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Successful investment is not about reacting to market turbulence. It is based on a clear understanding of the long-term nature of wealth creation and how making sensible, unemotional decisions about where and when you will invest. This week we share a downloadable PDF on the Ten Worst Money Mistakes – and how to avoid them written by financial services guru, Louise Biti.
It’s hard to sit tight in a falling stock market, grin and bear it, stay calm. So this week we are offering a useful “how-to” on What to do when the market falls. Written by Dante de Gori, Technical Manager of Clearview Retirement Solutions, it offers a plain-English understanding of how a “steady as she goes” approach to the stock market can result in a more predictable retirement income in a downloadable PDF format. Written before the very sharp falls in recent weeks, it nevertheless shows how you can manage your holdings – even in times of volatility.
Reduce your power bills, reduce your carbon footprint and SAVE up to $3,000* OFF Solar Power thanks to the Government’s Solar Credits scheme. Power a brighter future today! Other incentives are available, enquire now and find out more.
Put your roof to work and save on your power bills with Modern Solar. Right now you can save up to $3,000* off a Solar PV Power System. You can’t go wrong with Modern Solar; who provide a 25-year manufacturer’s warranty on all of our Solar Panels.
Solar power doesn’t just reduce your carbon impact on the environment; it adds value to your home and can save you a huge amount every year on your power bill. Feed-in tariffs allow you to sell the power you don’t use to the grid; these differ between the states so enquire today to see what’s available in your neck of the woods. It’s even possible to sell more power than you use to get income from your panels. Now that’s a step in the right direction!
For instance, NSW residents can save up to $1,300* each year with a 1.5kW system thanks to the gross feed-in tariff!
Call today and speak to a friendly consultant and see what you can do to reduce your reliance on fossil fuels and start clearing the air right away!
Conditions Apply:*Minimum 1.5kW Solar PV Power system applies; Government Rebates are subject to change without notice; Savings correct as at 5 March 2010.
Some 75% of Australians throw out enough personal information to put them at risk of identity fraud. About Seniors provides you with tips on how to secure your personal details, on and offline.
National Consumer Fraud week runs 1-7 March 2010 and is an initiative of the Australasian Consumer Fraud Taskforce (ACFT). The aim of the taskforce is to reduce the incidence and impact of fraud and scams.
Visit www.scamwatch.gov.au or call 1300 795 995 to find out more about scams or report a scam.
Offline
The facts
· 75% of Australians throw out enough personal information in their rubbish to put them at risk of identity fraud (credit card statements, bank statements, utility bills etc.)
· According to The Australian Federal Police (AFP), identity fraud costs the nation up to $4 billion a year
· Personal information such as your date of birth, address, mother’s maiden name and passwords are now as valuable as money. This is enough information for someone to open bank accounts, apply for credit cards, loans and much more under your name.
Read this handy PDF on Protecting your Identity.
Online
Not everyone is trustworthy. The sheer size of the internet and its “virtual” anonymity of transactions and conversations mean ever more vigilance is required. The following tips will assist you to protect your privacy and your financial information online.
1. Get protected and stay protected
To protect your computer from unauthorised users accessing your information, it is important to install and update security software and constantly remember to use it. It is important when installing your anti-virus packages to set up the scanner to look over your system daily for any suspicious programs
2. Be smart and stay smart
Think before you click. Most importantly, don’t open any suspicious emails from unknown addresses. When you are asked to provide a password, make sure you use strong passwords, which involve at least one letter and number, and change this password every three months.
Always remember if it sounds too good to be true, it usually is!
3. Make payments safely and securely
When purchasing online, it is important to remember before you enter your credit card details that all secure websites are enabled with a padlock in the web browsers’ frame. Another way to check if you are on a secure site is to look at the website address when you are prompted to submit your credit card details. The site address should begin with “https” with the “s” standing for secure. If you are still unsure about using your credit card over the internet, most sites offer the use of payment over Paypal or Western Union. Another alternative is to purchase a prepaid credit card available from most financial institutions and Australia Post outlets.
4. Be wary of social networking sites
There are many social networking sites on the internet, with the two largest being Myspace and Facebook. In recent times, such social networking sites have been used to access information and data needed to hack into visitor’s email addresses and financial accounts of unsuspecting victims who offered data such as answers to person questions, not realizing this could be used against them. Make sure that you never list any information that may relate to a secret question on any accounts you may have on the internet.
Security of online transactions is a concern for all so AboutSeniors has a handy, downloadable PDF, Staying secure online, which will help you bank, shop and play safely.
Who gets your super payout when you die is not always cut and dried. About Seniors subscriber, Judy, would like to make sure her super goes to whom she nominates.
Q. Judy
I have no dependents and want to leave my super to a long term female friend (not partner) whom I have shared my house with for nearly 40 years. We are not registered as an interdependent couple.
I believe super is not actually dealt with through my estate but the superannuation administrator decides to whom my residual super goes.
Should I consider withdrawing from super at some stage and investing elsewhere?
I am currently aged 67 and in good health.
A.
Judy, you should complete a binding nomination, which will ensure that the trustee of your super fund must pay your residual super to your nominated recipient. Such nominations must be updated every three years to ensure your wishes are kept.
If your super fund does not allow you to stipulate a binding nomination, then you should contact the National Information Centre on Retirement Investments (NICRI).
As your beneficiary is not a dependant, you may wish to consider the tax liability for your friend and consult a tax advisor about how best to minimise such a liability.
Many Australians are having to make do with a reduced retirement income and may need to make their dollars last longer.
The Australian Securities & Investment Commission (ASIC) has addressed the financial turning points of 2010, one of which reduced retirement income.
For more information on reducing retirement income and other financial turning points in 2010, visit ASIC.
Sometimes it’s the simplest acts that can save the most money – take care of the cents and the dollars will look after themselves!
Whether you’re financially savvy or a disaster when it comes to money, the following tips may help boost your coffers.
1. Understand your super – don’t just expect someone else to make sure it’s accumulating. Ask your fund for a report and a full breakdown of all fees.
2. Set financial goals and structure your budget – talking about saving money won’t help you reach your target. The sooner you take action, the sooner you’ll reach your goals.
3. When considering retirement income streams, do your homework – you can never have enough information when dealing with your own money and the more you read, the more you’ll understand.
4. Find an independent financial planner – there is a reason good planners make so much money – just make sure they are also making it for you.
5. Financial advice doesn’t have to cost – consider contacting Centrelink Financial Information Service – you don’t have to be receiving benefits to consult them. Call 13 23 00.
6. Check you’re getting the best deal – whether it’s home, car or health insurance, shop around.
7. If it sounds to good to be true, it is worth checking – keep abreast of what’s happening in the world of finance, the latest scams that are circulating and never give your bank or credit card details to anyone without checking them out first.
8. Before you buy something, ask yourself if you really need it – many people are guilty of impulse buying and have a garage full of junk to prove it. Let a few days pass before you make the purchase, you may find out you don’t need it at all.
9. Check your bank and credit card fees – you may be paying over the odds and losing hundred of dollars each year on unnecessary fees just because it’s easier to stick with what you have.
10. Consider any financial investment carefully – although you may get a much needed instant cash boost, it could cost you dearly in the long run.
For more money advice, visit understandingmoney.gov.au.
During June 2009 a series of seminars jointly hosted by the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) and Centrelink shared insights into the financial process and how people might manage money in difficult periods. More are planned for this year.
If you have felt that your financial situation is completely hopeless, you are clearly not alone. In 2009 the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) and Centrelink jointly hosted a pilot series of seminars assisting people on managing money through difficult periods as well as those who simply don’t know how to get started! The seminars, titled Managing your money in difficult times, will be held again in 2010 – keep your eye on About Seniors enewsletters to find our when and where.
The need for financial advice is underestimated by many Australians who often believe that the less money they have, the less advice they need. Finding a good, independent financial advisor is just as important as finding a doctor you trust, but where do you start?
It is important to understand that a financial advisor is not there to provide all the answers to your financial future. Instead, a good planner should give you the information you need to understand which financial products will suit you best. Sounds simple enough but, sadly, this is seldom the case with many advisors linked to one company and providing information only on that company’s products.
But going into denial is not the answer – here are some simple tips to help you find a planner who will work for you:
1. Have a clear idea of what you want – work out where you would like to be financially in five, ten, twenty, years time.
2. Be wary of recommendations – while an investment profile may have worked for some, it may not be right for you.
3. Read as much as you can about financial products – many product disclosure statements can be downloaded from company websites or sent to you by mail. Get a feel for the products that are out there.
4. Remember it’s your money – don’t hand over total control to someone who tells you they know better.
5. Shop around – don’t settle for the first planner you meet with. Planners will give you the first appointment free so make it work for you.
6. Ask questions – no matter how silly you think they are or how long it takes, question everything and, if you’re still unsure, ask again.
7. Don’t be fooled by swish offices – someone has to pay for them. Often small, hardworking planners will work better for you than one who has many clients.
8. Make sure you know exactly what you are paying for – get a detailed breakdown of the fees the planner is charging and make sure they disclose any commissions they receive.
9. Check that they are properly licensed – any person giving financial advice should hold a valid license and the correct qualifications
10. Ask if this is the right planner for you – some planners specialise in different areas of planning so make sure you get one who deals with your specific needs.
Choosing a financial planner is not an easy task but the Financial Planning Association (FPA) can give you advice and details of planners who operate in your area, under their guidelines. For more information, visit the Financial Planning Association of Australia.
If you can’t afford to pay a financial advisor, it doesn’t mean you should just forget about getting advice. Through Centrelink, you can gain access to Financial Information Services free of charge and regular seminars on different areas of investing take place across the country. For details, contact Centrelink.
November last year saw the long-awaited delivery of the Ripoll Review – the review of the practices and legislation covering financial advisors. But will any of the recommendations help those Australians who need it most?
The collapse of financial product companies such as Storm Financial and Opes Prime robbed many hard working Australians of their retirement funds. The financial services industry can be regarded as a black art, with even those involved in it apparently struggling to understand all of its facets. The recommendations from the Ripoll report are aimed at making the industry more transparent for consumers but it may be a long time before financial advisors are truly trusted.
And what the Review did not recommend? The end to commissions taken by planners. Whilst many financial services groups are moving toward a fee for service business model it is still entirely legal for planners to recommend their own company’s products – and take a commission if they make a sale. Unsurprisingly the majority of products sold tend to be those from the planner’s own company…..
The recommendations of the Ripoll review are:
Recommendation 1
The committee recommends that the Corporations Act be amended to explicitly include a fiduciary duty for financial advisers operating under an Australian Financial Services License (AFSL), requiring them to place their clients’ interests ahead of their own.
