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Autumn Newsletter 2012 Money Works Financial Planning Pty Ltd

March 2012

A Word from Chris

Inside this issue:

A Word from

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Money Works Financial Planning Workshop

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Year 2013-14

Rate (%) 9.25

2014-13

9.5

2015-16

10

2016-17

10.5

2017-18

11

2018-19

11.5

2019-20

12

Lost Super! Do you know that there is over $20 billion dollars now in Lost Super? It’s just sitting there in super funds waiting for you, if it’s yours to claim, do it! Why is it lost? Well for many reasons really, but mostly because the beneficiary has moved and omitted to tell his/her advisor, or super fund of the change of address. You may have changed your job and your industry fund doesn’t have your new details. So how do you find out? You go to the tax office website or you can contact us and we can do the work for you.

Money Works Financial Life Planning Workshop

Aged Care Loans 2 Finance

Superannuation Guarantee rate (SGC) to rise to 12% The current rate of the SGC is 9% p/a and will be increased gradually with initial increments of 0.25% points on the 1st of July 2013 and on 1st July 2014 with further yearly increases of 0.5% up to 2019/20 when the full rate will be 12%. WHY: This measure directly addresses major issues relating to our growing population, as by 2050 over 25% of the Australian population will be over 65 YOA. This will help increase the future retirement incomes for many Australians i.e. A 30 year old earning an average full-time wages will have an additional $108,000 in retirement savings. Australia’s pool of retirement savings today stands at over $1 Trillion in super, thus this will increase the investment potential for many thousands of Australians. While employers will take increases in SG Contributions into account when negotiating future wage agreements, I increases to future wages are expected to be sufficient to insure that overall real wages continue to grow.

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Mature Worker Benefit

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BT Investor Site

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EmbroidMe

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This workshop will provide insights into one of the biggest statistics affecting your life right now;- 97% of people do not achieve a comfortable financial goal for their retirement. We invite you and a guest to attend as our gift to you. The workshop will cover interesting subjects such as… The difference between financial independence and financial security. What your superfund financial target should be for financial independence What are the unknown risks which can greatly affect peoples level of financial

security now and in the future How much Super the average Australian has available at age 65 and how far short they will be for a quality lifestyle What has insurance got to do with financial planning? How business owners can use their business's asset value to achieve their financial goals. As an added bonus you and your guest will receive a ticket to a complimentary movie night with drinks and nibbles provided. Keep Tuesday May 15th free for this event, stay tuned for more information on the evening and start thinking about who you would like to invite.


Autumn Newsletter

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Aged Care Loans may be Option A REVERSE mortgage scheme that protects seniors against a fire sale of the family home to pay for aged care is being considered by the Gillard Government. The Reverse mortgage reforms could also be used by the Government to soften the blow of forcing seniors to pay a greater share of the true cost of high care nursing home care – a key recommendation of last year’s Productivity Commission report into aged care. The two options under consideration by the Gillard Government include a beefed-up system of regulation for reverse mortgages or a government backed low interest loans scheme similar to the existing pension scheme. A market-based lender is the more likely outcome that a governmental-backed loans scheme. Forced to pay soaring accommodation bonds of $250,000 or more to secure a place in aged care homes, many families are forced to sell their homes at a discount to quickly secure cash. Aged care Minister Mark Butler told the Sunday Mail. “The priority for us is to make sure people have choices.” Reverse mortgages would allow seniors to unlock equity in their homes to pay for aged care bonds, but they would not have

to pay back the money until they died or sold their home. While reverse mortgages are available, their use is not widespread. The Productivity Commission suggested a government-backed scheme that would be available only for aged care costs, rather than simply holidays and spending money. “We know that older Australians have worked hard to own their own home before retirement and if they choose to access the equity in their home, then they deserve to be adequately protected,” Mr. Butler said. Seniors Australia Michael O’Neil warned the Government to tread carefully when forcing seniors to use the family home to pay for care. They are quite uncomfortable with the focus on the family home and the link with reverse mortgages in particular”, he said “People want to pass the family home on to the next generation, their grandchildren. There’s a real fear about partners, people still living in the home. What happens to them?”. Source: Your Money Lift Out 6th of Feb 2012

Finance: Remember the Abba song – “Money, money, money, it’s a rich man’s world”? If this is the dominating ingredient in your life, then it’s not a good recipe. Having a lot of money does not always equate with a better quality of life. Worrying constantly about money, hoarding it and not using it to enjoy your retirement can affect your health. Some people worry about never having enough money. But then, how much is enough? That’s why it is so important to have a financial plan. Then you’ll have a much better idea how much you will need to finance your activities and be less likely to rush into big expenses that can chew up your assets. It is much better to “try before you buy” – rent or hire and see how the idea of selling up your home to make a sea change, or buying a motor home, works for you.

