunity.</p> <p>Estimating absolute mobility, though, is quite hard. The data we need to measure it directly – information about what people earned at a particular age compared to their own parents – does not exist for Australia.</p> <p>To do this exercise, therefore, we’ve applied <a href="https://science.sciencemag.org/content/356/6336/398">new statistical methods</a> that have been developed in recent years to estimate absolute mobility without linked parent-child data. These methods, using separate generational data on income distribution, have been verified in research published <a href="https://4a2bc32e-a967-44a4-9e23-f2b3b9cf578e.usrfiles.com/ugd/4a2bc3_10d644c7d36c42eba03136cca93e56fc.pdf">in 2018</a> and <a href="https://www.iza.org/publications/dp/13456/trends-in-absolute-income-mobility-in-north-america-and-europe">in 2020</a>.</p> <p>Our own approach closely follows leading international studies. We used sources of data including the Melbourne Institute’s Household, Income and Labour Dynamics in Australia (HILDA) survey, data from Australian Bureau of Statistics surveys and income tax records.</p> <p><strong>What our research shows</strong></p> <p>The main results are below. Of people born in 1950, 84% had higher household incomes than their parents. This fell to about 68% for those born since the early 1960s. It has stayed roughly constant for gen-Xers and millennials.</p> <hr /> <p><iframe id="CxoOP" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/CxoOP/3/" height="400px" width="100%" style="border: none;" frameborder="0"></iframe></p> <hr /> <p>The main driver of this change is slower economic growth. Boomers’ incomes were much higher than their parents particularly due to decades of uninterrupted economic growth from World War II to the mid-1970s.</p> <hr /> <p><iframe id="qjHQt" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/qjHQt/1/" height="400px" width="100%" style="border: none;" frameborder="0"></iframe></p> <hr /> <p>The other driver has been rising income inequality over the past 40 years, after falling in earlier decades, as the next chart shows. The relationship between inequality and mobility is complicated, because high inequality for either generation lowers the rate of mobility.</p> <hr /> <p><iframe id="8bQEW" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/8bQEW/1/" height="400px" width="100%" style="border: none;" frameborder="0"></iframe></p> <hr /> <p>Absolute mobility would be higher if income was adjusted for family size – 78% for millennials, because the younger generation have smaller families than their parents did at the same age.</p> <p><strong>Complicating factors</strong></p> <p>Our results are for income earned in a single year (at about age 32). We have also found similar results when looking at income at around age 37.</p> <p>Ideally, we’d like to calculate absolute mobility of lifetime income. But methods to do this have not yet been developed. So we don’t know what mobility in lifetime income is. The same could be said for indicators of income inequality, which mostly use single-year income measures as well.</p> <p>You also might be wondering about how the cost of housing fits in – an important issue given the escalating cost of a home compared to the median wage.</p> <p>In all the results shown, income is adjusted for inflation using the Consumer Price Index. Housing is a big part of the index though costs such as the price of land and mortgage interest payments are <a href="https://www.abs.gov.au/ausstats/abs@.nsf/Lookup/6467.0Feature+Article1Mar+2017">not included</a>.</p> <p>The ABS does factor mortgage debts into its “Selected Living Cost Indices”, but these only go back to 1998, so couldn’t be used in these calculations. However, the changes in the CPI and the SLCI over the past 20 years are similar, which gives us some assurance our estimates account for the cost of housing. Further work could explore this in more detail.</p> <p><strong>Valid concerns</strong></p> <p>Australia has achieved high levels of absolute income mobility for all generations since at least the 1950s. This is still the case. But the pessimism about our children’s financial future is rooted in some valid concerns.</p> <p>Wage growth has been <a href="https://www.rba.gov.au/publications/bulletin/2017/mar/2.html">slow for years</a>. Income inequality has been <a href="https://wid.world/country/australia/">increasing for decades</a>. So has the gap <a href="https://grattan.edu.au/report/generation-gap/">between young and old</a>.</p> <p>So there are clear threats for the prosperity of today’s children – even without factoring in concerns such as climate change.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;" src="https://counter.theconversation.com/content/161647/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https://theconversation.com/republishing-guidelines --></p> <p><span><a href="https://theconversation.com/profiles/peter-siminski-250958">Peter Siminski</a>, Professor of Economics, <em><a href="https://theconversation.com/institutions/university-of-technology-sydney-936">University of Technology Sydney</a></em></span></p> <p>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a rel="noopener" href="https://theconversation.com/68-of-millennials-earn-more-than-their-parents-but-boomers-had-it-better-161647" target="_blank">original article</a>.</p>