Recommendation 2
The committee recommends that the government ensure the Australian Securities and Investments Commission (ASIC) is appropriately resourced to perform effective risk-based surveillance of the advice provided by licensees and their authorised representatives. ASIC should also conduct financial advice shadow shopping exercises annually.
Recommendation 3
The committee recommends that the Corporations Act be amended to require advisers to disclose more prominently in marketing material restrictions on the advice they are able to provide consumers and any potential conflicts of interest.
Recommendation 4
The committee recommends that the government consult with and support industry in developing the most appropriate mechanism by which to cease payments from product manufacturers to financial advisers.
Recommendation 5
The committee recommends that the government consider the implications of making the cost of financial advice tax deductible for consumers as part of its response to the Treasury review into the tax system.
Recommendation 6
The committee recommends that section 920A of the Corporations Act be amended to provide extended powers for ASIC to ban individuals from the financial services industry.
Recommendation 7
The committee recommends that, as part of their license conditions, ASIC require agribusiness MIS licensees to demonstrate they have sufficient working capital to meet current obligations.
Recommendation 8
The committee recommends that sections 913B and 915C of the Corporations Act be amended to allow ASIC to deny an application, or suspend or cancel a license, where there is a reasonable belief that the licensee ‘may not comply’ with their obligations under the license.
Recommendation 9
The committee recommends that ASIC immediately begin consultation with the financial services industry on the establishment of an independent, industry-based professional standards board to oversee nomenclature, and competency and conduct standards for financial advisers.
Recommendation 10
The committee recommends that the government investigate the costs and benefits of different models of a statutory last resort compensation fund for investors.
Recommendation 11
The committee recommends that ASIC develop and deliver more effective education activities targeted to groups in the community who are likely to be seeking financial advice for the first time.
At this point, these are only recommendations and how and when the Government implements them has yet to be disclosed. Read the full report.
Knowing how far your travel money will get you is simpler than you think with online money conversions at the click of a button.
XE is used around the About Seniors office quite a bit and is definitely our choice of currency conversion websites. XE is free to use for currency conversion and gives you live market exchange rates between all the major currencies in the world.
Visit XE to see how the Aussie dollar is faring!
With a firm grip on her travel budget, Melanie Ball explores Australia for dollar-friendly holiday options.
A change is as good as a holiday, proverbial wisdom tells us – in one of those sayings that is as inaccurate as it is irritating. But escaping the everyday usually costs money, alas, and the global economic crisis is eating into that. So how lucky are we to live in a country flush with inexpensive holiday options.
Although petrol costing under a dollar a litre has almost certainly joined the ranks of the extinct, the great road trip, or at least a shortened version, lives on with campervan relocations. Rental companies frequently need vehicles moved between major cities, and a relocation deal from Alice Springs to Darwin might allow a week for the trip at a charge to you of just $5 a day.
These trips generally involve you paying for the petrol en route, but you’ll often receive a refund up to an agreed amount when you deliver the vehicle to its destination. Further, the time and kilometres allowed you to complete the journey generally include a provision for side trips. The Alice to Darwin relocation I investigated allowed for 150 km more than the direct road route, ample for sizing up the Devils Marbles, downing a beer at Daly Waters pub and paddling Katherine Gorge on your way north.
Hefty excess kilometre charges aside, campervan relocation is cheaper than every form of outback transport except camels!
Prefer salty air and seaspray? Savour them on South Australia’s Eyre Peninsula, a patchwork of farms, parks and towns bounded by the Great Australian Bight, Spencer Gulf and vast salt lakes.
A west coast drive takes you from Ceduna, and the Nullarbor Plain, to Point Labatt to see (take binoculars) and smell (no additional equipment necessary) Australia’s largest breeding sea-lion colony. Dolphins surf the waves that roll through Venus Bay’s narrow entrance, and closer wildlife encounters await in Baird Bay, where snorkellers go mask-to-whiskered-nose with playful juvenile sea-lions.
And then there are King George whiting to catch, Coffin Bay oysters to shuck, and bluefin tuna to hand feed.
For a complete break from driving, train from Sydney to the Blue Mountains and explore beyond the Three Sisters. Step off the often crowded sandstone escarpment onto some of Australia’s best walks. Follow in coal and shale miners’ footsteps to Ruined Castle for breath-taking views of Kings Tableland. Wander through the Valley of the Waters, where cascades tumble from mossy ledges on which fairies must surely dance in private.
Accommodation (all budgets) is often just a stroll from trail heads – as are art galleries, gift shops and boutiques, in case your passion for exercise wanes. Don’t miss the Norman Lindsay Gallery in Faulconbridge (free for National Trust members) and afternoon tea in Katoomba’s Art Deco Paragon Café (and chocolatier).
Chocolate makers call Tasmania home, too, but there are other reasons to cross Bass Strait and check into Hobart. Ludicrously cheap flights from Melbourne leave cash in hand for enjoying the island state’s oysters, Atlantic salmon and ales.
With its spectacular harbour and 1270 m scenic lookout (Mount Wellington), Hobart is an ideal base for day trips to Port Arthur and Bruny Island, the city’s adventure playground. Try to stretch your budget to a flight over the jagged Arthur Range and into the Tasmanian Wilderness World Heritage Area, otherwise accessible only on foot. You’ll land at Melaleuca, where a hide allows you to spy on endangered orange-bellied parrots before you head to the local jetty to cruise beautiful Bathurst Harbour.
Back in Hobart, the ghosts of convict ships crowd Constitution Dock (free).
Convicts built the intimidating limestone prison overlooking Fremantle, Western Australia, and penal history flavours a holiday in this famous port town. So, too, do great maritime characters and stories, such as the Batavia. Wrecked off Western Australia in 1629, she is showcased in the excellent Maritime Museum along with exhibits ranging from other early wrecks to America’s Cup-winning Australia II and the Ovens, a retired Oberon Class submarine.
It is a short train ride from Fremantle’s café precinct and marina to Perth. There is a bike route up the Swan River, as well, and river cruises to the city. Catching a ferry in the opposite direction puts you among Sandgropers revelling in Rottnest Island’s pristine beaches and turquoise waters – and fighting greedy seagulls for chips!
Pelicans are more frequent visitors to the Murray, and this once mighty river is still a route to a great Victorian escape, despite ongoing water problems.
Visit historic river towns, stopping to chat with a winemaker, publican, motel owner or farmer. Stand under waterfalls in an Upper Murray national park. Relive the steam era in Echuca or watch hot air balloons rise over a houseboat in Mildura. Or simply pitch a tent among riverside gums and spend a week reading or fishing or just kicking back in the company of rowdy corellas.
Another fabulous destination for kicking back is the Sunshine State, and relaxing doesn’t come easier than on Fraser Island.
The world’s largest sand island is the place to dip your toes in tea-coloured lakes and teeter on sandblows fringing deeper water; to look up at towering trees in shadow-filled forests and walk kilometres of ribbon-like beach; to watch brahminy kites wheel on wings of burnished copper. With vehicular ferry passage from $80, resorts, cabins, private camp grounds and kilometres of beach camping (beware march flies in summer), Fraser is a treasure chest brimming with treats that cost next to nothing!
Money-saving tips
Be flexible about when and where. Destinations are cheaper and less crowded outside holiday seasons – and off-peak weather is rarely as bad as you fear!
Midweek flights generally cost less than weekend departures.
Compare the cost of petrol and time at the wheel with flying and hiring a car.
When buying airline tickets, look out for sales and promotions, such as Virgin Blue’s Happy Hour and Jetstar’s Friday Fare Frenzy. Compare domestic flights across airlines (except Tiger) at www.webjet.com.au. I recently booked Melbourne-Darwin tickets on Jetstar for the Monopoly-money price of $224 return!
Choose budget accommodation for most of your holiday and splurge on the final nights. You will remember the adventure of the former and the comfort of the latter.
Last-minute accommodation sites (e.g. www.wotif.com) offer great deals, but also check individual properties. Discounts for multi-night bookings are common.
Cook as many meals yourself as you can; make dining out a treat.
Contrast guided tours with do-it-yourself; the latter often give more freedom, the former can be better value and less hassle.
National Trust membership can soon pay for itself if you visit a few properties.
MORE
Many vehicle rental companies offer relocation deals and you can compare campervan relocation availability, costs, rental conditions (reduced insurance coverage, etc.) and book vehicles at one site.
Ph 1300 789 059 (toll free)
Web www.standbyrelocs.com
Email
Tourism Eyre Peninsula has all the information you need for a great South Australian holiday, including what to do and where to stay.
Ph 1800 067 739
Web http://www.southaustralia.com/TourismEyrePeninsula.aspx
Email
The Seafood & Aquaculture Trail showcases Eyre Peninsula’s delicious offerings through tastings, visits to factories and tours.
Ph 1800 067 739 (Tourism Eyre Peninsula)
Web www.seafoodtrail.com
Email
The National Trust manages historic properties around Australia. Membership entitles you to free entry and you can join online.
Ph (02) 6247 6766
Web www.nationaltrust.org.au
Email
Trawl the Visiting the Blue Mountains website for comprehensive information on accommodation, adventure and attractions, dining and events. Click on ‘Bushwalks’ in the ‘Things to See and Do’ box for descriptions and grades of walks.
Ph
1300 653408 (Blue Mountains Tourism)
(02) 4787 8877 (National Parks and Wildlife Service)
Web http://www.bluemts.com.au/tourist/default.asp
Discover what to do and where to stay in and around Hobart via Tourism Tasmania’s website and the Hobart eguide.
Ph 1300 827 743
Web
www.discovertasmania.com
www.hobarteguide.com
For everything you need to know to visit Fraser Island, including the cost of vehicle permits (private vehicles), camping and barge times, log on to the Visit Fraser Coast and See Fraser Island websites.
Ph (07) 3512 8100
Web
www.seefraserisland.com
Go to the Fremantle Visitor Centre website for information about things to do and see in the Port City.
Ph (08) 9431 7878
Web www.fremantlewa.com.aua>
Email
The Western Australian Maritime Museum website provides further information on the Museum’s three main sites plus details of entry fees and opening hours.
Ph
(08) 9431 8444 (Shipwrecks Galleries)
(08) 9431 8334 (Maritime Museum and submarine Ovens)
Web www.museum.wa.gov.au/maritime/maritime.asp
Email
Get into the flow of Murray River travel – including by houseboat – through the Discover Murray website.
Ph (08) 8363 6244
Web www.murrayriver.com.au
As previously published in YOURLifeChoices magazine
Australia’s millionaires have taken a financial bashing in the last year, with the number of high net worth individuals falling by 23%. Your bank account may not be that of a millionaire’s but that doesn’t mean you can’t manage it like one.