Today, retires have so many more choices – about where to live, travel opportunities, when to actually retire, to name a few. How often have I heard people say after having a health crisis that HEALTH is more important than WEALTH?

(Taken from Rotarian Life & Leisure Feb 2012 Issue 6 )


Autumn Newsletter

Mature Worker Benefit A couple of years ago I wrote an article about the Centrelink Work Bonus and the advantages it brought the age pensioners who wanted to continue working. The Work Bonus had replaced the Pension Bonus Scheme. There were changes to the scheme last year that have made it even more attractive and flexible for retirees. Under the old rules, 50% of the first $500 of employment income a fortnight would be exempt under the Centrelink income test. For example, if a couple was earning $13,000 a year from working, only $6,500 was counted. If they have no other assessable income, they would still receive the full pension. The new rules now allow you to average your earnings over a whole year. This will be very advantageous to people who only work part of the year. In effect, you can build up credits, if not used, for future use. A simple example is if someone earns $300 a fortnight, only $50 a fortnight is counted. Where under the old rules $150 would be counted. Let’s say that you earn $300 one fortnight and nothing the next, you will be able to “bank” $250 in credit for the next fortnight you work. You are able to continually build up this credit, but to a

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maximum of $6,500, and it can be carried forward to future years. Building up this credit is particularly useful if you have a part-time job for only a short period of the year. I have a client who works as a Santa Claus at Christmas for six weeks but does nothing else for the rest of the year. From July 1 last year he built up a credit of $2,000. Also using his credits during the sixweek period meant that almost none of his $500-a-fortnight pay would be counted and therefore would not affect the age pension. You need to remember that this only applies to employment income. Earnings from other sources such as deeming on financial investments and super pensions are counted as normal For those who want to work but fear the effect on their pensions, this is an opportunity well worth consideration. Source: Your Money Lift Out 6th of Feb 2012 (John Oliver)

BT-Investor Site As an investor, it's important to be able to access information on your accounts quickly and easily which is why BT-Wrap have developed the Investor site, where you can access your Wrap and SuperWrap portfolio information 24 hours a day, 7 days a week from anywhere in the world. The Investor Site has a range of reports for you to choose from as seen below:

Cash Account holdings, as at the date specified. Transaction History Provides a transaction listing of all trades for a selected period.

You can also access e-statements for end of year annual statements and elect if you wish to receive statements via email instead of post. From this menu you are also able to access annual reports Asset Allocation Shows the asset allocation for each from previous years all in the one convenient location. of your investments. Cash Statement Shows the current balance available To access the investor site you simply go to and a transaction statement of the movements within www.investorwrap.com.au/ login using your account number and a set up password, which we can obthe Cash Account for a selected period. tain for you on request Cash Summary This report can be run for any period and start browsing. and displays one line for each cash transaction type. Fees Summary Summarises the fees charged to the Cash Account. Performance Report Shows the performance of your Wrap portfolio. Portfolio Valuation Shows the quantity and market value of each investment in the portfolio including


The information provided in this newsletter is of a general nature only and does not constitute financial advice or a recommendation. You should obtain and consider a Product Disclosure Statement (PDS) before making any decision to acquire a product. Please seek expert advice from a qualified and experienced Financial Planner or accountant or other professional, prior to making a decision on your financial situation. Detailed information on our services and fees is provided in our Financial Services Guide, which is provided prior

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PH: 08 8304 8088 FAX: 08 8431 8211

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Money Works Financial Planning Pty Ltd is a Corporate Authorised Representative of Millennium3 Financial Services Pty Ltd ABN 61094529987 AFSL 244252 Unit 7, 50 Borthwick Ave Murarrie Qld 4172

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