Sub Heading

Provision Newsletter

Downsizing should be a choice, not a wealth strategy

Posted On:Feb 19th, 2018     Posted In:Provision Newsletter Articles    Posted By:Provision Wealth

Downsizing to a coastal town or regional hub can hold lifestyle appeal, but don’t bank on it as a strategy to fund your retirement.

For many empty nesters, who may not have had the benefit of employer-paid super throughout their working life, the value of the family home can be seen as the jewel in the crown of a retirement funding

Read More

Downsizing to a coastal town or regional hub can hold lifestyle appeal, but don’t bank on it as a strategy to fund your retirement.

For many empty nesters, who may not have had the benefit of employer-paid super throughout their working life, the value of the family home can be seen as the jewel in the crown of a retirement funding strategy. After all, who cares about the Age Pension when you’re sitting on good real estate?

Swapping a high-maintenance family home for something smaller can give you more time for the things you enjoy, but keep in mind, it may not deliver the funds needed to enjoy a quality retirement.

Be aware of the ‘sea change’ downsides

The Association of Superannuation Funds of Australia (ASFA) did the sums recently, finding that downsizing for a sea or tree change has the potential to free up valuable home equity.

As a guide, sea changers moving from the Sydney metro area to the popular NSW retiree haven of Forster-Tuncurry could pocket up to $650,000 in home equity thanks to the difference in median home prices between the two regions.

However, there are drawbacks to consider. Choosing to live outside our big cities can make it harder to access specialist medical care – something that becomes more important as we age.

In addition, property price growth in our major state capitals tends to outpace regional areas. This matters because further down the track you may need to rely on home equity to fund the rising cost of aged care.

Remaining in the same city can be even less rewarding

Downsizing within the same city often provides fewer financial benefits than a sea or tree change. Property transaction costs in particular will eat away a substantial chunk of your home equity.

In Sydney for instance, the median apartment price is $762,509, and on that price you can expect to pay $29,807 in stamp duty alone. Once you’ve set aside sufficient proceeds to live off comfortably for the rest of your life, you could be faced with taking a very substantial downgrading in the type of housing or lifestyle you can afford.

The bottom line is that relying on the value of your home should not form the focus of your retirement plans.

A better solution? Your long-term plan

If you’re eager to cut housework or garden maintenance, downsizing can be a good option. However, if you’re hoping to fund a decent retirement, it may make much more sense to grow a separate pool of investments – preferably throughout your working life.

That said, good advice can make a measurable difference to your final nest egg at any life stage, and it’s never too late to get started.

The beauty of relying on your investments rather than your home to fund retirement, is that it gives you choices. If you don’t want to sell a much-loved family home, you don’t have to. And, if a more compact home is on your retirement radar, you can afford to make the move on your own terms, buying where and whenever you choose.

For tailored advice that lets you make the most of all your assets, not just your home and to enjoy a fulfilling retirement.Contact us on |PHONE|

Paul Clitheroe is a founding director of financial planning firm ipac, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.

Source : AMP 15 February 2018 

This article provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.

 

Read Less

Love and money? It’s not about control

Posted On:Feb 05th, 2018     Posted In:Provision Newsletter Articles    Posted By:Provision Wealth

With Valentine’s Day around the corner, it’s a good time to explore shared ideas, and how you manage money as a twosome.

Our approach to managing household finances can make a big difference to the health of a relationship. Thankfully, the old line about “I earn the money. She spends it” no longer has relevance in modern relationships. Today’s lifestyles, housing

Read More

With Valentine’s Day around the corner, it’s a good time to explore shared ideas, and how you manage money as a twosome.

Our approach to managing household finances can make a big difference to the health of a relationship. Thankfully, the old line about “I earn the money. She spends it” no longer has relevance in modern relationships. Today’s lifestyles, housing commitments and our career ambitions mean that in many households both adults work, each making a valuable contribution to overall income.

Yet the question of who controls the purse strings continues to throw up some interesting responses. I’ve come across all sorts of research on this issue, and the general gist is that the majority of men say they make the financial decisions in a household while the majority of women believe they control the money. Confusing, right?

Harness the power of two

The thing is, the real issue shouldn’t be who controls the cash but rather how you manage your finances as a couple.

This is an area where I see plenty of variations, and there’s no right or wrong approach. Some couples like to maintain almost entirely separate financial lives by only pooling money where necessary to pay the mortgage or rent and other shared bills.

Others maintain a joint account, pooling most or part of each individual pay packet to cover household expenses, and holding only a limited quantity of cash in individual accounts to cover personal spending like hobbies or treats.