Internet banking can save you money every month on fees and the convenience of being able to access your finances online, means greater control over where your money goes.
1. Consider online savings accounts
Online savings accounts often offer higher interest rates than traditional branch based accounts and lower fees. The return on such accounts often match or even better fixed interest investments such as term deposits and debentures.
2. Cheaper transactions online
With more companies charging a fee to pay bills at outlets or when using a credit card, paying bills online is a cheaper and more convenient option.
3. Convenience
Having access to your account 24/7 means you can do your banking at a time that suits you and there are no queues! Also, being able to monitor what goes in and out on a daily basis can help you highlight areas where you’re spending more than you should.
4. Stay secure
Of course, some people are still wary of banking online, and with the horror stories that continually appear in the media, with good reason. By taking simple steps you can protect your online activity for the “prying eyes” of those out to defraud you of you hard earned money.
Find out more about Staying Secure Online
If you’re lucky enough to not be relying on your tax refund to pay an unexpected bill, there are some clever ways to make the most of your rebate.
It’s always nice to get money back from the ATO but use it wisely and it could go further than you think.
1. Pay a lump sum off your credit card
If you’re one of the growing number of Australians who don’t clear their credit card balance each month, paying just the minimum could take up to 11 years to pay off a balance of $10,000. How much you owe and how long it will take to pay can be confronting but simple measures such as paying a lump sum or a small additional amount each month can help tame your debt.
Check out how a lump sum payment can accelerate paying off your credit card balance.
2. Add to your super
The cost of living is rising but investments are falling and according to The Association of Australian Super Funds (ASFA), it now costs around $38,000 a year for a single to enjoy a comfortable retirement. The most cost effective way of adding to your super is to take advantage of the Government’s co-contribution.
If you have an income of less than $30,342, the government will match each dollar contributed after tax, up to a maximum of $1,000. As your income increases, the amount the government contributes decreases, phasing out completely when your income reaches $60,342.
Find out how additional contributions can boost your super fund
3. Saving for a rainy day
One of the worst things you can do with a lump sum rebate is put it in your everyday bank account and watch it fritter away. While it’s understandable that many Australians may be counting on a tax rebate to fund day-to-day living, it can be out to better use in a high interest account. Leaving your money in a savings account even for a few months can have financial benefits and may take you closer to your dream of a holiday or new car.
Find out how a high interest savings account can boost your coffers
4. Reduce your mortgage
The days of living mortgage free are almost a thing of the past, with the cost of buying our own home on the increase. A home loan is probably the biggest financial burden held by a household and reducing the amount owed can take years of the duration of the loan. If your loan will allow you to make extra payments without fees for doing so, then you should consider a lump sum payment when you have the money sitting in the bank.
Consider if reducing your mortgage is the best course of action for your finances.
5. Debt free Christmas
Apologies for being the bearer of bad news but Christmas is just around the corner, 85 days away to be exact. By taking advantage of the off-season offers and layby facilities, you could be prepared for Christmas without the last minute rush. And save yourself a credit card hangover in January!
Installing a NUE Energy Solar System could not only save you money, it could even make you a few dollars.
Brand NUE Solar PV Savings
A NUE offer that saves you money
1kW solar system fully installed from $3,399*
1.52kW solar system fully installed from $3,899*
Save money and save energy. When it comes to saving money and saving the environment, solar energy is generations ahead. Not only will your NUE Energy solar system generate electricity for your home, you could also be paid for additional electricity you send back to the grid, potentially saving hundreds of dollars on your electricity bill.
Quality and experience. NUE Energy has been installing residential solar PV and solar hot water systems since 1985. An Australian solar company, NUE Energy only uses quality products with full manufacturers’ warranties.
Hurry. The environment can’t wait and neither should you.
Call 1300 768 225 or visit nuenergy.com.au.
*Terms & conditions apply. See website for full details.
When moving to a smaller home or a different area, stamp duty can be a costly barrier. About Seniors subscriber, Kathleen, is keen to know of any concessions for those on DSP.
Q. Kathleen
I am on the DSP and we are selling our home and moving closer to family for health reasons. We will be buying an older home and won’t have a mortgage. Are there any concessions on stamp duty for us?
A.
Customers who are receiving Disability Support Pension (DSP) automatically receive a Pensioner Concession Card and they may also be entitled to various concessions from state and territory governments and local councils.
Although Centrelink issues the concession cards, additional concessions are actually offered by individual state and local government authorities. Pensioner Concession Card concessions are different in each state and territory and vary between local councils. Stamp Duty legislation also differs depending on which state/territory you live in.
You will need to contact your state or territory government who will be able to advise whether there are any concessions available to you. You can find contact details by visiting Australia.gov.au.
Find out more information on the Disability Support Pension
Completing a tax return is up there with having your teeth pulled, painful and can be expensive! Do you really need to complete a return each year? About Seniors subscriber, Oscar, is looking for a simple indication of whether he needs to lodge a return.
Q. Oscar
I hope you can help me. The ATO sent us a letter trying to explain whether you need to lodge a tax return but it is so confusing that I still cannot understand. Why do they not say, “If you are a pensioner and you live with your spouse for a full year, you cannot earn more than $XXX including any other income, such as bank interest, shares, etc”. I think that a lot of pensioners or seniors will be happy to read your answer.
A. Oscar, if only it was that simple. The ATO advises that you must lodge a tax return if you have an income of:
· $28,867 if you were single, widowed or separated at any time during the year
· $27,600 if you had a spouse but one of you lived in a nursing home or you had to live apart due to illness
· $24,680 if you lived with your spouse for the full year
However, there are other different factors that influence whether or not you need to complete a tax return. The simplest way to find out if you need to complete a return is to use the online calculator provided by the ATO.
It is also worth noting that the Tax Commissioner can request an Australian to lodge a tax return. If you are requested to do so, you must regardless of any prior information given or the result you get from using the online calculator.
For more information on lodging a tax return, visit the ATO website.
Quite often, women are happy to leave the financial dealings of a household to their spouse or partner but it is important for all individuals to empower themselves financially.
The Financial Literacy Foundation has launched a series of Women understanding money information sheets that discuss issues and offer hints, jargon busters and anecdotes about financial issues affecting women at various life stages.
This free initiative is part of the Foundation’s overall Understanding money initiative. For more information, visit Understanding money.
Making the most of your retirement fund can be as simple as ensuring you’re savings are achieving the best interest rates around.
Online financial services company, Artog, has launched a tool that lets you find the highest interest rate for your savings among most of the major financial institutions in Australia. Simply enter the amount to be saved, then Artog will list the accounts available, their interest rates, if there’s a minimum account balance requirement and how often interest is paid.
Find out how much your savings could be making you in interest.
Its official, Australia has avoided recession… just! Actual economic recovery may be some time off, with other western countries battling with their own financial problems. If we listen to the experts, now may be the best time to invest in the share market but who has the courage to do so? Understanding your options may help take some of the fear out of investing. About Seniors downloadable PDF, Asset classes explained, will help you to understand how to spread your risk and reap the benefits.
Voluntary redundancy or early retirement may seem like an attractive option. Tax-free limits may apply to your payment but there are conditions that must be met.
Firstly, to qualify for any tax concessions, your redundancy must be bona fide and meet the criteria set out by the ATO. If it does not meet the criteria, then you can say goodbye to any tax benefits.
Before a payment is tax free up to the limit, your employer (Early Termination Payment) ETP needs to meet all of these conditions:
· the payment is more than the amount the employer would have paid to the employee, if the employee voluntarily resigned or retired in other circumstances
· the termination of employment is before the employee turns 65 and earlier than the date the employee would have left their employment anyway
· the employer does not have any agreement with another person to re-employ the employee
· if the employer is related to the employee in some way, the payment is not more than it would have been if the employer and the employee were not related (known in tax law as dealing with each other at ‘arm’s length’)
· if the payment is an early retirement scheme payment, the Commissioner of Taxation has approved the early retirement scheme, and
· if the payment is a redundancy payment, the redundancy is genuine.
For more information on ETPs and how they may benefit you, visit the ATO.
Going green with your energy doesn’t need to cost the earth you’re trying to save.
If you’re lucky enough to live in Victoria, Queensland or South Australia then your energy market has been deregularised, meaning there are savings to be had on your fuel bills. Simply have at hand your latest fuel bills and head to GoSwitch to see what you can save, or for some great fuel saving tips.
For those living elsewhere in Australia, it’s still worthwhile contacting your energy supplier and checking that you are on the best plan for the amount of power you use.
Getting ready for tax return time will help take some of the stress out of completing your tax return and will make sure you get any tax refund quicker!
The records you should have ready are:
· tax file number
· spouse’s tax file number
· spouse’s date of birth
· bank account details
· financial statements showing the total amount of interest earned
· share dividend remittance advices
· details of any assets you have sold during the financial year
· business income records
· income from rental property details
· foreign investment income details
· Centrelink payment summaries
· receipts for taxable deductions
· vehicle log book if using your vehicle for business purposes
· spouse’s taxable income
· previous year’s tax return
Once the tax year has ended at the 30 June, you should receive a group certificate from your employer and an end of year statement from your health fund. This will tell you if you need to claim the 30% rebate.
When you have collected all the information, you’re ready to submit your tax return. Why not try the ATO’s Personal Tax record keeper to get all your information in order?
Getting behind with your tax returns can be stressful, as About Seniors subscriber, John has discovered. Fear not, help may be available.
Q. John
I am on a disability pension and am desperately seeking help. I need to lodge multiple tax returns dating back to 2003. This has not only become very stressful for me, but could be financially difficult due to not only the cost of a consultant’s fees, but also possible fines from the Taxation Department. I am desperate to finalise this matter. Are you able to advise of anyone who could help me with these tax returns?
A. The first thing to do is not panic. If you are willing to work through your tax returns, there are people who can help.
The Australian Tax Office (ATO) has a program called Tax Help. Through a network of volunteers, who are not ATO staff but are trained and supported by the ATO, low income earners can get help filling in and lodging their tax returns. Tax Help is available in all cities and many country centres throughout Australia.
For more information, call the ATO on 13 28 61 or visit the ATO website.
What would you do with a share of $564 million? That’s how much is currently unclaimed by individuals and business from banks, insurance companies, deceased estates, etc and some of it could be yours.
The Australian Securities and Investment Commission (ASIC) is calling for people to claim money which may belong to them, with amounts ranging from $1.00 to $990,000. The largest amount claimed last financial year was more than $3.1 million – wouldn’t that be nice!
There is no cost involved in searching for your lost money, you just have to be able to prove that it’s yours. Simply visit ASIC’s free online database and type in your name.
