All Financial Services

Switching is getting easier and can be worthwhile – by Paul Clitheroe

AFS — Wed, 16 May 2012 01:50:16 +0000

Australia is lucky to have a well regulated financial system with a wide range of institutions to choose from including the big banks, smaller customer owned banks, credit unions, building societies and non banks. Yet despite all this choice, we tend to stick with the same institution, even when we’re not happy with it.

Federal Budget 2012 – What does it mean to you?

AFS — Thu, 10 May 2012 06:48:11 +0000

~Superannuation concessional contributions cap of $25,000 for all for two years

~High income earners superannuation contributions subject to additional 15% tax

~Business loss carry-back provisions proposed

~Changes to Family Tax Benefits

~New ‘Schoolkids Bonus’ for education expenses.

‘Smoothing the transition to retirement’ by Paul Clitheroe

AFS — Wed, 18 Apr 2012 00:56:59 +0000

Unlike previous generations, today’s workers can gradually ease themselves out of the workforce and into retirement with the help of a financial product called a ‘transition to retirement pension’ (TRP).

Prior to mid-2005 the only way we could access our super was to retire permanently from the workforce. The trouble was, and still is, that not everyone wants to retire when they reach ‘preservation age’ (that’s 55 if you were born before 1 July 1960, or up to 60 if you were born after 30 June 1964). For many of our over-55s this restriction meant either slogging away at a full-time job or exiting the workforce before they really wanted to.

‘Card freebies cost, forget the free lunch’ by Paul Clitheroe

AFS — Tue, 10 Apr 2012 23:59:34 +0000

We all like the idea of getting something for nothing but when it comes to credit card rewards, chances are any ‘freebies’ you earn will come at a surprisingly high price.

Almost half of all credit cards offer points-based rewards, and while they have the potential to deliver worthwhile benefits, these cards should be approached with caution. They are best suited to big spenders who pay the card off in full each month.

That’s because reward schemes are expensive to run, so it’s no surprise that you’ll generally pay a lot more for a reward-based card than for a standard credit card.

‘Your super gets a boost’ by Paul Clitheroe

AFS — Tue, 03 Apr 2012 23:53:08 +0000

There’s been plenty of good news on the superannuation front recently, and for my money it reaffirms the value of super as an important investment for retirement.

In late March the federal government passed legislation boosting the Superannuation Guarantee from its current level of 9% to 12% by 2020. The increase will be phased in gradually to give employers an opportunity to adjust to the higher contributions.

It’s a great result for employees, and according to the Financial Services Council (FSC) over time the higher contributions will put an extra $108,000 in the retirement nest egg of the average 30-year old. Older workers stand to benefit too. Those aged 45 to 54 will have an average of $39,000 added to their long term super savings

‘Savings returns vary widely, so shop around for the best deal’ by Paul Clitheroe

AFS — Mon, 26 Mar 2012 05:36:50 +0000

Despite recent hikes in home loan interest rates, the major banks have been slow to raise rates on deposits. But your choice of savings account could be the real culprit behind low returns on your spare cash.

According to research group Canstar, almost one in three deposit accounts pay no interest at all on balances up to $1,000. One in two accounts pay less than 2%, and only one in four savings accounts pay a return greater than 4%.

‘Consultancy – an option for pre-retirees’ by Paul Clitheroe

AFS — Wed, 21 Mar 2012 02:44:08 +0000

By the time most of us reach our 50s, we’ve racked up considerable experience and skills in our chosen career, often with a valuable network of business contacts. These are things we leave behind when we retire but they can be useful assets for older workers who start their own consultancy.

It’s not uncommon these days for pre-retirees to start their own business. Over-60s can use their superannuation savings to buy into a franchise or other venture but it’s a strategy you need to think through carefully – preferably with the benefit of professional advice. If the business goes belly up you could lose a lifetime of tax-friendly savings. Even if the business thrives, there can be tax implications if you sell the venture later on when you’re ready to finally stop working.

Paul Clitheroe speaks financial sense at business chamber seminar

AFS — Mon, 12 Mar 2012 23:18:32 +0000

ipac founding director Paul Clitheroe spoke recently to an audience at the Hills Business Chamber Breakfast in Castle Hill, Sydney on a range of topics, including the current state of the Australian economy, the nations financial literacy, personal debt and the global financial crisis.

If you weren’t able to secure a seat then fear not as we’ve captured the footage, click on read more to view the webcast:

‘Looser lending limits have downsides’ by Paul Clitheroe

AFS — Mon, 12 Mar 2012 23:12:49 +0000

Banks are relaxing their lending limits, and while it’s a move that may be welcomed by first home buyers, I’m not convinced that being able to borrow more is always a good thing.

Research by comparison site Rate City shows that around 70% of today’s home loans require a deposit of just 5%. Put differently, it means that with savings of just $25,000 you could potentially buy a home worth $500,000.

Two years ago, when we were still reeling from the global financial crisis (GFC), only around one in two banks offered loan limits this generous.

‘Super’s still super’ by Paul Clitheroe

AFS — Tue, 06 Mar 2012 23:14:51 +0000

In the last few decades the nature of retirement has changed radically. It’s no longer seen as the beginning of our twilight years, but rather a fresh start. Financial security plays a key role in a quality retirement, and when it comes to laying foundations for our senior years, I reckon superannuation is still a super investment.

The beauty of super is that we generally can’t access it until we retire. That makes it an ultra long term investment that benefits from compounding returns accumulating over several decades.