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Legion of Honour recipient appears in court for WW1 brick scam

<p><span style="font-weight: 400;">A NSW woman who used funds from a charity she co-founded purporting to sell bricks to establish a memorial at the Pozieres battlefield in France for her own personal use has avoided a prison term for the theft.</span></p> <p><span style="font-weight: 400;">Instead, Yvonne Mary Hall, who is a recipient of France’s prestigious Legion of Honour, was ordered to complete a 16-month intensive corrections order by a magistrate at Coffs Harbour Local Court on Monday.</span></p> <p><span style="font-weight: 400;">The 69-year-old had earlier pleaded guilty to two counts of dishonestly obtaining financial advantage by deception and one charge of using a false document to influence exercise of public duty.</span></p> <p><span style="font-weight: 400;">The Pozieres Remembrance Association, which Hall co-founded in 2010 and acted as the secretary of, claims to have sold over 4200 bricks for $50 apiece - raising $210,000 ($NZD 224,000) in total - since 2014.</span></p> <p><span style="font-weight: 400;">The funds were meant to go towards a memorial honouring the 6800 Anzacs who died during the battles at the French village during the First World War.</span></p> <p><span style="font-weight: 400;">Hall instead made 143 transactions - withdrawing approximately $140,000 - to pay for her own everyday living expenses, as well as a gambling addiction and online shopping habit.</span></p> <p><span style="font-weight: 400;">“The breach of trust was obviously very significant indeed. She was in a position of secretary of the organisation and she directly breached that trust,” magistrate Ian Rodgers said.</span></p> <p><span style="font-weight: 400;">When passing down the sentence, Mr Rodgers acknowledged she had repaid all but $8052 of the stolen funds.</span></p> <p><span style="font-weight: 400;">Along with the corrections order, he ordered Hall to complete 100 hours of community service and repay the money owed.</span></p> <p><span style="font-weight: 400;">Hall’s lawyer said the association had paid to ensure the inscribed bricks were still manufactured, and it was the defence’s understanding that the bricks were en-route to France by boat and would be placed on the site soon.</span></p> <p><span style="font-weight: 400;">Jacqueline Kennedy bought a brick to honour her great-uncle Percy Smythe, who fought in and survived Pozieres.</span></p> <p><span style="font-weight: 400;">Sitting in the public gallery during the hearing, she had purchased the brick in 2015 and asked the Department of Fair Trading to investigate after wondering what had happened and where the money went.</span></p> <p><span style="font-weight: 400;">She said she was satisfied with Monday’s sentence and that she was happy Hall was being “treated like the criminal that she is”.</span></p> <p><span style="font-weight: 400;">“I always knew that it would be a non-custodial sentence because of her age and health, and does like to play on that, but I’m very satisfied with the seriousness with which the judge took the case and handed down the sentence,” Ms Kennedy said outside court.</span></p> <p><span style="font-weight: 400;">Hall was awarded the Legion of Honour, France’s highest order of merit, for raising awareness of the Battle of Pozieres and strengthening Australian-French relations.</span></p> <p><em><span style="font-weight: 400;">Image: Getty Images</span></em></p>

Retirement Income

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Forget more compulsory super: Here are 5 ways to actually boost retirement incomes