Senior Rights Victoria (SRV) is a statewide legal service established to prevent elder abuse and safeguard the rights of seniors Victorians. Their upcoming sessions will advise you how to Safeguard your savings.
Designed for Law Week 2009, SRV are running a series of session throughout Victoria that will present ways to protect your savings, assets and property and prevent difficulties from arising in the future.
Open to all seniors Victorians, their family members and friends, the sessions will be held:
Monday 11 May 10.30am – 12pm, West Geelong Town Hall
Tuesday 12 May 10.30am – 12pm, Boyland Room, Box Hill Town Hill
Wednesday 13 May 1.30pm – 3.00pm, Campbell Theatrette, Bendigo Library
Thursday 14 May 10.30am – 12pm, Council on the Ageing, Block Arcade
For further information or to book your place contact SRV on 1300 368 821
With long-term investments taking a dive, more Australians are turning to term deposits to grow their wealth
The opening of term deposits grew by 39% from June 2007 to September 2008 and the total value of term deposits s now estimated at over $500 billion. But how many people actually understand what a term deposit is and how to get the best from your invested money.
Prompted by the growth of this type of investment, the Australian Securities and Investment Commision (ASIC) have prepared a guide to alert investors to issues of which they should be aware. This is also being accompanied by a program of health checks on funds to ensure marketing and disclosure on term deposits is proper and fair.
If you are considering a term deposit, or are uncertain of the suitability of your current fund, you can download the ASIC guide, Getting the most out of term deposits, by visiting Fido.gov.au or calling the ASIC Infoline on 1300 300 630.
While some things are best done on the spur of the moment, planning for your wishes in later years should be done while you’re still able to convey your wishes.
Q. Helen
Would you please give me information about the advanced health directive and retirement accommodation?
A.
Many thanks for your email and interest in About Seniors.
We are unsure exactly what you wish to know and would welcome some clarification so we can correctly answer your question. Would you like to know how an advance health directive is enforced for someone living in retirement accommodation?
You can find out more information about Advance Health Directive by visiting the Department of Justice and Attorney General for Queensland by clicking here.
Understanding your spending patterns is vital to making the most of your money and the tools are out there to make it simple.
Create your own home budget using this handy About Seniors budget planner, complete with a sample budget form and a budget worksheet!
Tracking your monthly spending habits and accounting for every dollar spent is an important part of this process. For the next month or two, think closely about how you spend your money and record it. If you can, at the end of each day write down exactly what you bought, paid for and if it was essential or non-essential.
You can start now by estimating your current budget. Download our excel spreadsheet and fill in all the yellow areas, and the spreadsheet should automatically calculate the rest of the information for you! Make sure you account for EVERYTHING you spend, even if you don’t see a specific category on the budget template, add those expenses to “other” or create a new category that fits your needs.
Now that you know what you spend, identify where you spend most of your money on non-essential items and try and cut down on this area if you are spending more than you can afford.
The most important step in financial planning is to be realistic and stick to a budget. If your goal is to save $50 in the first month, but you don’t achieve it, don’t just give up, repeat the budget spreadsheet above and find out why you weren’t able to meet your goal, and set a new, realistic goal, even if its only $25!
Find our more information on managing your money.
Skimming of bank details has been very much in the news recently, with several arrests being made. But if you’re a victim of skimming, do you just grin and bear it?
Following the recent spate of skimming incidents, the Australian Bankers Association (ABA) has assured bank customers that they will not be liable for any losses from their accounts. This is indeed good news but how do criminals get your bank details?
The most common way is by attaching a device to an ATM which skims the detail from the magnetic strip on the back of a credit or debit card. Another way is by attaching a device with a hidden camera to ATMs, this captures details from your card and records your PIN.
Banks are aware of the devices being used on their ATM machines and machines are regularly checked. If you suspect any fraudulent use of your card, you should contact your financial institution immediately. In addition, the following steps will make it more difficult for criminals to obtain your details:
· shield the key pad with your free hand when keying your PIN at an ATM or EFTPOS machine.
· treat your card like cash and never let it out of your sight, this means not letting a shop assistant or waiter walk away with your card
· check your statements carefully and report any suspicions transactions
· make sure you get you card back as soon as your transaction is complete
· lower the limit or your card to minimise any loses would your card be skimmed
For more information on skimming incidents and what you can do to minimise the risk, visit the ABA.
Assuming your credit history is in order can be a costly mistake. Details of your credit transactions are taken into consideration by lenders before they will approve your credit application and if there is a discrepancy, you could end up paying a higher rate of interest or being refused altogether.
Getting a copy of your credit report is free, simply contact a credit reporting agency in writing, giving them your relevant details and in about ten days time, you should receive a copy of your history. Never respond to an email or click through on a website offering you a copy of history, they may make a charge, or worse, be a scam. Any agency offering a free credit report will not need your credit cards details so don’t give them unless you are sure they are offering a legitimate service and understand exactly why they need them. There are three reputable agencies that are recommended by the Australian Securities and Investments Commission (ASIC):
Veda Agency
Dunn and Bradstreet
Tasmanian Collection Service
Once you receive your report, make sure all your details are correct; a simple spelling mistake in your name or address can cause all kinds of problems, such as mistaken identity. If there appears to be an application for credit that doesn’t look familiar, it may indicate that your identity has been stolen, you should contact the police immediately.
If you do have legitimate defaults, check their accuracy. Defaults must be at least 60 days old when listed and you must have received a letter advising of the default before it was listed. Defaults can only be listed for five years before they must be removed.
Any inaccuracies should be taken up with the credit provider and if you are unable to resolve the problem, there are independent bodies that can help, such as the Office of the Federal Policy Commission, which deals with all credit reporting complaints.
For more information on your credit report, visit ASIC.
Remember that any work undertaken while on the road may have implications for Centrelink benefits you receive and your general tax situation.
Any change of income must be reported to Centrelink as it may affect entitlements. To discuss your circumstances, make an appointment with a Centrelink Financial Information Service Officer. These officers maybe able to work out approximately what your payments will be, but do not have the authority to make decisions about your payments. Visit Centrelink’s website for numerous online services, forms and information.
All income must be reported to the Australian Tax Office (ATO). However, many expenses such as materials, uniforms, mileage and even accommodation can be tax deductible. Keep relevant receipts and a vehicle log book to accompany your tax return. Visit the ATO’s website for comprehensive information.
Every silver lining has a cloud with scammers targetting those due to receive payments in the Government’s recent stimulus package, the very people who can least afford it.
The Australian Competition and Consumer Commission (ACCC) is warning of an email scam, requesting personal details which can be used to intercept cash payments being made in March and April. The emails are disguised as official communications from the ATO or Centrelink, asking people to submit an application to receive payments. Both the ATO and Centrelink have details of those entitled to payments and will not request additional information by email.
Never give any personal information out by email, any organisation requiring your information will undertake security checks before requesting such information. If you have responded to such a request, don’t be embarrassed, these scams are often professionally mastered and can fool anyone. You should contact the ACCC immediately if you receive anything you consider suspect.
Find out more about identity theft and what you can do to prevent it. Link to your tech piece.
Trusting financial advisors is difficult to do as recent court cases have shown.
FIDO, the website of the Australian Securities & Investment Commission (ASIC) is the first place to visit if you’re thinking of making any significant financial decisions. As always, AboutSeniors recommends seeking the advice of an independent financial advisor before committing any money but doing some research of your own can only help.
There’s a lot to consider when planning your retirement, will you have enough money, when can you afford to retire, will you be able to spot a dangerous investment, the list goes on and on. FIDO offers you the tools to get a clear picture of what your super find currently offers, choosing a retirement income product, facts and figures on reverse mortgages and warnings of what to be aware.
For more information on retirement planning and income, visit FIDO.
With interest rates coming down, you may be considering changing your mortgage provider. Your mortgage is one of the biggest financial commitments you will ever make and many of us tend to stick with what we have. New products come on to the market continually and with the fluctuation in interest rates, you could save thousands of dollars, and have a more suitable product by shopping around. FIDO has four handy steps to switching home loans.
Whether events of the last few weeks have shown us that you never know what’s around the corner. Making sure you have proper insurance, without paying more than you need is easier said than done. FIDO has tips for getting the right insurance cover and how to make claims for flood and storm damage.
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One of the reasons why you may have chosen your bank is because they offered you the ability to use any ATM, at no cost. This changed on 3 March, 2009 so now a withdrawal of your money from another bank’s ATM may be a costly exercise.
From now onwards when you use an ATM which is not operated by your own bank or in a network arrangement, you will be advised of the amount charged to use that particular ATM (average fee is $2) before proceeding with the transaction. You may also be charged a disloyalty fee by your own financial institution, somewhere in the region of 25-50 cents. This can all add up to a hefty sum and thinking ahead will help you avoid these high charges:
· Always uses your own bank’s ATM or find out which ATMs are part of a network arrangement with your bank
· Find out where your nearest bank ATMs are by calling into the branch for a list, or calling their customer service line or visiting their website
· Walk a little bit further down the street to see if there is an ATM belonging to your bank, rather than using the first one you see
· Take advantage of cash out when using EFTPOS in places such as supermarkets and petrol stations.
· If you need to frequently use an ATM that does not belong to your bank, think about making larger withdrawals if you can afford it. You’ll only be charged one fee, regardless of how much you withdraw
· If there are a limited number of ATMs belonging to your bank in your area, call the bank to discuss the cheapest way to access your money.
Further information on these industry-wide changes can be viewed at Australian Payments Clearing Association or the Reserve Bank of Australia.
You may consider yourself to be financially savvy, not one to be caught out in financial matters but how much do you really know?
FIDO is the website of the Australian Securities & Investment Commission (ASIC) and offers handy financial tips and safety checks to make sure your money is safe. They also have useful, easy-to-complete, online quizzes covering basic money matters, women money matters, dangerous investments and superannuation. Taking only a few minutes to complete, you not only get the correct answers but links to useful tips covering the question topics.
Test your financial knowledge, visit FIDO.
Shopping around can save you money on credit cards, mortgages, personal loans and savings accounts. Doing your research online is quick, easy and can help you find the best deal.
You’ve worked hard to earn your money and its better in your pocket than the coffers of financial institutions. AboutSeniors always advises that you seek independent financial advice before making any money decisions but the four sites below are a good place to start finding out what’s available for those seeking a credit card, savings account, mortgage or personal loan.
Credit Cards - www.creditcard4u.com.au
Saving accounts – www.infochoice.com.au
Mortgages – www.yourmoney.com.au
Personal loans – www.canstar.com.au
It’s not often you get something for nothing but if you know what you want and are prepared to shop around, you need never pay another cent in bank charges.