Exactly how you run your system is entirely a matter of choice, and it is a case of determining what works best for you and your partner.

Maintaining multiple bank accounts can mean paying more in bank fees, though this can be a small price to pay if it gives you both a degree of financial independence – this in itself can be a relationship saver.

Know what works for you

There is virtually no limit to the options available to divide and share a household’s combined income and expenses. What matters is that you take the time to devise a system that works for you. Be prepared to fine-tune your approach, or scrap it altogether, if it isn’t living up to expectations. The whole point of the exercise is to work as a team.

At the very least, both parties to a couple should know where household money is being spent. Having a clear idea of your combined financial position could stand you in good stead – and help you avoid unpleasant surprises if the relationship ever hits the rocks.

In my experience though, working together to achieve shared financial goals can really strengthen a relationship over time.

For a tailored plan of action that can help you and your spouse or partner achieve financial harmony – and harness the power of two , please contact us on |PHONE| for assistance .

Source : AMP 2 February 2018 

Paul Clitheroe is a founding director of financial planning firm ipac, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.

 
This article provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person..

 

Read Less

What is the retirement age in Australia?

Posted On:Jan 31st, 2018     Posted In:Provision Newsletter Articles    Posted By:Provision Wealth

With no definitive retirement age in Australia, the date you exit the workforce will probably come down to personal circumstances and whether you can afford it.

The age you retire in Australia isn’t set in stone. You can really retire whenever you want to, but health, financial commitments and your ability to fund the lifestyle you want will play a big

Read More

With no definitive retirement age in Australia, the date you exit the workforce will probably come down to personal circumstances and whether you can afford it.

The age you retire in Australia isn’t set in stone. You can really retire whenever you want to, but health, financial commitments and your ability to fund the lifestyle you want will play a big part.

For this reason, you may want to consider the age you’ll be able to access your super and the government’s Age Pension (if you’re eligible for it), which typically won’t be at the same time.

If it’s something you’ve been thinking about, here’s some other related information.

What age are Australians retiring? 

The average age at retirement for persons aged 45 years and over in Australia, according to 2016–17 statistics, is 55.3 years—58.8 years for men and 52.3 years for women1.

Figures released last year also revealed that more Australians were retiring later in life in comparison to years gone by and retirement was not necessarily a one-time event, with 26.7% of those in the 45 to 54 and 55 to 59 age groups returning to employment annually2.

When can I access my super? 

Generally you can access your super when you:

  • reach preservation age and you retire

  • cease an employment arrangement after age 60

  • reach preservation age and implement a transition to retirement strategy

  • turn 65, whether you remain in the workforce or not.

What is my preservation age?

Your preservation age is when you can start to access your super. It will be between 55 and 60 depending on when you were born.

Check out the table below to see what your preservation age is3.

Date of birth

Preservation age

Before 1 July 1960 

55

1 July 1960 – 30 June 1961

56

1 July 1961 – 30 June 1962

57

1 July 1962 – 30 June 1963

58

1 July 1963 – 30 June 1964

59

From 1 July 1964

60

How can I take my super? 

If you’re wondering what you might do with your super money when you do access it, remember there will be a number of things to weigh up and look into.

Taking super as a lump sum 

A lump sum could help you pay off your home loan or other outstanding debts, but there may be tax implications to consider and you should think about what you’ll live on if you have no super left.

The government’s Age Pension could be one option, although if you’re pinning your hopes entirely on government support, you should consider the sort of lifestyle it might fund.

June 2017 figures show a 65-year-old retiring today needs an annual income of $43,695 to fund a ‘comfortable’ lifestyle in retirement, assuming they are relatively healthy and own their home outright4. By comparison, the max Age Pension rate for a single person is around $23,254 annually5.

For more information, check out our article – Should I take my super as a lump sum.

Moving it into an account-based pension (or allocated pension)

If you’re thinking that you’d like to receive a regular income in retirement, an account-based pension (or allocated pension) could be a tax-effective option.

While the most you’ll be able to transfer into these pension accounts is $1.6 million, you won’t be limited to what you can take out. However, each year you’ll need to withdraw a minimum amount.

For more information, check out our article – Making sense of account-based pensions.

Purchasing an annuity with your super 

An annuity provides a series of regular payments over a set number of years, or for the remainder of your life, depending on whether you opt for a fixed-term or lifetime annuity.

You will however be sacrificing some flexibility, as you can’t easily make lump sum withdrawals and life expectancy is also a major consideration.

For more information, including the pros and cons, read our article – What’s an annuity?

What about the Age Pension? 