<p>This morning the Grattan Institute releases its <a href="https://grattan.edu.au/">submission</a> to the government’s <a href="https://treasury.gov.au/review/retirement-income-review">retirement incomes review</a>, a review called in anticipation of five annual increases in compulsory superannuation contributions, scheduled to begin in July 2021.</p> <p>Our research shows the super increases aren’t necessary. For most Australians, retirement incomes are <a href="https://theconversation.com/why-we-should-worry-less-about-retirement-and-leave-super-at-9-5-106237">already adequate</a>. Since higher super contributions will come <a href="https://theconversation.com/think-superannuation-comes-from-employers-pockets-it-comes-from-yours-130797">at the expense of wages</a>, the scheduled increases should be abandoned.</p> <p>But there are big problems the review will need to confront.</p> <p>Here are <a href="https://grattan.edu.au/">five changes</a> that would tackle them.</p> <h2>1. Boost rent assistance</h2> <p><img src="https://images.theconversation.com/files/317733/original/file-20200228-24685-y74ele.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=237&amp;fit=clip" alt="" /> <span class="caption"></span></p> <p>While most Australians are comfortable in retirement, the system is failing too many poorer Australians, especially low-income women and retirees who rent.</p> <p>Senior Australians who rent privately are more likely to suffer financial stress than homeowners or renters in public housing. And it will get worse because young Australians on lower incomes are <a href="https://theconversation.com/three-charts-on-poorer-australians-bearing-the-brunt-of-rising-housing-costs-87003">less likely</a> to own homes than in the past.</p> <p>The government’s priority should be boosting <a href="https://www.servicesaustralia.gov.au/individuals/services/centrelink/rent-assistance/how-much-you-can-get">rent assistance</a>, which has not kept pace with rent increases. Raising rent assistance by 40%, or roughly A$1,400 a year for singles, would cost just $300 million a year if it applied to pensioners, and another $1 billion a year if extended to other renters.</p> <p>A common concern is that boosting rent assistance would lead to higher rents. But that’s unlikely: households would not be required to spend any of the extra income on rent, and <a href="https://theconversation.com/rudds-rental-affordability-scheme-was-a-1-billion-gift-to-developers-abbott-was-right-to-axe-it-122854">most would not</a>.</p> <h2>2. Ease the age pension asset test</h2> <p><img src="https://images.theconversation.com/files/317738/original/file-20200228-24664-1yln6g.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=237&amp;fit=clip" alt="" /> <span class="caption"></span></p> <p>While retirement incomes are adequate for most retirees, the age pension <a href="https://www.servicesaustralia.gov.au/individuals/services/centrelink/age-pension/how-much-you-can-get">assets test</a> excessively penalises people who save more for their retirement.</p> <p>Before January 1, 2017 retirees with assets above the threshold lost $1.50 of pension per fortnight for every $1,000 of assets above the threshold. In 2017 the Coalition lifted the threshold but also lifted the withdrawal rate to $3 of pension per fortnight for each $1,000 of assets.</p> <p>The changes resulted in very high effective marginal tax rates on retirement savings, so much so that a typical worker who saves an extra $1000 at age 40 increases their retirement income by only $25 each year, or $658 over 26 years of retirement, which is a <a href="https://grattan.edu.au/report/money-in-retirement/">negative return</a> on money saved for decades.</p> <p>The age pension withdrawal rate should be cut to $2.25 per fortnight for each $1,000 of assets above the threshold. This would cost the budget about $750 million a year.</p> <p>For middle and high-income workers, this change would have a bigger impact on retirement incomes per government dollar expended than boosting compulsory super.</p> <h2>3. Boost Newstart</h2> <p><img src="https://images.theconversation.com/files/317734/original/file-20200228-24685-1m16m5p.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=237&amp;fit=clip" alt="" /> <span class="caption"></span></p> <p><a href="https://www.servicesaustralia.gov.au/individuals/services/centrelink/newstart-allowance">Newstart</a>, together with the disability support pension, provides an important safety net for Australians who are unable to work right through to retirement age.</p> <p>Yet while the <a href="https://www.servicesaustralia.gov.au/individuals/services/centrelink/age-pension">age pension</a> and <a href="https://www.servicesaustralia.gov.au/individuals/services/centrelink/disability-support-pension">disability support pension</a> are indexed to wages, Newstart is not. It only climbs in line with inflation. It should be increased by $75 a week and then indexed to wages going forward.