Basic banking is just what the name suggests, an account which includes basic features functions such as the ability to deposit regular benefits or wages, make withdrawals or deposits, and access electronic payments networks. Most banks offer at least one basic bank account which has no account keeping fees and includes some fee-free transactions. These accounts are usually available to children, concession card holders and certain other adults who meet the criteria determined by the individual bank.
For more information on basic banking and which banks offer what, visit the Australian Bankers’ Association Inc.
Just like Jim, an AboutSeniors subscriber, many self-funded retirees want to know if they will get anything from the Government’s Tax Package.
Q. Jim
We are both retired. My wife has a Term Deposit earning approx $6000 a year in interest . I have an allocated pension (no tax payable) but have a few bank shares earning about $2,500 per annum
We both filed tax returns last year and were liable for tax on our income but with the rebates etc we did not have to actually pay any tax.
Will we qualify for the $950 payment?
Many thanks
Jim
A. From what you’ve told us, you should be eligible for the $900 (reduced from $950) from the Government’s most recent stimulus package. This will be paid by the Australian Tax Office (ATO). On their website they have useful instructions on how to read your tax notice for 2007-08, which will confirm your eligibility.
They also outline payment dates and advise you to make sure your details are up-to-date to ensure you get your payment quickly.
For more information on the Government’s Tax Package, visit the ATO.
For clarification on who is getting what, visit our Federal Government page.
For those facing escalating costs with no obvious solutions in sight, it might be useful to review the terms and conditions of the Pension Loans Scheme which allows those of pension age (or partners) to use real estate as collateral for a loan from Centrelink.
This scheme is a voluntary arrangement which allows for a loan for a prescribed or indefinite period. To be eligible you need to be of pension age (,males 65 or over, females depends upon date of birth), receive or be able to receive some level of pension under either the income or assets test and have assets which can be used to secure the loan. You can suggest an amount you would like to receive up to the amount of the current Age Pension. If your current pension entitlement is less than the full Age Pension, you may choose to top up to full amount of the Age Pension. The total amount you will receive will depend upon the value of your real estate used as security, the amount you wish to retain in this property and how old you are when the loan is approved.
To find out more you can visit the Centrelink website and download a PDF or telephone a Financial Information Service officer ( 13 23 00 ) who is authorised to discuss the terms and conditions and other information you may need to decide if such a loan is appropriate to your circumstances.
Can you believe that the average mortgage repayment on the Gold Coast accounts for 93% of a person’s income, making it the most unaffordable place to live in Australia.
Research undertaken by the Residential Developer’s Council used data on media house prices, income levels and mortgages to determine what percentage of income was used to service home loans. It is considered that paying above 30% of your income on a mortgage results in mortgage stress, making the findings of the research scary reading.
Following the Gold Coast as the least affordable place to live are Sydney with 82% and Sunshine Coast with 81% of income used to service mortgage repayments. And if you’re looking for somewhere more affordable to live, then why not try Latrobe Valley, where residents spend 29% of their income on their house repayment.
To view the top ten most and least affordable places to live, visit The Property Council.
With summer holidays just around the corner, many of us will be making use of our credit cards when travelling. But just how do we keep our hard earned money safe?
VISA have issued a guide to using your credit card when travelling overseas. Common sense should prevail but with the excitement of being in an exotic land, it’s easy to forget the basics
For money safe travelling, view VISA’s top tips or for more information on using VISA when travelling overseas, visit www.visa.com.au
Getting financially fit for summer may mean transferring your credit card balance to a card with a lower interest rate. But after the introductory period, you could find yourself worse off than before.
The Australian Securities and Investments Commission (ASIC) has issued some guidelines on what you should be asking card issuers before transferring your balance. You should find out what the standard interest rate is after the introductory period, and if the introductory rate includes all transfers and purchases.
Also, you should ask yourself if transferring your credit card balance will really benefit you and if you can find a cheaper way of borrowing money.
Finally, take your time and read through the fine print. As tedious as this may be, it could save you from any nasty surprises in the future.
For more details of what to look out for when thinking of transferring your credit card balance, visit FIDO.
Many Australians are facing the toughest Christmas financially for decades however, every cloud has a silver lining; with companies battling to get your business, there’s a deal to be done.
When money is tight, luxuries are the first to go and according to a survey carried out by ServiceSeeking, the $500-$1000 usually spent on Christmas by 41% of Australians, will be greatly reduced. But if you do have a little money to spend on home improvements, then you may be able to get a good deal via ServiceSeeking.
ServiceSeeking allows consumer to post a job they need doing and business will go head-to-head to bid on your work, allowing you to secure the best deal. It’s quick to register and the service is free to use, with business paying a small fee when they bid on your job.
For more information, visit ServiceSeeking.
One of the biggest money mistakes people can make is paying more interest on their credit and store cards than they need to. This is the most expensive way to borrow money and, if you must do it, do it wisely.
There may be a credit crunch on but that shouldn’t stop you shopping around for the best deal on your credit card. Remember, the less you have to pay in interest, the quicker you can reduce the balance. Take advantage of special interest free rates, and when that rate ends, look around for another.
CreditMart.com.au allows you to compare credit cards by the qualities you need most. Whether it’s an interest free period, continual low rate, interest free days, or free fuel offers, you may be able to find a card that suits your needs.
For more information, visit CreditMart.
Divorce usually means a change in financial circumstances, and very rarely is this for the better. So how do you keep your head and your home?
Separating from a partner is the start of an emotional rollercoaster and the very time you shouldn’t be making big financial decision, although you may be forced to do so. Look on your new start as something positive and don’t make the following costly money mistakes:
· Emotional spending – blowing your budget won’t heal the pain
· Financial surrender – anything for an easy life is not the way to secure your new life
· Revenge – pettiness with just end up costing you in the long run, both mentally and financially
· Choosing advisors – make sure you have a separate accountant as we as legal advice.
· Major change – it’s tempting to just leave the old behind and forge a new life but let the dust settle before making any major decisions.
For more details on divorce money matters, visit i-don’t
Do you have managed funds on which you are paying a trailing commission of more than $300 per year? Changing to the TrailCap™ program can result in a rebate on these fees – better in your pocket than an adviser’s?
TrailCap™ is a program offered by InvestSmart the online managed funds broker. As the fund manager, InvestSmart receives commissions for any managed funds purchased. Both entry fees and 50% of trailing commissions (above $300) are then rebated to the investor. For those investors paying thousands in trailing commissions, this is a simple way of minimizing costs on these investments, and offers a particularly useful tool/saving for those who are managing a DIY Super Fund. You can move your funds online (by downloading a broker nomination form) or ask for more detail and/or complete the transaction by telephone.
One of the best ways of simplifying your life is knowing where your money’s coming from and where it’s going to. With a robust budget, you can be a little more prepared for the unexpected.
You may have tried to budget in the past and failed, it is one of the hardest things to do, especially when you have a limited income. Setting a goal, no matter how small, will give you a focus and make sticking to your budget a little easier. Being honest with yourself about how much you spend on extras is also vital, and don’t kid yourself you can do without them, you’re sure to fail if there’s nothing to look forward to.
The Australian Government have a useful website with tips and tools for creating a successful budget. You can find out how to get started, how best to succeed and use the online budgeting tool to make managing your money simpler.
As well as having useful information online, you can download or order a copy of the handbook, Understanding Money. To get your budget started and be on your way to financial freedom, visit Understanding Money.
With a huge amount of credit card transactions occurring during the Christmas shopping period, it’s easier for fraudsters to slip through banking security nets. The Australian Bankers’ Association (ABA) has called for all card holders to be more vigilant.
Simple actions may protect you from becoming pray to criminals who make a very healthy living out of credit card fraud. Never reveal your PIN or password to anyone, banks will never ask for this information. This may seem self-explanatory but when an authoritive voice asks for personal details, it’s all too easy to be taken in and give them what they ask for.
Check your bank statements thoroughly as the quicker you advise your bank of any discrepancies, the quicker they can act and the more likely they are to catch the culprit. Don’t get caught up in the rush at Christmas, and no matter how busy the checkouts are, always make sure your card is returned by the cashier and placed safely in your purse or wallet.
For more details on how to protect yourself from credit and debit card fraud this Christmas, visit the Australian Bankers’ Association.
When looking after grandchildren, whether for a short or extended period of time, there’s a good chance you may incur some medical costs.
Medicare can help with claiming back these charges and it’s as simple as producing any receipts to your local Medicare office. Many doctors will bulk bill for children but if they do issue you with an account, Medicare will help you with the claim and although the child must be registered with Medicare, he or she does not need to be included on your card.
For more information on claiming medical benefits, visit Medicare.
With the Government about to pay out pre-Christmas bonuses to needy Australians, telemarketing companies have the phones at the ready to try and get you to part with your cash!
David McMahon, a leading voice messaging and marketing strategist has come up with five top tips to stop the telemarketers.
1. Buy and answering machine. Telemarketers want to talk to real people and are likely to hang up and move on to the next one.
2. Hang up. On most telephone exchanges, hanging up for 20 seconds will disconnect the call.
3. Never get angry with the telemarketing operator. They’re only doing their job, a firm but polite no thank you will suffice.
4. Register on the Do Not Call Register. This is free, simply visit www.DoNotCall.gov.au.
5. Pre-recorded message. If you receive a pre-recorded message, press 9. You should then receive a message saying your number has been removed.
For more information on David McMahon, visit www.mediasolutions.com.au
Frozen funds – the facts, some useful Q&A and some Centrelink Q&A…
Government guarantees bank accounts
(With thanks to centrelink, IFSA and ASIC)
On 12 October the Federal Government guaranteed 15 million deposit accounts, covering $800 billion, and fund raising facilities of $1.2 trillion used by financial institutions to finance small business investments and home loans.
The Federal Government has also stated:
The non-prudentially regulated investment sector typically includes mortgage trusts, non-listed property trusts and debentures. It provides investment capital to a range of projects (e.g. property development) and offers investment returns to retail investors. These vehicles are an important form of capital for the real economy.
The Government has requested ASIC provide urgent advice in relation to retail investor hardship cases where redemptions may have been frozen, including using its modification powers under the Corporations Act to provide additional flexibility to fund managers and trustees.
No guarantee for mortgage trusts
The Federal Government has not guaranteed mortgage trusts. Some funds have frozen these investments so investors cannot withdraw their capital, although nearly all appear to be still paying.
Useful Q&A
Q. What does it mean when companies such as AXA, Perpetual and Colonial First State “freeze” funds?
A. They have stopped withdrawal of lump sums but in most cases are paying out interest and dividends on funds invested. Trustees must make sure there are no winners and losers if there is a run on funds, this triggers a clause in legislation forcing trustees to act on behalf of all unit holders, making sure that the remaining unit holders adversely affected. Sometimes the freeze is just until the organisation can communicate all with all holders as well as allow advisers to get in touch with them. The mortgage trust industry has been around for more than 40 years and weathered times of low liquidity before.
