When do you start paying down the mortgage?

Will it just happen when there is always the choice between lifestyle & wants & that better word need.

Really that’s the decision that you have whether it is you for the family or Joe for the country.

Joe would be like some of the males we see i.e. scrimping on the small stuff & then spending big on the toys & cigars.

E.g. 12b on jet fighters or 20B on a health research fund which can be better done by anyone other than government.

We just tuned into viewing Bill English [Joe’s equivalent NZ treasurer] lauding New Zealand’s government return to a 372M surplus.

Apart from demonstrating that they have taxed too much he spoke of ‘ careful stewardship’ of the public’s money’ and ‘responsible management’. 

His concerns were  the uncertainty of New Zealand’s two major trading party’s China & yes Australia.

New Zealand can now afford free doctor’s visits for children & allow more for social security.

You have options when there is less debt & you can use your savings.

Why are the bank share prices so high in Australia?

It’s simply because of the huge debts that family & businesses have & let’s not forget the 50B on credit cards.

We viewed a WA share broker putting a sell on Westpac this week ‘as no one remembers what a bear market in bank shares is like’.

Yes WBC has moved from $14 per share to $35 since GFC.

You & Joe have the same choice.

Joe has made changes to his spending habits in the budget.

If you want several summaries of the budget then just ask us. 

However the big one to us is the assessing of the value of your super asset when it is in pension phase.

Until the end of this year your own super in pension has been accessed on its income alone through a income test only.

Now the assets behind your super pension will also be tested to the same deeming rules that have applied to other financial investments.

The assets test is more stringent.

We read today that that will mean  $80 less per week is the difference pension changes will make in a decade according to the council on aging. 

Or from the Australian  May 15, 2014 12:00AM

Significant’ aged pension changes target recipients

TONY Abbott’s changes to the age pension are dramatically removed from “fiddling around the edges” and will affect the scope of the payments for decades, cutting swathes of would-be recipients out of the picture.

The seniors whack in the budget included eventually raising the pension age to 70 in 2035, freezing indexation thresholds on the assets and income test for the payment and rewinding the size of investment returns seniors can get before this affects the pension rate.

Just Maybe paying down the mortgage & not adding to your super until later might be good for you.

There are many who at our age through life’s journey have not paid down their mortgage or even their credit cards.

We have never understood why the government allows you a lump sum taxx free from your super once you retire.

Hence it would not surprise us if that loophole is closed in the future.

 i.e. increase the ‘preservation age’.

Don’t assume you can pay off your mortgage from your super or partake in Australians’ great 2^nd dream travel on the canals in Europe or the grey nomad route.

As Ron suggested today ‘Reward yourself today’.

However ‘careful stewardship’ of your finances is what you expect from Joe & yourself today.

As we said to Ryan this week

‘we work for you so that you are in a better position in three years time’.

Joe’s changes not only affect future pension entitlements, they also may  affect the health card & other state concessions.

You may want to look at other health & financial options especially if the pension is to age 70.

There are often two solutions to a problem as we were reminded when doing some Naplan maths coaching this week.

As Chris & Ray & Mark & Ryan  others did this week call us on 07 3848 1088 or email us or contact us through our websites today.

‘The pieces in the jigsaw may fit in’.

John McAuliffe