Thursday, March 15, 2007

Newsletter March 2007


AM is a "news background" program broadcast around Australia at 8.00 am on ABC Local Radio.

On Tuesday 13 March 2007 it carried an item "Many baby boomers not living on easy street".

Here are some snippets:

"A million or more people appear to be heading into retirement with very little to see them through," said Professor Ann Harding, of the National Centre for Social and Economic Modelling.

"I guess they’re going to be relying on the taxpayer, not only for the age pension but also to keep funding generous pharmaceutical benefits and free aged care and free hospital care and so on."

"And for older baby boomers in their 60s, with children still at home, about one in five is still struggling to pay off their home mortgages so that they can enter retirement without a mortgage hanging over their heads," she said.

Paul Versteege, Policy Coordinator for the Combined Pensioner and Superannuants Association, said "people are realising that once you retire, you really are relying on your assets and basically that’s it.

"So, I think what we’re seeing is a huge push to accumulate more assets before people retire."

A word from a wise man

Malcolm Muggeridge once said "News is old things happening to new people."

It’s not new that most of us – with the exception of you and me – won’t have enough for 15-20-25 years of a dignified retirement.

However what’s occurring is that new people are suddenly waking up to this stark reality.

Let me know if you have friends, family members, or work colleagues that could benefit from my support as they explore their options.

My mobile phone: 0414 778 518 cell phone: 61 – 414 778 518

Retirement now costs more

It now costs $47,507 for a couple in retirement to have a "comfortable" lifestyle according to the Westpac- ASFA Retirement Living Standard.

The study, for the year ended 30 June 2006, also shows that a couple with a "modest" lifestyle requires $25,603.
The cost of living for those in retirement went up 3.8% last year, because basic needs – such as health services and food – increased far more than discretionary and leisure items.

Overall, health costs rose 4.6% while food costs were up a substantial 8.9%. These items represent a greater proportion of a couple’s spending in retirement than in the broader population.

Analysis: If you needed a (before tax) income of $47,507 today, you’ll need a fund worth $950,140 today, yielding 5%.

If you feel that your retirement funds – at that moment when you will opt out of the workforce – will be inadequate, phone me Bernard Kelly TODAY!

My mobile phone: 0414 778 518 cell phone: 61 – 414 778 518


Here are some more reasons why we all need investment properties to provide for 15-20-25 years of a dignified retirement:

A poll late last year by the American Association of Retired Persons found that half of boomers surveyed complain of some degree of hearing loss. A solution is a digital hearing aid, tucked into the ear canal. They are undetectable and adjust automatically to pick up soft sounds and squelch loud ones. They cost $3,000 per ear, and generally are not covered by insurance. They last five years.

Concerning knees and shoulders, joint problems can be treated for minimal cost with anti-inflammatory medication, physical therapy, steroid injections and supplements such as glucosamine. For serious problems, doctors increasingly use arthroscopy to look inside the joint with a tiny camera and make repairs that once required major surgery (from $2000 to $5000).

Excess weight puts pressure on knees and hips. But fitness freaks are more likely to incur the kinds of injuries that lead to joint problems down the road. Doctors in the US are already replacing more than 200,000 hips ($23 000 to $40 000) a year now.

Concerning the eyes, what's in: a surgical procedure ($1500 per eye) called conductive keratoplasty, or CK, to treat presbyopia, the all-but-inevitable age-related condition that makes it difficult to read fine print. The operation takes minutes and requires an eyedropper of local anesthetic. So far 100,000 Americans have had it.

Boomers also want to look younger. About 60% of men have significant balding by age 50. (About 2% of women also suffer major hair loss.) Medications work, but only so well. Transplants (up to $15 000) offer better results.

About 324,000 people in the US had clumps of fat suctioned out of their abdomen, necks, arms, legs and face in 2005. Recent advances in liposuction mean less pain and a faster recovery. Risks are low, and fat can't return where there are no longer fat cells. Allow $12,000.

15 Years from now

Q.1 In 15 years from now, how old will you be?

The answer is easy: you don’t need me to help you work it out.

Q.2 In 15 years, what will your income be?

The answer is easy – it will depend on the number of properties that have in your portfolio - but you’ll need support from me to help you achieve it.

Q.3 In 15 years, what will your expenses be?

The answer here is somewhat more difficult, however we do know that you’ll probably need to replace the car, continue to pay for medical insurance, there will be some house repairs, and of course you’ll want to be able to afford to visit the grandchildren.

You’ll need a continuing cash flow to support your lifestyle in retirement. And where will that cash flow come from? And don’t tell me "superannuation" – the rule of 72 still applies to any financial investment (just as it has for hundreds of years.)

You have a stark choice – either you invest, or you’ll end up on the aged pension.

My mobile phone: 0414 778 518 cell phone: 61 – 414 778 518

Warm regards

Bernard Kelly

P.S. Your highest compliment would be a Personal Referral