Q. Are these companies legally entitled to freeze these funds?
A. Yes – in fact they have a fiduciary duty to do this as they have to act in best interests of all unit holders.
Q. What sort of people are likely to be affected?
A. The average age of an investor is late 60s
Q. How do I know if I am personally affected? (Who should I contact?)
A. In the first instance checks out the website of the company, then with your investment number in hand, email or telephone for further advice. If you invested using a financial adviser, contact this adviser in the first instance. Keep a record (written) of all correspondence.
Q. Are all the companies who have frozen funds still paying income from these funds or have some frozen both?
A. We believe this to be the case – but you will need to check with your investment house to confirm.
Q. What can I do if I need emergency relief?
A. Contact the trustees of your fund – there may be provision for special case release for genuine hardship. If you already qualify for a pension, you can contact Centrelink as well. If you feel you may now qualify for a pension because of reduced assets, also contact Centrelink.
Q. Where can I find out more about market volatility?
A. The IFSA website
And some Centrelink specific Q&A
The Government is closely monitoring the global financial crisis and its impact on pensioners and has asked Centrelink make a special one-off update of our system with the current value of any shares and managed investments that pensioners might hold. This will be done in the next few weeks to ensure pension payments are based on the most up-to-date asset values available.
Q. How often asset evaluations are carried out for full or part Age pensioners?
A. Generally, updates on shares and investments are only made twice a year in March and September, however people can ask for a revaluation of their personal financial situation at any time.
Q. Is this review a one off? Has it been brought forward? If so, when was it originally scheduled?
A. Centrelink will automatically reassess the share values it has on customer files and adjust people’s payment rates where necessary. If customers who have investments and who are on a part rate were expecting a change in their payment and this doesn’t happen after several few weeks, they should call Centrelink on 13 2300 to discuss the situation. If possible, people should have their investment certificates handy to help speed up the process.
Q. What of those NOT on an age pension who may now be eligible because of lower assets – how do these people go about applying?
A. If affected investors are not currently Centrelink customers then they can test their eligibility for a Centrelink payment or ask to talk to a Financial Information Service Officer by calling 13 2300. Claims for Age Pension can be lodged online at http://www.centrelink.gov.au, over the phone or at Centrelink offices.
Q. For those whose assets are NOT FROZEN but need money urgently, an Advance payment may be available – can you share a brief synopsis of what an advance payment is and when/how it needs to be paid back?
A. Advance payments are an advance on a person’s regular pension payment, up to $500. The advance always has to be paid back through a reduction in a person’s fortnightly pension. People can only get an Advance Payment if they are on certain Centrelink payments (including the Age Pension) and can only have one advance in a 12 month period. More information is on the Centrelink website here: Advance Payment
Centrelink also have a Hardship information factsheet.
Some of us may be unaware how much we’re charged for transactions on our bank account. Being fee savvy can save a substantial sum of money.
Many financial institutions have basic accounts available to concession card holders that charge low or nil account fees, or offer a monthly rebate to cover transaction fees. As these accounts offer little or no interest, they may not be suitable for a savings account, but not having to pay individual fees every time you use an ATM or make a branch withdrawal, can save you a fortune.
Your financial institution will be able to provide a breakdown of transaction charges that apply to your account every month. The Australian Bankers’ Association Inc (ABA) has a very handy table which details the fees charged by each institution on their concession card transaction accounts. For an easy-to-read breakdown of transaction fees, visit ABA.
Sometimes it seems as if there is no respite from increasing financial pressures. This week in our downloadable PDF how to Live on less, founder of The Cheapskate Club, Cath Armstrong, gives you tips for cutting costs and saving money. She shares how cutting back and saving a little can even help you achieve a debt-free existence or early retirement. Simple changes can make a difference and allow you to afford the occasional treat, definitely worth the effort.
The time to take stock of your finances and maybe even earn a few extra dollars is now. We’ve rounded up some of our favourite sites for making and saving money.
GoSwitch – If you’re lucky enough to live in Victoria, Queensland or South Australia then your energy market has been deregularised, meaning there are savings to be had on your fuel bills. Simply have at hand your latest fuel bills and head to GoSwitch to see what you can save, or for some great fuel saving tips – http://www.goswitch.com.au
Banks.com.au – Fees are par for the course when it comes to credit cards, bank accounts and loans but you can always make sure that you only pay fees that are absolutely necessary. Banks.com.au gives you the tools to compare credit cards, transaction accounts, loans, investments and more – http://www.banks.com.au
Fido – the watchdog website of the Australian Securities and Investments Commission will keep you advised of the latest scams to be aware of, give you tips on how to make your money work best for you, advise you how to find unclaimed money in Superannuation and bank accounts and have lots of useful financial calculators help keep your money in your pocket – http://www.fido.gov.au
Ebay – Most people have bits and pieces lying around that they no longer use and just hold on to them because it’s the easiest thing to do. Make your preloved treasures work for you by auctioning them on EBay. Simple to do, just upload a photo, add your description and wait for the money to roll in. Remember, one man’s junk is another’s treasure! – http://www.ebay.com.au
EmailCash – Make money online by completing surveys, entering competitions, carrying out tasks, clicking through to websites and shopping. It does take time to accumulate enough points to get any kind of cash back but if you have the time, or enjoy doing these things anyway, then you may as well get paid for it – http://www.emailcash.com.au
SmartSaver – save money on everyday items, life’s little treats such as takeaways and DVD hire or the services of a tradesman if you live in New South Wales, Victoria and Western Australia. SmartSaver allows you to search for discount coupons in your area and print them off, every little helps – http://www.smartsaver.com.au
Australians who are living in a retirement village (or planning to move to one) may be entitled to Centrelink rent assistance.
Centrelink rent assistance is available to those who are on a low income and rent in the private rental market. This may include retirement village accommodation, so if you are currently living in a retirement village, or planning to move to one, it is important to factor in any rent support to which you may be entitled. Your entitlement can be affected by the entry contribution you pay. If this amount is below or equal to $124,500, depending upon your weekly rental, you could be eligible. The rules vary for those in aged care where an accommodation bond is payable, as apposed to an entry contribution. Read about your rights and responsibilities here or phone the specific service lines below:
Retirement services - 132300
Disabilities, sickness and carers - 132717
TTY for those who are deaf-impaired - 1800 810 586
The new financial year is good time to evaluate how your money is working for you. Simple changes to credit cards, bank accounts and even superannuation can save you money.
People have different needs when choosing credit cards, superannuation and banks. Using independent, online comparisons can help give a clearer picture of what’s available. Remember to always read the Product Disclosure Statement (PDS) or seek independent financial advice before signing anything.
Perhaps you need credit cards that offers interest free days, no annual fee or a low interest rate. Compare Credit Cards Australia lets you search for the card that best suits your requirements, and gives you a quick comparison on what’s available on the market. For more information, visit the website.
Superannuation can be a minefield, with very few of us actually understanding what charges are made by our fund, how different investment strategies can benefit us and what a difference extra contributions can make. FIDO, the website of the Australian Securities and Investment Commission (ASIC), has a handy calculator that will help you work out if your superannuation fund is working best for you. For superannuation comparisons, visit the ASIC website.
Banks can seem to be life’s necessary evils, with many people gritting their teeth at charges levied by our financial institutions. Changing banks needn’t be the difficult, drawn out process it used to be and a simple check on what else is available may save you time and money. For a comparison on transaction accounts, check out www.banks.com.au.
Tax time is just around the corner but don’t despair, with our simple handy tips, you can make the taxman work for you.
For years you have dreaded tax increases and cursed the amount of your hard-earned money you’ve had to “give away” to the ATO. Financial strategist, Louise Biti, explains in Your Life magazine how you can Make tax your friend.
The price of everything is on the up, and up, and to balance the household budget, savings need to be made where they can. With energy prices on the rise, check that you are not paying too much.
GoSwitch offers energy consumers living in Victoria and South Australia the chance to compare energy plans, and make sure they have the best deal on offer. In 2002, the energy market was deregulated, supposedly delivering lower prices to consumers. However, actually comparing prices between companies is no mean feat, with an estimated 50% of households paying standard industry rates, the highest there is.
GoSwitchis free and easy to use. Simply type in a few details from your last energy bill and in a few minutes you will be provided with a list of companies supplying your area, ranked in accordance with price. There is no risk involved in switch retailers, as all companies are regulated to ensure standards of service.
Already launched in Victoria and South Australia, GoSwitch will be available to consumers in Queensland and NSW in the coming months. With the average household spending $1,800 on energy bills each year, any savings will be welcome.
Keep your money in your own pocket and check out the savings you could make.
A new service developed by the Financial Planning Association will give Australians access to general financial advice at no cost.
“Ask an Expert” is an online question and answer facility to be launched during Financial Planning Week (19-25 May 2008). A panel of expert financial planners will answer consumers’ emailed questions on financial matters as wide-ranging as superannuation, savings and investments, managing tax and retirement planning”, said FPA chief executive officer Jo-Anne Bloch.
“We believe that Ask an Expert can fill a gap by providing information about financial matters which will enable people to make more informed decisions, or take the next step towards getting personal financial advice. The service will be trialed for one month to assess demand, with a view to continuing on a long term basis.
“The answers given by our panel will be limited to general advice which does not take into account the personal circumstances of those asking the questions. Consumers will be encouraged to seek personal financial advice from professional financial planners where appropriate.
“Our panel of experts is made up of Value of Advice Award winners who are Certified Financial PlannerTM professionals.
“People using this web-based service will receive a response directly and, every month, selected questions and answers will be posted on the FPA website so that others can benefit from the knowledge shared.
To “Ask an expert” go to www.fpa.asn.au and click on the link. To find a professional financial planner who is a member of the FPA click on “Find a Planner”.
To help you start, ClearView Retirement Solutions has created a range of free online financial tools. These calculators help you understand how much you’ll need in retirement and plan for the future in just a few minutes.
Calculators range from a simple budget planner for determining your current cost of living, to a tool for estimating your superannuation entitlements at retirement.
Planning is an important part of good financial management. Taking steps to control your finances today could make a long-term difference to your savings and investments.
ClearView’s calculators include:
• Budget planner – This simple tool is useful for determining your current cost of living while helping you decide how much you can save.
• Income in retirement calculator – This tool helps you to estimate your income requirements during retirement. As a rough guide, you should target a retirement income of 50-70% of your pre-retirement salary. This is because many costs you would incur normally would no longer apply.
