Starting to think about what’s going to happen in retirement? What money is going to be available to meet your expenses once the income stops? Will you be entitled to the age pension? Is there anything you can do to get the most out of your super between now and calling it an end?

A tailored retirement plan will answer these and many more questions. Planning for your retirement is essential if you want to get the most out of your savings as well as provide you with some direction and guidance in enjoying the next phase of your life. You have worked hard and now is the time to relax and enjoy the benefits and not worry about whether you are doing everything correctly, or whether your co-worker is in a better position then you because they have sought some advice and put in place a retirement plan that is specific to their needs.

A recent industry study highlights that some 86% of Australia’s 5.5 million baby boomers are, in varying degrees, financially under-prepared for retirement. Women in particular have much lower super balances then their male counterparts.

There is also a growing reliance on the family home to help close the retirement savings gap, with almost half planning to move house once retired, and more than a quarter expecting to downsize.

Equally surprising, is the proportion of unretired over 50s – over a third – identified in the survey as now having (intergenerational) financial dependents.

It can be easy to not focus on superannuation; it is something that can be looked at as I get closer to retirement, many people seem to think. Often more central to people’s financial awareness is what is happening in their bank accounts, the shares they own or their mortgage, then what is going on with their super fund. Super is just as important. Super is a tax concessional investment vehicle which offers many advantages to other forms of investing, yes you generally can’t access the funds until you reach a certain age but the funds are yours and you should know whether everything is being done in an optimal fashion.

There are strategies relevant for every stage of your working life that can help maximise super savings. If you are over 55 and have not given much thought to your retirement it is even more important to begin planning now. Would you wait until the last minute to plan that big once in a lifetime overseas holiday? Or would you research various places to stay, how much money you will need, what do you want out of the holiday well in advance and then kick back content you have done all you can, looking forward with excitement rather then panic or unease. Retirement is the ultimate once in a lifetime holiday. How prepared you are is up to you.

So congratulations on buying your new home or investment property.

Now that you own the home of your dreams or that new investment property it is vital that you protect it and the belongings you have in it.

Many make the mistake, particularly when seeking insurance over the internet, to simply select an amount for the home and contents and go no further.

Unfortunately there is more to protecting your assets than this.

Did you know that many items are only covered to a fixed amount and that others such as jewellery, CDs,DVDs, paintings and collections also have limits which we may be able to increase. For example individual items of jewellery are only covered to $1,000 for each item and only at the home. How much is that engagement ring worth?

Speaking of that engagement ring you may have noticed that I said covered “at the home” so it is important to consider what items are regularly taken outside the house

Did you also know that if you bought a home or unit as an investment the insurance is different?

All the above may seem complicated but we will be happy to help you structure your cover to protect those valuables that are so important or that investment property that you just purchased.

Profile - Glenn Olney

Glenn Olney is an Authorised Representative of Resilium Pty Ltd (previously AMP General Insurance) and brings to Personal Wealth Group over 20 years banking experience performing in a number of senior management positions followed by 11 years as business manager of a building company. Glenn is committed to protecting our clients assets by arranging the appropriate types of insurance to ensure they are covered in the event of an accident.

Outside of business Glenn is actively involved in volunteer work leading a team of people who go out and assist in some of Sydney’s most disadvantaged areas. He was recently honoured in front of 23,000 people in recognition of his commitment to helping others. He is an enthusiastic fly fisherman who ties his own flys and enjoys the travel this pastime allows.

The hectic spring season is behind us and Summer is here. It’s time for a short breather over the holidays for the currently hot property market. Add to that we have historically low interest rates – both fixed rates and variable rates – this Summer should be no exception. As expected the RBA has reduced the Cash Rate to a record low of 2.5% (by comparison, the cash rate in August 2008 was 7.25% - almost 3 times the current level). What’s more, the RBA’s comments that the Aus $ remains high, and that there remains uncertainty about the economy rebalancing away from mining investment to other sources of growth, whilst inflation as it’s primary focus appears relatively benign, leaves the door open for further rate cuts into next year.

In the short term it appears the risks are skewed to the downside for official interest rates – not good news for those relying on income from deposits or savings accounts - but certainly good for those with current mortgages or looking to borrow to invest or purchase in the short term. Hence, affordability has increased significantly over the past 18 months with the downward trend of mortgage interest rates, and the more recent of these cuts appear to be accompanied by an upward trend in residential house prices….in Sydney at least.

Now purchasing or selling a property for the majority of people involves borrowing or debt. To many of us at the hectic time of applying for finance, the focus is on obtaining the loan not necessary considering that the next 5 years or beyond will hold and therefore having the foresight to consider how that loan may need to be structured to most efficiently position you for the future as well as the urgency of now.

At PWG we believe it is important to ask yourself these questions:

• What is this loan meant to do for me – how long will I own this property?
• Will this be a home or an investment and is that likely to change?
• What are the tax or social security impacts?
• Do I need to borrow for other purposes at the same time?
• How much should I borrow?
• What are the costs or consequence’s of borrowing?
• How do I best structure my debt to fit into my other goals and the way I manage my cash / money?
• Should I have a Fixed Rate / Variable Rate or both?
• What is an Offset Account and should I have one?
• We are going to have kids in the next few years so how to we manage increased costs on one income throughout a short period?
• Do I need a pre-approval and what does it do for me?

There are many more questions to consider and answer than simply those above. If you are looking at borrowing to purchase please speak to us first to make sure you consider all the relevant questions and develop a well thought out plan to ensure the right loan structure and debt management solution is in place.

We can assist you to obtain finance as Accredited Mortgage Consultants / Brokers – but also bring a financial planning context to our views which means we consider your real life affordability; your financial position now and in the future; as well as what you want to achieve down the track. We are best placed to guide you through the structuring of your loans; obtaining the finance; coordinating this with your conveyancing; and assisting you to manage the debt(s) going forward – whether that be to maintain your tax effectiveness or clear the debts as soon as possible. To us obtaining the finance is only the start – managing that loan and is just as important if not more so.

 

 

• Oliver's Insights