Currently, to be eligible for a full or part Age Pension from the government, you must be 65 or older and satisfy an income test and an assets test, as well as other requirements6.

In July, the qualifying age for the Age Pension increased to 65 and 6 months, and it will continue to increase by six months every two years until 1 July 2023 when the qualifying age will be 67.

You can check out your Age Pension eligibility age below7.

Date of birth

Age Pension eligibility age

Before 1 July 1952

65 years

1 July 1952 – 31 December 1953

65 years and 6 months

1 January 1954 – 30 June 1955

66 years

1 July 1955 – 31 December 1956

66 years and 6 months

From 1 January 1957

67 years

Meanwhile, it’s important to remember that what you do, and at what time you do it, could have tax implications and may impact your social security entitlements. This is why it’s important you do your research and explore the alternatives with your financial adviser.

Can I return to work if I’ve taken my super?

Generally, you can, but if you previously declared your permanent retirement, you may need to prove your intention was genuine at the time.

According to retirees who did return to full or part-time employment, the most common reasons why they decided to go back to the workforce was financial necessity, followed closely by boredom8.

For more information, check out our article – Can I go back to work if I’ve taken my super?

To determine what will work best for you, it might be an idea to contact us on |PHONE|

Source : AMP 24 January 2018 

ABS – Retirement and Retirement Intentions, Australia, July 2016 to June 2017 paragraph 6
The Household, Income and Labour Dynamics in Australia (HILDA) Survey 2017 pages 65, 67
3, 4 The Australian Taxation Office – Accessing your super 
ASFA retirement standard – June 2017 quarter table 1
6, 7, 8 Department of Human Services – Age Pension – eligibility and payment rates 
ABS – Australian Social Trends – Older people and the labour market paragraph 26

This article provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person..

Read Less

7 healthy habits that could improve your bank balance this year

Posted On:Jan 31st, 2018     Posted In:Provision Newsletter Articles    Posted By:Provision Wealth

 

See how you could benefit your body, while upping the change in your back pocket at the same time.

For many of us, the new year often begins with good intentions and a handful of new year resolutions, which may or may not begin right on 1 January. You might be working toward the day you return to work, or sometime over

Read More

 

See how you could benefit your body, while upping the change in your back pocket at the same time.

For many of us, the new year often begins with good intentions and a handful of new year resolutions, which may or may not begin right on 1 January. You might be working toward the day you return to work, or sometime over the next few weeks.

Whatever your start date, if you’re like many Australians, your plans for the year ahead revolve around health and money, with data showing that popular pledges for 2018 include things like quitting smoking, cutting down on takeaway, drinking out less, and paying off debt1.

The good news is, findings from comparison site Mozo reveal that those who persist in these areas could potentially save more than $20,000 a year2. We check out some of the figures.

Ways to boost vitality and save

1. Chuck the ciggies

If your parents, partner, friends or kids haven’t given you enough grief about this one already, the potential savings to be made could be the motivation you need. Apart from the obvious health benefits, a pack-a-day smoker (assuming a pack is around $35) can burn over $12,000 a year3.

2. Cut the boozy nights out

When you add up the drinks, bar snacks and Maccas or kebab run on the way home, these nights out can end up costing quite a bit. On a good note, cutting out just two nights of drinking a week could save you around $4,000 over a 12-month period4.

3. Ditch the takeout for something home cooked

Have you ever added up what you spend a week on takeaway food? Figures reveal you could save around $3,000 annually by swapping three takeaway dinners for home-cooked meals—plus, a further $2,400 by taking the leftovers to work, rather than buying a $10 lunch at the café down the road5.

4. Write your grocery list and stick to it

Over a 12-month period, Aussies will waste more than four million tonnes of food, enough to bridge the gap between here and New Zealand three times6. Having a grocery list based on what you need and plan to cook means you can avoid buying too much, as well as food that’s not that good for you.

5. Opt for water over the takeaway coffee

Your intake of coffee might not be a bad thing, but giving up even one takeaway coffee Monday to Friday could save you around $1,000 a year7. Plus, substituting this with more water might be a good idea, as water has numerous benefits when it comes to your health and body8.

6. Combine exercise with your social life

Rather than meet up with friends for a beer, wine, greasy burger, hot chips or all of the above (as good as it sounds), swap that for a scenic walk or swim at the beach with friends. If you’re pet-less and have a mate with a cute dog that can come along with you, that might help too.

Meanwhile, if you’re able to stick to this plan and haven’t been using your gym membership that much, opting for a DIY-fitness plan, and cancelling any unused memberships could save you around $800 a year9.