• Capital investment monitor – Want to know how much you’ll have to invest at retirement? This simple tool helps calculate your total wealth (such as superannuation payout, savings, and sales proceeds) less major expenditures such as renovations, motor vehicle purchases and overseas trips.
• Superannuation estimator - This calculator allows you to see how much your superannuation benefits may be worth at retirement and how much you could need to save to reach your desired level of income.
• Money longevity time line – This simple calculator provides a projection of how long your savings could last in retirement based upon your weekly income needs.
• Estate planner – A useful tool if you’re near retirement. It helps you to determine how much money you can receive during retirement while providing for dependants or family.
• Salary sacrifice comparison – This calculator enables you to compare the difference between salary sacrifice versus post tax contributions into superannuation.
Planning is an important part of good financial management. Taking steps to help control your finances today could make a long-term difference to your savings and investments.
To start using the calculators, simply go to the ClearView website at http://www.clearview.com.au
The start of the year is a great time for a stock-take of your financial position. There are four easy steps to get you on track to achieving your financial goals.
1. Taking stock
You need to know what you have, what you owe and then decide where you can cut back or how much you can save for that special purchase. We know it’s a frightening thought but do it step by step and it won’t seem so daunting. If you’re going to succeed, you need a realistic benchmark, a clear understanding of where you are financially.
You’ll need to gather your credit card and bank statements and bills for the last three months. On a piece of paper or spreadsheet, set up three columns, essential (rent, water, electricity, etc), discretionary (needed items but could spend less on) and impulse (don’t need at all). Now list all the money you’ve spent on these items over the last three months and total them. This will give you a good idea of where your money is going. Calculate each category as a percentage of your total expenditure and if your impulse buys are more than 30% of your total expenditure, then you probably need to re-evaluate your relationship with money.
For a useful home budgeting calculator, click here.
2. Cut the costs of your banking
$5 a month in account fees may not seem like much but over the years it all adds up, especially if you have more than one account or use ATM’s that don’t belong to your financial institution.
You need to ascertain how much you’re actually paying in bank fees. Go through your bank statements for the last three months and total all fees charged, you’ll be surprised! Next, got to you bank and ask what they can do to lower your fees, it maybe that a different type of account incurs less fees. Remember, you’re their customer and it pays to shop around and find out what other banks are offering, some offer fee rebates to pensioners or those on low incomes, and if they can’t match or better what is being offered elsewhere, be prepared to switch banks. Also, banks do make mistakes so it pays to check your statements carefully.
Even if you only manage to safe a few dollars each month, it’s better in your pocket than theirs!
For a comparison of carious financial institutions accounts and their fees, click here.
3. Do you really need it?
Always ask yourself this question before buying something and if possible, sleep on the idea of purchasing it before you do, you’ll find that 80% of the time you don’t buy it.
Spend one day a week without your credit card and when you’re comfortable doing this, make it two, its surprising how quickly you’ll get used to paying cash and not buying unnecessary items. Also, ask your financial institution if it offers a Visa debit card linked to your account, that way instead of buying things on credit, you’re actually using your own money but have the convenience of a Visa card.
Look at how you pay your credit card balance and what fees are charged by your provider. If you pay off your total balance each month then make sure you are not charged and annual fee and if you have an outstanding balance each month, look for a card that offers the lowest interest rate and the most interest fee days each month.
For a comparison of credit card fees, click here.
4. Know when to ask for help
If you have more debt than you can handle or are struggling to meet the minimum repayments on your borrowings, then its time to ask for help. It may make you feel uncomfortable at first to discuss your financial position with a stranger but it will empower you with the knowledge and confidence to tackle your problem and more importantly, help get you out of the financial hole you’re in.
Financial counsellors do not charge a fee or have a conflict of interest with credit providers, they can help you negotiate payment terms that should be easier for you to manage and help you budget your money more effectively. They are Government funded although you may be able to find one through your church or community organisation.
Centrelink also offers a Financial Information Service, and although it does not provide specific financial advice, it will help you understand terminology, financial tools and assist with making sense of financial services, products or planning.
To find a financial counsellor in your area, click here or for more details on Centrelink, click here.
The FIDO and Understanding Money government websites are a useful resource for up-to-date information and to educate and empower yourself in money matters.
FIDO is the consumer arm of The Australian Securities and Investments Commission (ASIC). The website is an excellent source of money tips and advice about investments and other financial products. And should you be concerned about any written, telephone or online scams, then FIDO can help.
The ‘Understanding money’ website can help you with important financial basics such as budgeting and controlling your credit card spending, as well as offering information on superannuation, reverse mortgages and retirement planning. And to find out where you’re money blood pressure is at, check your financial health now.
ClearView Retirement Solutions has warned retirees who may be planning to relocate into aged care facilities could face higher costs as a result of imminent changes to Centrelink’s aged care assets test.
From 20 September 2007, retirees will no longer be able to exclude money held in complying income streams, commenced after this time, such as term allocated pensions from the assets test.
ClearView has urged caution because the changes could lead to hostels and nursing homes that use the test to calculate accommodation bonds and daily care fees, imposing substantially higher charges.
ClearView technical manager, Helena Gibson, warned of the potential for retirees to lose significant sums of capital and its ability to generate income. ClearView has suggested a possible solution. Depending on their particular circumstances, retirees could restructure their assets to reduce living costs significantly and increase their retirement choices in the process.
“The cost of aged care in Australia can be considerable,” says ClearView technical manager, Helena Gibson. “For many people, entering a hostel or nursing home can mean selling a large portion of their assets including the family home.
“Effective retirement planning involves being aware of specific events and issues. Taking action before the 20 September deadline can make a significant difference to a retiree’s finances and future quality of life.”
Accommodation bonds are negotiated prior to entering a hostel or nursing home. The size of the bond is based on an individual’s total assets including their home, car and superannuation. There is no upper limit on the bond amount. However, care facilities must leave an individual with at least $33,000 in assets.
As of 1 July 2007, where a hostel bond exceeded $132,000, individuals might also be liable for higher fees for basic daily care. Below is an example of the benefits of investing in a complying income stream.
Rose, a widow aged 72, has been assessed as needing hostel care. Her only assets are $100,000 in superannuation and $100,000 in shares. If she continues her current asset arrangement, the accommodation bond could cost her up to $167,000. She may also need to pay a higher basic daily care fee of $38.35, or an extra $2,767 annually. For bonds less than $132,000, Rose would only pay $30.77/day.
If Rose invests her super money into a complying pension before 20 September, the amount she reallocates will be ‘hidden’ when calculating the bond amount.
As Rose only has $100,000 left that is assessable, the maximum bond she could be charged is $67,000. Rose would also benefit from income received from her pension and lower basic daily care costs.
In addition to lower hostel costs, if people invest in a complying pension before 20 September, they will qualify for a 50 per cent exemption on the value of their investment – from the Centrelink assets test. The assets test encompasses most assets excluding the family residence. Retirees may receive benefits including eligibility for a full or part pension and the Pensioner Concession Card, which provides benefits including discounts on prescription medicines and a utilities allowance. Call ClearView on 132 976 or click here for more information.
Before making a decision about a complying income stream product you should consider the relevant product disclosure statement. Helena Gibson is a representative of ClearView Financial Management Limited. The case study has been created to illustrate a specific concept. The calculations are real given the stated circumstances and are current as at 1 September 2007.
The Australian Taxation Office is reminding people that from 1 July 2007, new rules will apply regarding disclosure of your tax file number (TFN) to your superannuation fund.
The new rules mean that super funds or retirement savings funds without members’ TFNs will not be able to accept personal contributions, i.e. the contributions made from take-home pay. If this is relevant to you, check your superannuation member statement to see if your fund has your TFN. If not, you’d be well advised to let them know, so you can keep depositing that extra little bit. Find out more
FIDO, the consumer website for the Australian Investments and Securities Commission (ASIC) has launched a new online pension calculator, which incorporates the new superannuation rules, effective 1 July.
The new super rules will affect your pension, and a new pension product called an ‘account-based pension’ will be available. If you are thinking about purchasing this new pension, the FIDO calculator lets you see how long your money may last.
You can see what may happen if you take out an initial lump sum and see what how long your money will last if you take out different amounts of income each year. You can also compare various account-based products to see how they might affect regular income payments you receive during retirement.
Of course, you need to consider your own personal circumstances and for a final decision, get expert advice. To go to the new calculator click here
Stay safe online with a great website which can assist you to protect your identity from unscrupulous types who want to steal personal data. The information aims to arm consumers with simple, practical tips on how to be streetwise in cyberspace.
The website is a joint project by the Australian Banker’s Association (ABA), the Australian High Tech Crime Centre (AHTCC) and the Australian Securities and Investments Commission (ASIC). You’ll find tips to protect yourself from people finding out your personal details, including credit card or bank account numbers. You can also take an online quiz to find out your personal security risks, plus there’s helpful information on subjects such as ‘If your wallet or handbag is stolen’ and ‘How to check your credit file’.
And remember: never give out your online or telephone passwords. Banks will never ask for such information via email. To go the website click here
Another new website is all about protecting your financial identity in everyday life. It’s packed with practical information and tips about staying secure – in the home and online.
The Australian Bankers’ Association (ABA), the Australian High Tech Crime Centre and the Australian Securities and Investments Commission (ASIC) have worked together on this website with the aim of helping prevent cyber-crime and arming individuals with a few simple ways they can help themselves keep their financial information safe.
You can even take an online quiz to find out how safe your current practices are.
Go there
Australian Securities and Investment Commission
ASIC’s consumer watchdog site, FIDO, has advice on shares, investment basics, managed funds, master trusts and wrap accounts, superannuation, insurance, deposit accounts, scams, email fraud, company information, making complaints, getting good advice, and a great deal more readily accessible information. Available on the site is their Financial Information Directory which has information on over 300 Australian websites, pamphlets, brochures, kits, and other resources about financial products and services.
Go there
Also available on the site is the ASIC publication "Don’t Kiss Your Money Goodbye," a step by step guide to choosing the right financial adviser. On FIDO you can now read "Don’t Kiss" online or download an A4 version which has been specially prepared for easy printing:
Go there
10 tips for safer electronic banking is another valuable guide from ASIC’s FIDO.
Go there
And if you never seem to have enough money, try FIDO’s Budget Planner.
Go there
Australian Investors’ Association
"Investors Helping Investors." Activities of the AIA cover most aspects of investing: the main asset classes; portfolio management tools; and some of the structures (superannuation, trusts etc). Many members want to learn more about investing; some want to share their experiences with others; and some want to see that the individual investor gets a "fair go".
