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Retirement planning – the ins and outs of an annuity

An annuity is a little known income option for retirees that can provide some certainty in an uncertain world. Here’s how they work: What is an annuity? The concept of an annuity is fairly simple. You provide a lump sum of money and, in return, the annuity provider promises to pay you a series of payments over a set timeframe. In other words, you are swapping your lump sum of money for an income stream. This can assist to fund your retirement and replace the regular pay cheque you once received from work. Fixed term vs lifetime annuities There are two

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The impact of lump sum payments on Centrelink and your pension

So, your Great-Aunt Thelma has passed away and with no kids of her own, she has kindly left you some funds in her Will. Or, maybe you want to withdraw $20,000 from your super so that you can finally update the kitchen at home. But do you need to advise Centrelink? And will it affect your pension? The short answer is – it depends! If you’ve followed my material for long enough, you would know that there is rarely a one-size-fits-all answer with these types of questions. Lump sum payments and Centrelink Let’s start with the easy part. 1. Do

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How to manage the financial fallout from a divorce or separation

The reality is that a third of weddings will be followed down the line by a divorce. Knowing how to approach this traumatic situation can help make the process easier. So how do you manage the financial fallout of heartbreak?  It is a joy to share in the celebrations when two people publicly declare their eternal love and commitment. However, “eternal” these days is not necessarily “forever”. Having advised clients through the financial implications of relationship breakdowns, it is not something I would wish for anyone. Unfortunately, the sad reality is that a third of all marriages will end in

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Retirement – are the goal posts moving?

  I forever count my blessings in the role I do, as I can’t help but feel lucky getting exposure to so many different people in vastly different situations, on a daily basis. One of the most satisfying aspects of the financial planng profession is getting to know people who I otherwise would never have had the pleasure of meeting. And as such, through others I get to experience things that I otherwise never would have been able to (in my own little way – I call it ‘vicarious experiences’). Apart from the obvious things such as travel, I also

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Using Limited Recourse Borrowing Arrangements (LRBA) to invest in property – can it work for me?

If your advisor is talking to you about an LRBA, you may need to consider what’s best for you. While investing in property can be a good idea for some investors, the manner in which you do it is important. Tempted by the guru property expert offering to reveal the hidden secrets to owning failsafe property in your self-managed super fund (SMSF)? Heard that property investing is so simple even a dummy could crack the code? Seen the glossy ads from the one-stop SMSF shop that offers you an all-encompassing solution? If you’re tempted by this idea, have a nice

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Pension changes 2015 – What is changing from 1 January 2015?

The rules that deal with the treatment of incomes being paid from your super pension (i.e. account-based pension) are changing from 1 January, 2015. Currently for an account-based pension, Centrelink use the sum of your pension payments for the year and then subtract a deductible amount to work out how much income they count. It sounds technical, but the net effect is in many cases very little income (if any) is assessed from your account-based pension. However, from 1 January 2015, these rules will change. Account-based pensions will be placed into the category of ‘financial investments’ which means the deeming

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Debt – how much should you have?

Earlier this year I met with a mortgage broker to discuss some potential lending opportunities – the experience was fantastic and I strongly encourage you to find one you trust, as they do a great job. One thing that shocked me though was the amount that financial institutions across the country were willing to lend me. When it comes to personal financial advice, generally there are no hard and fast rules for answering questions like the one I’ve posed in this discussion. However, in this case I would be confident to say that the answer to this question is you

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Show me the value!

Cost is only an issue in the absence of value.  Think about it – when you know you’re getting value do you question the price?  Here’s another fact; money is difficult to earn but very easy to spend, so most of us will not hand over our hard earned dollars unless we feel we are getting something of value in return. When it comes to financial advice, what is value?  For some, it is paying somebody to give them investment advice so they feel they have a professional taking care of their investments.  For others, it can be a strictly ‘reactive’ service

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5 ways of saving for your child’s education

  Funding your child’s education is a hot topic today with the spiralling costs of schooling. Research conducted by The Australian Scholarships Group (ASG) on education costs, provides some food for thought. The research is based on a child starting pre-school today and suggests that opting for the private school route from Prep – Year 12, will set you back a cool $367,569 per child. Even if you decide on a government school for primary years and private for secondary, you will still need to come up with $244,822. For most people, the task of finding room in the family

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21 days to secure your financial future

  This week is Financial Planning Week! If you have any burning questions about your finances, head to the Ask an Expert forum and ask a qualified expert for free. Unless you are one of the very few who win the lottery, securing your financial future has nothing to do with luck and everything to do with good planning and management. Not convinced? Consider the expression “If you fail to plan, you are planning to fail”. It’s commonly heard because it is true. And when it comes to managing your finances effectively, this expression is at the heart of what

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