How you could save $135,772 in Capital &

How you could save $135,772 in Capital.

Probably the most important table you need to consider .

	Modest lifestyle single p.w.	Modest lifestyle couple p.w.	Comfortable lifestyle – single p.w.	Comfortable lifestyle  couple p.w.
Housing – ongoing only	$60.65	$58.22	$70.30	$81.49
Energy	$40.48	$53.77	$41.08	$55.72
Food	$74.90	$155.15	$107.00	$192.60
Clothing	$18.05	$29.30	$39.06	$58.60
Household goods and services	$26.44	$35.85	$74.38	$87.14
Health	$37.28	$71.95	$73.97	$130.55
Transport	$93.36	$96.01	$139.13	$141.77
Leisure	$71.76	$106.91	$217.46	$298.00
Communications	$9.33	$16.33	$25.64	$32.64
Total per week	$432.26	$623.49	$788.02	$1,078.50
Total per year	$22,539	$32,511	$41,090	$56,236

 

The ASFA Retirement Standard benchmarks the annual budget needed by Australians to fund either a comfortable or modest standard of living in the post-work years. It is updated quarterly to reflect inflation, and provides detailed budgets of what singles and couples would need to spend to support their chosen lifestyle.

According to the latest data for September 2012, in general, a couple looking to achieve a comfortable retirement needs to spend $56,236 a year, while those seeking a ‘modest’ retirement lifestyle need to spend $32,511 a year.

The full article on this we have but unfortunately not the link from the Courier Mail 2/5/13

& hence you are welcome to email us for it.

So we have some choices i.e. do we want to be comfortable or better on retirement & when do we want to retire.

The Capital required depends on the interest rate available & how long do we live & do we draw down the principle.

Simply if you want to be comfortable & rates are 5% [which is not today] then the capital you require is 1,124,720+. If you draw down on principal then the article suggests  a capital sum  of 900,000 at age 60 or 780,000  at age 65.

In every case the capital required to retire on is MUCH More  that the house that we live in.

However what does Mum suggest we do. ‘Settle down & buy a house’.

We would agree with that if you follow the basic guidelines which are

·         Is it cheaper to buy than rent?

·         Will this be your last house?

·         Where are you sending the kids to school?

·         Do you have a 30% deposit?

·         Are you ‘handy’?

Surely the larger capital sum needs more time as more important. Hence we suggest that a house might be deferred although we certainly agree that a family needs a home.

We are all sucked in by the big boys who lie & we need to re-examine our concepts & priorities.

Let’s look at the table & examine where you could make a serious saving.

The article says The seniors’ healthcare card ensures that the cost of the drugs she uses don’t eat up her remaining savings. (Our refrigerator does look like a pharmacy.)

i.e. your future health bill could be on average 130.55p.w. or 6,789p.a. which suggests $135,772 in capital is required to fund your health needs.

We need convincing that the health system will actually look after you in your later years. We believe that it looks after itself, is avaricious & simply doesn’t solve your future medical condition.

George wants to know today that there may be a better solution than morphine for his back pain. There are too many vested big boys & we aren’t dopes.

What has worked for us for 15 years & our family & 600 top athletes & the WTA girls has been on the prevention side. Our top clients agree with us. Nobody even wants the flu  especially an employer or the self employed & we know that no one gives you your due respect when you are either poor or unhealthy.

 Nobody wants to use their insurance which is a lot dearer than our  alternative suggestion. It won’t get cheaper & the 30% rebate is reducing by stealth.

As ‘Gerald’ a radiologist client said years ago ‘if everyone was on these he would be out of a job’.

Ok we are not qualified in the medical business but  we probably can race you up our drive.

Our proposition for you is

·         If we were in your position what would we do?

·         Is there a more efficient way for you?

If you want to maximise your dollar then health is certainly one way for you to do so.

Why not request our comparative guide to indicate one company that maybe able to help you.

Maybe you could use a personalised health assessment available on its site normally valued @$55.

It only takes 15 minutes to complete.

You will receive details of your top health risks, a customised health and lifestyle plan  and a nutrition recommendation for you. Most people find these reports invaluable.  
 

If you would like to spend more on travel & less on health either today or later then we can introduce you so that you are healthier. Hence fewer money worries. It is as Myrna wrote on ‘peeling the onion’ today ‘a core belief’ of hers & ours.

You might need more capital as you might live longer. Yes they do cost you 10+p.w. each.
Wwe haven’t factored in that capital cost.

Of course as it is  nearly June 30 you might want a financial efficiency examination.
You are welcome to call on 07 3848 1088 or email or visit our websites.