7. Skip public transport and walk to work

You might not be able to walk all the way, depending on where your job is located, but you may be able to shave off some of what you pay on public transport by walking or riding your bike part of the way, while getting some exercise at the same time.

Extra motivation

These ideas might not be anything new, but when you see the figures and realise the potential savings you could make, you might be more inclined to stick with healthier habits, particularly if it means the end reward is enough money for a European holiday or another goal you’ve been working toward.

Please contact us on |PHONE| if you seek further discussion .

1-5, 7, 9 Mozo media release – New Year resolutions could bank an extra $30K in 2018
Foodwise – Food waste fast facts – table 1
BetterHealth Channel: Water – a vial nutrient – section 1

Source : AMP 25 January 2018 

This article provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person..

 

 

Read Less

Bitcoin – is it really for you?

Posted On:Jan 31st, 2018     Posted In:Provision Newsletter Articles    Posted By:Provision Wealth

Some people may have made big money, but plenty of latecomers would have experienced dreadful losses.

If I could sum up the contents of my junk emails over the last 12 months in a single word it would be: Bitcoin. I can’t tell you how many unsolicited invitations I’ve received to start trading bitcoin. This alone is a concern but when

Read More

Some people may have made big money, but plenty of latecomers would have experienced dreadful losses.

If I could sum up the contents of my junk emails over the last 12 months in a single word it would be: Bitcoin. I can’t tell you how many unsolicited invitations I’ve received to start trading bitcoin. This alone is a concern but when heavy hitters like the International Monetary Fund (IMF) start calling out the risks of bitcoin, the warning bells should definitely start ringing.

Bitcoin is one of many “cryptocurrencies” or digital currencies that aren’t backed by governments or banks. Instead it relies on a decentralised peer-to-peer network called a blockchain – a vast digital ledger that uses complex calculations to record all transactions made using bitcoin.

The technical details are complex. What’s much easier to grasp is the meteoric rise of bitcoin.

Big gains means big risks

For many years you could buy bitcoin for the price of a restaurant meal. Then in 2016 it started to take off. By mid-December 2017 bitcoin had soared in value to $AUD25,410. And that’s where things headed south. In mid-January 2018 bitcoin’s value had tanked to $AUD12,893.

As so often happens in speculative markets, some people have made big money. But plenty of latecomers would have experienced dreadful losses.

Security concerns

Hindsight is always a wonderful thing. But one of the fundamental rules of investing is that big returns come with big risks. Another maxim for successful investing is to only invest in something you understand, and it’s a reasonable bet plenty of people don’t fully grasp how cryptocurrencies work.

The problem is, crooks do. A report by the University of Cambridge notes that 22% of bitcoin exchanges having experienced security breaches. The same report says less than half the cryptocurrency payment companies in the Asia-Pacific, Europe and Latin America hold a government license.

It’s hardly reassuring stuff. And just recently the IMF warned that cryptocurrencies can “post considerable risks as potential vehicles for money laundering, terrorist financing, tax evasion and fraud”.

Yet despite all this, investors are still pouring money in, hoping to ride a second wave of gains.

Is bitcoin a good investment?

History is littered with the fallout from speculative markets, and the pattern is often similar – a steep rise in value fueled by investors coming on board late in the cycle for fear of missing out. 

For my money, a good investment is backed by a quality asset – like shares in a successful company, a well-located investment property, or units in a managed fund run by a reputable team. There are plenty such investments to choose from, and your adviser can help narrow down the choice of what’s right for you.

As it stands, cryptocurrencies are largely unregulated, and without the backing of an underlying asset there is no real reason why their value should continue to rise other than demand from over-exuberant investors. If you do plan to invest in bitcoin, my advice is to only tip in money you can afford to lose.

 Please contact us on |PHONE| if you seek further discussion or assistance .

Paul Clitheroe is a founding director of financial planning firm ipac, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.

Source : AMP 24 January 2018 

 

This article provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person..

 

 

Read Less

Are you eligible for government school subsidies?

Posted On:Jan 15th, 2018     Posted In:Provision Newsletter Articles    Posted By:Provision Wealth

Get up to speed with the government subsidies you may be able to claim before the kids go back to school.

With 2018 now in motion, many parents and carers are looking at how they’ll cover school fees for the year ahead, not to mention other costs, such as uniforms, shoes, stationery and equipment.

The Schoolkids Bonus was phased out in July

Read More

Get up to speed with the government subsidies you may be able to claim before the kids go back to school.

With 2018 now in motion, many parents and carers are looking at how they’ll cover school fees for the year ahead, not to mention other costs, such as uniforms, shoes, stationery and equipment.

