Money & Legal

Welcome to the @boutSeniors finance pages. Find out about insurance and legal matters, retirement income issues, reverse mortgages and much more.

Filing your tax return

With only a few weeks to go until the end of the tax year, now is the time to get all your documentation in order, and decide the easiest way to file your return this year.

If you don’t have ready access to a computer, you can always use the tried and tested method of completing your tax return by hand. This can take some time so get a head start and fill in the information you have to hand now. Forms are available from most newsagents, can be requested from the ATO by calling 1300 720 092, from ATO office shopfronts, or online from the ATO.

If your tax return is a little more complicated, then it is best to seek the services of a qualified tax accountant. Make sure you have all your receipts and information to hand, to make the process as quick and streamlined as possible and to minimise all the fees! If you don’t have a regular tax accountant, or are looking for a new one, always make sure they have the necessary qualifications. For more information on finding a qualified tax accountant in your area, click here.

E-tax is a simple and efficient way of submitting your return online. If you have all your information to hand, and do not need the services of a qualified tax accountant, E-tax is quick and free to use. As many organisations have a legal requirement to report your income details to the ATO. And the ATO hold a certain amount of information on your file, there is the option to have data filled in your tax return from this data. This makes the whole process even quicker, as all you have to do is review the information and fill in the blanks. More information on E-tax can be obtained from the ATO website.

Financial choices confusing

Almost one in two Australians believe that financial investments and superannuation are too complicated to understand properly, according to a report from the Australia Institute. A similar proportion or respondents also consider mobile phone contracts and private health insurance to be too complicated.

The findings are reported in a new Discussion Paper, Choice Overload: Australians Coping with Financial Decisions, by Institute Research Fellow Josh Fear. The research also revealed that many Australians, particularly older people and those on lower incomes, are uneasy about the increasing complexity of financial decision-making.

The report recommends that governments should:
· provide consumers with simple, independent information to compare superannuation and investment products;
· make financial advice more widely available to people who do not wish to use a commercial financial adviser; among other measures
The full paper can be read on the Institute’s website

Lifelong mortgages

Australia’s economy is booming but high inflation and interest rates are making it more difficult for those Australians in the 50-64 year-old demographic to own their own home.

In pursuit of the great Australian dream of owning our own home, mortgages are a necessary evil, however, many of us may never actually own our own home outright. The percentage of households owning their dwelling fully has fallen to 35.9% in 2006 from 44% in 2001, according to the Australian Bureau of Statistics (ABS). A rise of almost 10% has occurred in empty nester households (50-64 year olds) since 2001, and with reverse mortgages becoming a common way to release capital, lifelong mortgages may be the only way of buying your own home.

Contributing factors to the growing trend of over 50s still paying a mortgage may be:
· purchasing later in life
· redrawing on home loan for travel or household items
· additional loans for renovations
· children staying at home for longer
· compulsory superannuation
· using equity for loans to adult children

To read the full report by BIS Shrapnel, click here.

Financial health check

Financial Planning Week is less than a month away, and now is a good time to review your strategies for short and long-term finances and potentially insulate against price rises.

The Financial Planning Association (FPA) will celebrate Financial Planning Week from 19 to 26 May 2008 by promoting to consumers of all ages and financial circumstances about the benefits of talking to a financial planner.

New Galaxy research to be released during Financial Planning Week shows just 20% of baby boomers use a financial planner.
This means many older people are going it alone with their finances and potentially not gaining any benefit for their hard earned money. By talking to an expert, you can plan for the downturns and still be able to make the most of your money and assets.

The FPA is encouraging seniors to celebrate Financial Planning Week by doing some positive things like establishing a budget for themselves or reviewing financial strategies and being prepared to make necessary changes.

The FPA has suggested a number of ways that seniors can celebrate Financial Planning Week and create their own financial rewards:

· Get your estate in order by writing or revising your will
· Establish an emergency fund
· Review your current level of insurance coverage for your home or personal items
· Choose three financial terms that have always baffled you, resolve to look them up and understand them
· Purchase a subscription to a personal finance magazine for your grandchildren and encourage good financial habits from an early age.

During Financial Planning Week a number of events are being held in cities and regional areas across to country. To find out what is happening in your area go to www.fpa.asn.au and click on the link “Financial Planning Week” or to locate a financial planner near you click on “Find a Planner”.

Fair go

All most people ask for in life is a fair go. Stand up and be counted and help make Australia Fair for all.

This is your opportunity to be heard and get your point across. Issues such as poverty, the environment, housing and welfare, are but a few being tackled by Australia Fair, an organisation geared to towards giving all Australians a fair go.

You can post messages, comment on messages already posted, find out what events are in your area and read publications relevant to your area of concern. Campaigns such as this one need support to build momentum and make a difference. You can help by getting involved in your community, or nationally, as an organisation, or an individual.

To have your say, click here.

Scam awards

The sheer stupidity of internet and financial scams would be laughable – if they weren’t so serious.

The Australian Securities and Investments Commission’s (ASIC) annual Pie In The Sky awards act as a timely reminder that there is always someone willing to take advantage of an unfortunate event. Topping the list of disturbing scams is the Togo lawyer acting on the behalf of a deceased family who were killed in the Boxing Day Tsunami. Sent to people who coincidentally have the same name as the deceased and offering a share of US$17m from the estate, this is also known as a ‘Nigerian letter’ scam. Those targeted are asked to respond by email, claiming a share of the wealth but need to pay a fee upfront.  Needless to say, once the fee is received by the “lawyer”, no money is forthcoming.