We have various EOFY strategies for you. We may have a better way to maximise your dollar.

 

John McAuliffe

 

 

It is 2 Trillion, Penny

If we recall from our school days there were 12 pennies to a shilling & 20 shillings to a pound & a pound converted to 2 dollars.

Hence it appears that the $17 billion shortly as we heard Penny on Sky Business this morning state is a lot more than 17 billion pennies.  It is 17 x 10⁹ X 12 x 20 ÷ 2 =  2.04 Trillion Pennies.

‘Opposition treasury spokesman Joe Hockey tweeted 7/5/13

 “Wong says revenue write-down’s now $17bn. Last week Gillard said $12bn. Week before Swan said $7bn. Budget in complete chaos !!”

As we wrote exactly 3 years ago this week on our 60^th birthday ‘girls fib’.

The difficulty is keeping track of all the fibs so  a girl doesn’t become entangled & confused.

We also read today Government paid $2bn by telcos for wireless spectrum, $1bn less than hoped

So your taxx is going to go up that is a fact & that is not a fib.

We have a list of taxes that government could do to bring this 2 trillion deficit back to some sort of control.

What are you going to do about it.?

We read ‘Rich get richer, poor pay their taxes’ & it is simply a matter of you asking for advice.

It is simply a matter of sitting around the table & maximising what you can do before June 30 which is only weeks away.

We have a list of 12 strategies that we could do for you. We could add to that list.

 It appears that life is going to be tougher i.e. increased taxx & less government welfare.

 Today

Government scraps plans to increase Family Tax Benefit A in Federal Budget

Now Joe today says he will wind ‘back universal access to payments’" .

Advice is smart & it is not sales.

We had an enquiry from Howard this week who had been advised to take some income protection.

However he had been sold a ‘rental property’ that is cashflow negative by the average 10K p.a.

When he only makes 65K as a council employee & now has total debts of 650k then we don’t know how he will live.

i.e. Howard Earns 65K, Taxx =12.6,Net income 52.4K

Cashflow= -10k

Lives on 42.4K = 815p.w. from which he has to pay his own mortgage with no room for error say disability longer than sick leave.

Of course he hadn’t seen the property which is in another state.

Sold & not advised.

Howard has bought a rental property because of rightly perceived government risk. He has wanted to reduce his taxx but the Swan bluster & talk of taxes on super has concerned him.

However he has taken a big risk with big borrowings & we recall from Debbie that her biggest regret was buying her rental property.

We suggest that it is now time to overcome your inertia & at least meet us before end of June.

Let’s not forget why we invest or save.

According to the latest data for September 2012, in general, a couple looking to achieve a comfortable retirement needs to spend $56,236 a year, while those seeking a ‘modest’ retirement lifestyle need to spend $32,511 a year.

How much capital do your require is the challenge?

A common rule of thumb is that if you want to retire at 60, you will need about 15 times the amount you have calculated for your annual after-tax retirement expenses. So if you estimate $60,000 per year then you will need $900,000.

If you can wait until 65, you may only need 13 times expenses, which will be $780,000.

How are you going to achieve this?

We advise & not sell & our parameters are

·         Is this what we would do ourselves?

·         & what is a [taxx] efficient solution to your problem?

You are welcome to call us on 07 3848 1088 or email us or visit our websites

You might ask us why we spell Taxx as taxx. It might also save you a pretty penny.

 

John McAuliffe

 

How did we help our very recent clients we have been asked twice this week?

How did we help our very recent clients we have been asked twice this week?

1.       ‘John’ we helped by consolidating his two supers & adding 1 m life cover as he has 4 young children to two different partners. As he is starting his own business he doesn’t have the cashflow to fund the premiums & hence his super equity will do so for some time.

2.       ‘Ann’ who is 57 we helped by  converting into a pension fund with a 15% taxx rebate  & allowing her to build capital in a zero taxx environment & constructing a portfolio for her from her lazy super which had been in cash since the GFC. Her new additional income is to be used to reduce debt on the rental property but it could be used to build up more retirement  capital in super.

3.       ‘Charles’  wanted to extend downstairs so that his 24 year old son had his own space. We have been building a portfolio from the equity so that Charles switches his debt into deductible debt. Charles who now has grandchildren wants to create an estate for his two children & currently 1 grandchild & we created an instant 500,000 estate with  level insurance to age 70.

4.       ‘Douglas’ who is also 57  used his portfolio dividends to reduce his margin loan by 70,000 & his now deductible mortgage. He has two supers which need to be optimised from a 15% taxx environment into a Zero tax pension with 15% taxx rebate. He needs  funds to support his daughter @ uni & fund his Merck.