The Schoolkids Bonus was phased out in July 20161, but the good news is, you may be eligible for some financial assistance through subsidies in your state or territory, which may be means tested or require you to hold a concession card2.

State and territory allowances

Attending a government school, from pre-school through to high-school, is currently estimated to cost around $70,454 per child, assuming they live in an Australian capital city3.

With that in mind, it’s worth knowing the rebates and tax breaks you as a parent or guardian may be eligible for.

New South Wales

If you drive the kids to school because there’s no public transport where you live, you may be eligible for the School Drive Subsidy

There are also two financial support programs for eligible families who have children boarding away from home to complete their secondary education. To find out more, check out information on the Living Away from Home Allowance and Boarding Scholarship for Isolated Students.

In addition, from 31 January 2018, children in kindergarten through to Year 12 (including those that are home-schooled) will be eligible for an Active Kids Voucher, providing parents and guardians with $100 to put toward registration and participation costs for sport and fitness activities.

Queensland

If you have secondary-school-age students who are attending state and approved non-state schools, you may be able to receive financial assistance to help with the cost of textbooks and other learning resources. For more details, check out the Queensland state government website.

Living Away from Home Allowance Scheme is also available, while talented students from regional and remote areas, who aren’t eligible, may apply for Queensland Academies Isolated Students Bursary.

Victoria

Depending on your situation, your family may be eligible to receive free or discounted uniforms, shoes, textbooks, stationery and more through the not-for-profit organisation State Schools’ Relief.

The Camps, Sports and Excursions Fund may also provide payments so eligible students can take part in school trips and various sporting activities.

South Australia

The School Card scheme assists with expenses, such as school fees, uniforms, camps and excursions. This is available for eligible students attending government schools.

The State Education Allowance is also available to geographically isolated parents with children at secondary level who board away from home to attend school. The allowance assists with travel, boarding and other education-related expenses.

Western Australia

The Secondary Assistance Scheme is available to parents who hold eligible concession cards. It provides an education program allowance, which is paid to the school, and a clothing allowance that can be paid to the school or parent.

Boarding Away from Home Allowance also assists geographically isolated families with boarding and education costs for primary and secondary-school-age children.

Tasmania

The Student Assistance Scheme assists with the cost of school levies. It provides support to low-income families to help with the cost of students in kindergarten through to year 12.

Northern Territory

The Back to School Payment Scheme provides financial assistance to parents and guardians of children enrolled in a Northern Territory school, or who are registered for home-schooling. The entitlement can be used towards things like uniforms, books and school camps.

There’s also a Sport Voucher Scheme that assists with sport, recreation and cultural-activity costs. And, you may be eligible for financial help if your child has to live away from home or travel long distances to go to school. Check out info on the Northern Territory state government website.

Australian Capital Territory

The Secondary Bursary Scheme and Student Support Fund programs provide assistance to eligible low-income earners in the state with dependent full-time students in years seven to 10.

Commonwealth Government assistance

Commonwealth Government assistance may also be available for eligible young people through Youth Allowance and various Assistance for Isolated Children programs.

There’s also a Child Care Benefit which may help with the cost of out-of-school care, vacation care, pre-school and kindergarten. Eligibility criteria and an income test do apply, and note that from 2 July 2018, there will be a new child care package and different eligibility rules may apply. 

Another initiative the Australian Department of Social Services is involved in is Saver Plus – a program that’s delivered in 60 communities across the country. It delivers up to $500 in matched savings for education costs, and provides free financial education workshops and support.

Other considerations

The cost of kids4 almost doubled over a ten-year period, so it’s worthwhile making the most of the subsidies available to you.

In the meantime, speak to your school about what financial support is available and talk to other parents who have children at the same school or schools nearby.

For further assistance please contact us on |PHONE|

Source :AMP 10 January 2108

 This article provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person..

Australian Department of Human Services – Schoolkids Bonus
Money Smart – Reducing back to school costs (Government assistance with school costs)
ASG Supporting Children’s Education homepage (Table: Your child’s future education costs)
4 AMP.NATSEM report – the cost of raising children in Australia (page 2)

Read Less
Our Team Image

AMP Market Watch

The latest investment strategies and economics from AMP Capital.

Read More >>
Client stories Hand Shake Image

Client Stories

Hear from some of our customers who have broken out of debt and secured their future financially.

Read More >>

Provision Insights

Subscribe to our Quarterly e-newsletter and receive information, news and tips to help you secure your harvest.

Newsletter Powered By : XYZScripts.com