</p> <p>This would <a href="https://www.theguardian.com/australia-news/2018/sep/17/push-to-raise-newstart-allowance-by-75-a-week">cost a lot</a> but it would help the <a href="https://theconversation.com/5-charts-on-what-a-newstart-recipient-really-looks-like-125937">growing legions</a> of older Australians, many of them women, who find themselves among the long-term unemployed in the years leading up to retirement, or are forced to retire early. And it would lift many more younger Australians out of poverty.</p> <h2>4. Include the home in the pension assets test</h2> <p><img src="https://images.theconversation.com/files/317739/original/file-20200228-24701-1urtm3l.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=237&amp;fit=clip" alt="" /> <span class="caption"></span></p> <p><a href="https://www.smh.com.au/national/soaring-cost-of-housing-for-poorest-australians-is-driving-inequality-grattan-institute-20190906-p52ot2.html">Falling rates of home ownership</a> mean we are at risk of creating an underclass of retirees who rent.</p> <p>And our retirement incomes system makes this worse by favouring homeowners over renters. Once a person is retired, their home is <a href="https://www.servicesaustralia.gov.au/individuals/services/centrelink/age-pension/how-much-you-can-get/assets-test/assets#assetstestlimits">treated differently</a> to their other assets. Which is why <a href="https://www.theaustralian.com.au/nation/politics/elderly-in-1mplus-homes-raking-in-63bn-in-pensions/news-story/30cbe2423577d46f5489ec39b673f8f4">$6 billion</a> in pension payments go to people with homes worth more than $1 million.</p> <p>It’s time for more of the value of the family home to be included in the pension assets test. Counting more of the home above some threshold (such as $500,000) would be fairer and would save the budget up to $2 billion a year.</p> <p>No pensioner would be forced to leave their home. Pensioners with valuable homes could continue to stay at home and receive the pension under the Government’s <a href="https://www.servicesaustralia.gov.au/individuals/services/centrelink/pension-loans-scheme">pension loans scheme</a>, which recovers debts only when homes are eventually sold.</p> <h2>5. Fix super tax breaks</h2> <p><img src="https://images.theconversation.com/files/317743/original/file-20200228-24676-1whwfak.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=237&amp;fit=clip" alt="" /> <span class="caption"></span></p> <p>Superannuation tax breaks <a href="https://treasury.gov.au/sites/default/files/2020-01/complete_tbvs_web.pdf">cost a lot</a> – tens of billions each year in foregone revenue, with half the benefits flowing to the top one fifth of income earners, who already have enough resources to fund their retirements.</p> <p>And the costs are set to climb further as super balances climb. The cost of the earnings concessions alone is set to climb from $17.4 billion to $20.8 billion over the next four years.</p> <p>Three reforms would keep them in check.</p> <ul> <li> <p>Voluntary contributions from pretax income should be limited to $11,000 a year. This would save the budget about $1.7 billion a year.</p> </li> <li> <p>Contributions from post-tax income should be limited to $250,000 over a lifetime, or to $50,000 a year. It won’t save the budget much in the short term, but in the longer term it will plug a large hole in the tax system.</p> </li> <li> <p>Earnings in retirement – currently untaxed for people with <a href="https://www.ato.gov.au/Individuals/Super/Withdrawing-and-using-your-super/Transfer-balance-cap/">superannuation balances less than $1.6 million</a> – should be taxed at 15%, the same as super earnings before retirement. Doing so would save the budget about $2 billion per year at first, and much more in future.</p> </li> </ul> <p>These changes to super taxes free up money to help Australians who need help without hurting the retirement prospects of middle Australians.</p> <p>Australia’s retirement incomes system works well, but there are things that need fixing.</p> <p>The reforms we propose would make retirement fairer, save taxpayers’ money, and ensure that all Australians can enjoy a comfortable retirement free from poverty.</p> <p> </p> <p><span><a href="https://theconversation.com/profiles/brendan-coates-154644">Brendan Coates</a>, Program Director, Household Finances, <em><a href="https://theconversation.com/institutions/grattan-institute-1168">Grattan Institute</a></em> and <a href="https://theconversation.com/profiles/jonathan-nolan-575166">Jonathan Nolan</a>, Associate, <em><a href="https://theconversation.com/institutions/grattan-institute-1168">Grattan Institute</a></em></span></p> <p>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/forget-more-compulsory-super-here-are-5-ways-to-actually-boost-retirement-incomes-132655">original article</a>.</p>

Retirement Income