5.       ‘Tyler’ wanted income protection as he had just finished his trade & wanted cover to provide an income to meet his mortgage & meals if he is disabled. He also contrary to our advice bought a brand new Ute as one does at that age of 21. How much did he lose when he drove it out of the yard?

6.       ‘William’ we have been counseling to complete his will & enduring power of attorney since he had a recent stroke whilst travelling overseas. We have reminded him of the 16.5% estate taxx that his estate might pay & these are not easy discussions.

7.       Let’s not forget ourselves. We were propositioned  by WOW to consider Life insurance from  their direct call centre. We asked for a quote for 500,00 & yes it was 578.75p.m. after their 10% discount. We immediately went to our own website www.johnmcauliffe.com.au  & which you can do also & mine was 412.83 through a major company. Yes a savings of 165.92p.m. or 1,9910 p.a. we could use that in many other areas. Rachel said it would take only 3 minutes to answer the questions. The major company needs a multi page application form & maybe blood tests & doctors reports. However they won’t debate the claim after they accept it as WOW or its insurer might.

8.       P.S all middle names.

 

We could continue but we trust this might help you to help yourself by contacting us now on 07 3848 1088 or email or our website

We simply do for you what we would do for ourselves if we were in your financial position.

You are different from everyone else & you need to discuss this over lunch with us.

 John McAuliffe

Have you planned your next trip?

What trip?


We have just returned from a very successful trip which started off with a four day conference. The conference was in itself very successful & would have achieved our dealer’s goals.


The planning included a great location Queenstown, speakers from various firms & meeting those with a similar calling of helping you plan & achieve your financial goals. The conference had as a major theme planning for our own businesses.


We recall from our introduction to our calling in the eighties ‘if you fail to plan ,you plan to fail’.


The conference was hugely successful due to the hard yards from Teresa in the planning stage. The conference planning would have started two years ago after the last very successful conference.


So to our trip. As Margaret yesterday said of her own different trip, a cruise, ‘the whole trip was great’.


We had as parameters a start point of a conference & an end point the school holidays. It may as well be spent travelling & touring & planning a necessary break from news & markets & silly details. It was great not watching the news or TV or reading emails & being oblivious to what was happening in ‘Wonderland’ & the Red Queen.


It worked & as cousin priest Geoff said it was ‘rejuvenating ‘. Although we had Planned & created a day by day itinerary there were surprises around every corner & most hours & we maximised the moment.

We do advocate trips away from the everyday to rejuvenate you.


Planning does that. It minimises the downside & forces ‘accountability ‘as Tony at the conference stated.

All businesses have a plan & if they want a loan or raise funds then they certainly do.
Business do a SWOT analysis. Strengths, Weakness, Opportunities & Threats.


Last night we played our usual weekly tennis doubles & the subject of proposed super changes came up. What was interesting was the other three who have retired were earning 100k from their supers & hence there were three of the suggested 16,000.

How did they get that sum of say $2,000,000 in their supers when they were also bring up families of four?


We suggest that they planned 40 years ago as Compound interest certainly helps. Yes their occupations & education also helped.


We were very pleased this week when Roger sent in his monthly cashflow HW that he asked what should his daughter do now that she is at uni & earning some income?

Yep in the 20’s is the time to do some self education & planning.

We don’t regret buying WBC @ 3.05 in 1979. When we went to the library in 79 to learn about shares there were no books on the subject back then. Yep true.


We spoke to Ann whose birthday is today. She is very excited about her trip to Alaska in 2 weeks. Why not when she has been planning it for a year.


We all have different destinations to go to & hence we all have different plans.


We just need to start or if we have we need to measure & benchmark our progress.

Where do you start?


‘If we were having this discussion in 3 years time & we looked back to today, then what do we need to do today that would make you feel you had made financial progress?


Simply ‘what is your Number 1 priority?


We travelled last week to visit ‘William’ who has spent the last 3 months on his back after a stroke. He had his insurances to enable his escorted flight from overseas & now in rehab. The next step in planning isn’t exciting but it is necessary.


E.g. lets complete the will & enduring power of attorney, & be very aware of the taxx on super to non dependants. Lets prepare for other ‘what ifs?’ Yes some details are hard to agree to.


As an email sent today said
‘Generally, aim to leave it to your spouse, your children, your grandchildren, and your extended family or to charity and not to the Australian Tax Office, your former spouse or to lawyers.


When we drove down the motorway we observed that all drive at the max 110k p.h. & there is now only a one second time gap between cars.