Go there
Australian Shareholders’ Association
The ASA protects and advances the interests of all investors. Its vigilance and persistence in matters such as related party transactions, the disclosure of remuneration and executive option scheme performance hurdles have contributed to significant improvements in the corporate governance of Australian companies. Members are encouraged to attend regular information meetings in Sydney, Melbourne, Brisbane, Perth and Adelaide. Investor Relations Committees meet regularly to monitor company activities.
Go there
Department of Family and Community Services
FaCS and the National Information Centre on Retirement Investments, Inc. (NICRI) have jointly written "Investing Money - Your Choices" to help you understand your options so you can get the best from your savings and investments both before and after you retire.
Go there
Complaints
If you need help to make a complaint about a financial institution please check our Advocacy and Dispute Resolution page.
Go there
Counselling and Financial Difficulty
FaCS Booklet
FaCS also publishes Australian Retiree - Your Choices, which is designed to help self-funded retirees, including those living on superannuation, maintain their chosen retirement lifestyle. This booklet is a starting point for finding out about information or assistance from federal, state or territory governments and community support groups. There is information on the very wide range of the programs, services and options on offer. You can download this booklet entitled Australian Retiree - Your Choices
Go there
Financial Institution Information
Financial Information Service
Centrelink’s Financial Information Service is a free and independent service available to anyone. You do not have to be getting a payment from Centrelink to use this service. Find out how this service can help you:
Go there
Financial Planning
"Australia’s premier retirement planning and lifestyle journal." This national colour magazine for seniors has articles of interest, ability to subscribe, and growing data base for those planning and entering retirement.The Australian Tax Office (ATO) has made a few changes to superannuation splitting, capital gains tax and the medical expenses tax offset. And as a senior, you may be able to pay less tax this year. Sound good?
Want to pay less tax? You may be eligible for the senior Australians tax offset, which allows you to earn more income before you have to pay tax and the Medicare levy. In some cases you may not have to lodge a tax return any more. The ATO website has information on eligibility and an online calculator.
Go there
If you make a super contribution directly to your spouses account, you may now be able to claim a tax offset, provided your spouse's assessable annual income plus fringe benefits is less than $13,800. That's not the same as if you make a personal contribution to your own super fund and split part of that to your spouse's account.
If you have a self-managed super fund, you may have received returns of capital (or non-assessable amounts) in respect of listed company shares you own. This could affect your tax as shares may make capital gains which must be declared in your 2005–06 tax return.
Thinking of some cosmetic surgery? Or having your teeth done? Be aware that payments for cosmetic operations which don't get a Medicare benefit and dental treatments which are solely cosmetic no longer qualify for the medical tax offset.
ASIC’S tips for choosing a financial advisor
The Australian Securities and Investments Commission (ASIC) has offered six useful strategies for consumers in search of a financial adviser. These are a summary of the information contained in the free booklet, Getting Advice , which ASIC has jointly produced with the FPA.
Many people feel that they want or need financial advice, but find the hardest thing is knowing how to choose the right financial adviser. Mr. Greg Tanzer, ASIC’s Executive Director of Consumer Protection, offered the following tips for choosing a financial adviser:
Copies of Getting Advice can be downloaded from ASIC’s consumer website, FIDO or by calling ASIC’s Infoline on 1300 300 630.
Allocated pensions are a popular form of retirement income streams which can be purchased with superannuation. They can also be a highly tax-effective method of accessing your super. But comparing them is often a nightmare. So you can evaluate how different product fees affect the regular income payments you receive in retirement, ASIC has developed an online allocated pension calculator.
Available on the FIDO website the allocated pension calculator looks at varying factors, including fees and investment strategies, on the amount you can draw down and how long this income stream might last. @boutSeniors test drove the calculator and found it fairly challenging. Make sure you download the seven-page PDF explaining how the calculator works before you try it out. If you are already receiving an allocated pension you will need your latest member statement or annual benefit statement.
If you have yet to purchase an allocated pension, you will need the most recent product disclosure statement in order to extract the information on management and adviser fees and costs etc. If you’re not the full bottle with financial services, nor an accounting guru, we suggest that you use this calculator in good company – such as your family accountant.
Test it for yourself and tell us your thoughts.
For those who wish to work beyond the age of 70, there appears to be a penalty, with employers no longer required to pay the guaranteed super contribution on their behalf. This would seem to work against the need for retention of older workers.
This penalty was the subject of a recent article by Anne Lampe in The Age money section, which gives an excellent summary of what older workers are dealing with.
Go there
Although people may be attracted in theory by the idea of bequeathing a house or money to family or friends when they die, new research in Britain has found that two out of three adults with the means to make a bequest say they plan to enjoy life and not worry too much about leaving a legacy.
Results of the first-ever national survey of attitudes to inheritance, carried out for the Joseph Rowntree Foundation, show that people tend to take a relaxed view. Even among pensioners, a majority reject the idea that older people ought to be careful with their money, so they can bequeath something when they die. Little more than a quarter of those with the potential to make a bequest say they will deliberately budget to do so. For more information [see doc inheritance]
The study, by Karen Rowlingson of Bath University and Stephen McKay of Bristol University, also reveals widespread misunderstanding about liability for inheritance tax. Although the tax was highly unpopular, only a small minority of those surveyed knew it had been levied on just 6 per cent of estates during the previous year.
The study, based on interviews with a representative national sample of 2,000 adults found that:
For those struggling with tax returns, there is a free service by volunteers accredited by the ATO. Operating from different community centres, volunteers can assist with tax returns ( Paper or Electronic Lodgement ) for people on low incomes, Managed funds, Shares, Capital Gains / Loss & also Rental Properties depending on the accreditation of the volunteer. Volunteers will be contactable via the ATO in July.
The Tax Office’s website provides current reliable information about tax issues. You will find a range of publications, tools and calculators to help you get your tax right.
You can also phone the Tax Office on 13 28 61 between 8am and 6pm on weekdays.
Do you know the secret to saving money? Simply saving more, and spending less is often the best answer to funding your retirement. A website devoted to ideas on how to save more is an excellent starting point for those keen to stretch their income for more information. Subscribe to the free newsletter, The Secrets to Saving Money in Australia, and check out the budget tip sheets on the site. The website also has an abundance of archived information on past hints to save dollars. Highly recommended.
Go there
The ATO has reminded Australians who use a tax agent to prepare their return to check that the agent is registered. This reminder comes after two companies were sentenced in the Downing Centre local court for breaches of the Tax Act and fined over $8,000. You can check if your tax agent is registered simply by checking online.
The companies H L & Associates Pty Ltd & H Lal & Associates were found guilty of falsely advertising as registered tax agents and charging clients a fee to prepare tax returns.
Only a registered tax agent can charge a fee to prepare and lodge your return, so it’s important to check you are using a registered tax agent. A list of registered agents can be found at www.tabd.gov.au. This website also contains a list of the responsibilities and obligations of a tax agent - a handy checklist for the service you receive. You can also check with the Tax Agents’ Board on 1300 362 892.
A loan from the government? You’re joking!
ASIC’s consumer watchdog site, FIDO, has advice on shares, investment basics, managed funds, master trusts and wrap accounts, superannuation, insurance, deposit accounts, scams, email fraud, company information, making complaints, getting good advice, and a great deal more readily accessible information. Available on the site is their Financial Information Directory which has information on over 300 Australian websites, pamphlets, brochures, kits, and other resources about financial products and services.
Go there
Also available on the site is the ASIC publication "Getting advice", a step by step guide to choosing the right financial adviser. On FIDO you can now read "Don’t Kiss" online or download an A4 version which has been specially prepared for easy printing:
Go there
10 tips for safer electronic banking is another valuable guide from ASIC’s FIDO.
Go there
And if you never seem to have enough money, try FIDO’s Budget Planner.
Go there
"Investors Helping Investors." Activities of the AIA cover most aspects of investing: the main asset classes; portfolio management tools; and some of the structures (superannuation, trusts etc). Many members want to learn more about investing; some want to share their experiences with others; and some want to see that the individual investor gets a "fair go".
Go there
The ASA protects and advances the interests of all investors. Its vigilance and persistence in matters such as related party transactions, the disclosure of remuneration and executive option scheme performance hurdles have contributed to significant improvements in the corporate governance of Australian companies. Members are encouraged to attend regular information meetings in Sydney, Melbourne, Brisbane, Perth and Adelaide. Investor Relations Committees meet regularly to monitor company activities.
Go there
The economy may be in recovery but with recent interest rate increases, many Australians may still be facing financial hardship. Taking control of your finances when you’re struggling with money may be daunting but the good news is that there are a range of free services to help get your finances back in order.
The cost of living has crept up on most of us and what we could comfortably afford last month, might become a financial burden next month. The most important thing is not to bury your head in the sand and hope that things will improve. Financial counsellors help people, free of charge, who are in financial difficulty or who may shortly be facing money problems. They are based in every state and territory.
Financial counsellors will help you take control of your finances, get your debt to a manageable level and can refer you to support services, such as gambling, family or personal counselling.
For more information on how financial counsellors can help or where to find your nearest counselling organisation, visit the Australian Securities & Investment Commission.
The Australian Government funds community organisations to provide free financial counselling services to low income earners who are experiencing financial difficulties. Find out about the Commonwealth Financial Counselling Program (CFCP) and other financial counselling services, and see the directory of organisations .
providing CFCP services
Centrelink’s Financial Information Service (FIS) offers counselling to help you manage your pension or give advice on how to plan for retirement or other life stages. For more information, visit Centrelink.gov.au
Centrelink’s Financial Information Service is a free and independent service available to anyone. You do not have to be getting a payment from Centrelink to use this service. Find out how this service can help you:
Go there
Commonwealth Securities. From this Commonwealth Bank site you can search and compare over 200 unlisted managed funds, compare performances and view fund profiles.
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TOP 10 Tax Return Errors and Most Forgotten Deductions
Tax time is just around the corner, but it is highly unlikely that Australians will claim all the tax deductions they’re entitled to according to new survey results from Count Wealth Accountants. The company surveyed its network of more than 450 accounting practices Australia-wide asking them to rank the top 10 most forgotten deductions and offsets and the top 10 most frequent errors people make in tax returns. Count performed a similar survey in 1999 and the current results show that Australians are continuing to make many of the same mistakes. Capital Gains Tax and depreciation matters both ranked highly as common tax errors. In this year’s survey, 68% of respondents named omitting interest as the number one tax error – a repeat of the 1999 survey. This includes any interest earned from a bank account, credit union or building society. It is a challenge to keep up to date on deductions, and if you feel you are not abreast of new information, you should seek professional guidance.
From the 2005 survey:
Top 10 Most Common Errors in Tax Returns
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