The ability to succeed in many of these scams is being able to be unabashed about what you’re doing. Instep Super, Pie In The Sky runner-up were just that.  Advertising on radio, TV and online, they promised returns of between 8 and 20% on superannuation and claimed to be “the best performing superannuation fund in Australia”. Most people assume that if they hear or see an advertisement in the mainstream media then it must be by a legal company. Not so in this case. When investigated, ASIC found that Instep Super did not have the required financial license nor did they have evidence to back up their “best performing super” claim.

Don’t be fooled into thinking it could never happen to you. Financial scammers are getting more and more sophisticated, using the growth in online media to their advantage. Many financially savvy people have been stung. For the chance to win $100 for nominating a scam for the 2009 Pie In The Sky Award or to find our more about the scams going around, visit FIDO’s website.

Loveless scam

Looking for love online might be bad for your bank balance. Be aware of the latest scam doing the rounds.

Hundreds, if not thousands of Australians every day are being scammed for thousands of dollars all in the name of love. Men and women are lured by the promise of a loving relationship by online Nigerian fraudsters posing as Australian retirees. 

It’s estimated that victims stump up and average of $35,000 when given the sob story by someone they believe to be having a loving relationship with and they’re prepared to take time laying the groundwork before asking for money. In one case, Patricia developed a relationship with “David’ over six months, and, during a trip to Nigeria, he claimed he was mugged and needed $8,500, a substantial sum of money for anyone. She never saw him again and when realising she had been scammed, felt suicidal.

A good rule to keep in mind would be that if you can’t afford to loose it, don’t give it. To read more, click here.

Mym’s top tips on saving money

· Save trips to the shop, have a well stocked pantry
· Enjoy the simple things in life; if your budget doesn’t stretch to a three course meal at a posh restaurant, try fish ’n’ chips at home and “jazz up” your dinner table.
· The expense of a night at the cinema can add up, how about a DVD at home or try one of SelectV’s television packages – microwave popcorn tastes OK!
· Rather than buy book, borrow them from your local library.
· Always ask your pharmacist for generic medications, don’t assume you’re getting the cheapest.
· Fill up the car on a Monday or Tuesday
· Substitute expensive cleaning products for good old fashioned substitutes and help save the environment!
· Don’t spend lots of money trying to entertain visiting grandchildren, get their imaginations working by making up games or telling stories. 

Shop free days

Could you go for 24 hours without buying anything?
It seems that we’ve no sooner shopped until we’ve dropped for Christmas than we’re being bombarded with adverts for holidays and household goods at “amazing sale prices”.  With the nations’ average credit card debt rising from $946 to $2700 in the past decade, is it time to buck the growing trend in consumerism?

Culture Jammers are trying to convince people to do just that.  On international Buy Nothing Day, the fourth Thursday in November, which is spearheaded by Canadian based Adbusters, it estimates that $38,000 was taken out of circulation by offering to cut up shoppers’ credit cards in Bourke Street mall, Melbourne.  On an average retail day, $22million is spent on household goods alone, making $38,000 a drop in the ocean but a very good place to start. 
With the fourth Thursday in November still some time away, why not try keeping your purse or wallet closed for one day a month, or better still, one day a week and we don’t mean buying more on the days either side!  If you put aside the money you’ve saved on each of these days and invest it, we’re sure it will bring you more joy and peace of mind in the long term than the sum total of consumer goods, you probably won’t even be using in a few months time.

For more information on Buy Nothing Day, click here.

Smart investors

Smart investor is a label we would all like to wear, and smart usually means you have done the research and made the right choice. @boutSeniors website has teamed with the InvestSMART website to offer some excellent financial services tools for our subscribers so you can keep your finger on the pulse when it comes to funds performance.
These tools take the form of comparative tables which enable http://www.aboutseniors.com.au subscribers to compare the top performing, and most popular, managed funds, retirement income funds and superannuation funds. These are graded according to whether the fund has a conservative, balanced or growth emphasis, and rated according to statistics from Morningstar Research and Standard & Poor’s. At a time of massive confusion regarding superannuation and retirement income streams, we have also offered some background on how these structures can fit with your income needs.

Under managed funds, find out the definition of a managed fund, the different types you can purchase, what they do for you, and then compare the top performing and most popular. Click here

On the superannuation page, read why this is a tax-effective way of boosting your savings before comparing most popular and top performing funds. Click here

And on the retirement income streams page find out what retirement income streams are, how you set one up, and which type has the most suitable features for your situation. Then check out the top performing – and the most popular (not always the same thing!). Click here

IMPORTANT: This information has been prepared for distribution over the internet and without taking into account the investment objectives, financial situation and particular needs of any particular person. Neither InvestSMART Financial Services Pty Ltd nor www.aboutseniors.com.au makes any recommendations as to the merits of any investment opportunity referred to on www.aboutseniors.com.au or any related websites. All indications of performance returns are historical and can not be relied upon as an indicator for future performance.

© 2007 Morningstar Research Pty Ltd. All rights reserved. To the extent that the above constitutes general advice by Morningstar, this advice has been prepared by Morningstar Research Pty Ltd ABN: 83 062 096 342, AFSL: 243 161 and does not take account of your objectives, financial situation or needs. Before acting on any advice, you should consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. Please refer to Morningstar’s Financial Service Guide (FSG) for more information at www.morningstar.com.au/fsg.asp and consider the product disclosure statement before making a decision to acquire the financial product.