It only requires one blink. Claudia today mentioned her experiences on the motorway when a tyre blew out. She also mentioned what happens if you ‘collect’ 12 demerit points. How do you pay your mortgage then?


Is it only us who observe that many have a P plate. Do they want to go back and live with their parents?


If you have the mishap on the motor way then see us before the event. Ashley did from behind & he commented he could see it happening in the rear vision mirror but fortunately only the car need to be repaired.


If you don’t vote for the Black Duck then why are your funds in an industry fund & you see no one.


If you are over 55 then there is a strategy for Zero taxx within your super & maybe for debt reduction & building more capital.


Lets create a model portfolio for you with your goals & concerns in mind.


Peter this week described our lunch sushi as ‘beautiful’ & call us on 3848 1088 or email us or visit our website.


‘There is only one way and that is forward. It is how we go forward that needs to be discussed, debated and planned’. Jack the Insider.


Adam Scott has just won the Masters & we observe why.

His father is a golf professional, he thanked Greg Norman at his interview, he turned pro @ 19 which is 13 years ago & finally his NZL caddie has carried Tiger’s bag for 14 majors & the caddie’s father was also a professional caddie.


It doesn’t just happen.


Now could be the time to plan before June 30th the end of the financial year.

 

Nan has to pay What!!

We attended an open day recently at a brand new state of the art Aged Care facility. Yes you would describe it as 5 star *****.

Nikki  Gemmell  wrote in W.E. Australian 2/3/13 100 Not out  a very reassuring article on her Nan who ‘At her 100th birthday party she looked healthy, engaged, chuffed’.

If you have ever stayed or dined at a five star hotel or resort  then you may find as we did recently for a birthday dinner that you suffer from ‘Bill Shock’.

We were provided a guided tour along with a couple who were planning ahead. It is state of the art although Lex  asked if Wi-Fi was available & it will be but not today. Maybe a brickbat as the hotel reviewers would say. Probably the only one.

We completed the tour & then to the facility folder with the details.

There was the Accommodation Bond which we have explained before & remember it is refunded to the estate minus a maximum of $19,380. They weren’t small &  recall you must be left to 41,500.

Bonds vary according to whether you want or need a shared or single room.

However as they say ‘and there is more’.  There are daily charges as well.

1.       If you are ‘ defined’ medically by ACAT  &  enter high-level care then you may be asked to pay an ongoing accommodation charge instead of an accommodation bond.

As with the bond, each charge is negotiated individually taking into consideration the person’s assets at the time of entry.

Residents with less than $41,500 in assets will not pay the charge. Residents with more than $109,641 in assets will pay the maximum charge which is currently $32.76 per day.

Residents who pay a charge can rent out their former family home and it will remain indefinitely exempt from the social security assets test. In addition, the rental income will not count towards the social security income test or the income-tested fee .

2. Basic daily fee

The basic daily fee is paid by all residents as a contribution towards the costs of daily living such as meals, cleaning, laundry and heating.

Standard residents [Full pensioners and part pensioners ]currently pay $43.22 per day which is 85 per cent of the annual single rate of the basic age pension.

Income-tested fee

A resident may be asked to pay an income-tested fee in addition to the basic daily fee.

The Department of Health and Ageing determines the fee each quarter, based on the person’s income information as obtained from Centrelink or the Department of Veterans Affairs.

Income as assessed by social security as well as social security benefits are counted when calculating the fee.

If you are a standard resident  & earn additional income over $31.31  per day you will pay  an income-tested fee until the maximum fee of $68.65 per day is reached.

3. Extra service fee

The facility  offered an extra service fee  instead of an accommodation charge which was $54.85 per day. The facility sets the fee, which must be approved by the Department of Health and Ageing and varies from one facility to another depending on the services being provided.

This enables residents to enjoy a significantly higher standard of ‘hotel-type’ extras in accommodation, food and services. Hence the 5 star *****.

If you aren’t aware of these daily fees  then you have an !! moment.

As the manager explained  & as occurred with our client ‘William’ recently the need for aged care  can be in a moment & often due to a stroke. Maybe it is a fall as Nan becomes  frail over time.

Often decisions are not made by the person entering aged care, but by family and others, and often under pressure.

If these charges are a problem then they all depend on income & asset testing under both Centrelink & aged care rules. The problem occurs if & when the house is sold & funds are deposited in the bank.

If Nan has  more income & assets then Nan reduces her pension & other benefits.  

Also to help all concerned please ensure your will & an Enduring Power of attorney is up to date & in fact done.

John McAuliffe