19/02/14: Age Pension Bonus: Last chance to register

Move quickly, deadline approaching!

If you're still working, male, and you were aged 65 or over (or 63.5 or over if you're a female) before September 2009, then you need to read this article.

If you fall into this age group and you expect to receive the Age Pension when you do finally retire, then you need to be aware that the Pension Bonus Scheme (PBS) closed to new members from 20 September 2009. Assuming you fall into this specific age group, the good news is that you can still register for the Age Pension Bonus, but you will have to hurry because applications close 28 February 2014.

Background: The PBS is a scheme to encourage older Australians to defer taking the Age Pension. The scheme pays a tax-free bonus to eligible individuals who work beyond Age Pension age, provided that they qualify for the Age Pension when they eventually retire. The maximum payment available is around $47,000 when you defer claiming the Age Pension for five years or more, and you're eligible for the full Age Pension when you do claim your entitlements. If you're eligible for a part-pension, you may be entitled to a part-Pension Bonus.

According to Centrelink, you will be eligible for the Age Pension bonus if you satisfy the following conditions:

> reached Age Pension age before 20 September 2009 (age 65 for men, 63.5 for women).

> continue to work since reaching Age Pension age.

> have not yet claimed the Age Pension.

> register before 1 March 2014.

If you have already applied for the PBS, then the scheme continues to apply for you, subject to meeting the scheme's 'work test' condition.

Note: Your eligibility for the PBS runs from the time you register, rather than the time you reached Age Pension age.

If you think that you may be entitled for the PBS, we recommend that you immediately make an appointment with Centrelink to formally determine your eligibility. Westmount clients can call our office if in doubt - we'll perform a quick calculation based on your current circumstances - beats waiting in a queue! Rick Maggi (Westmount. Financial Solutions.)

25/02/14: Spending your super lump sum?

Tread carefully...

The decision about whether to take super benefits as a lump sum, superannuation pension or both as a lump sum and a pension is a key financier issue. But be careful, funding your retirement requires serious resources… Read more here  Rick Maggi (Westmount. Financial Solutions.)

23/01/14: Expect more...

The risk of a share market correction...

Since 1950 the average cyclical bull market in Australian shares lasted 48 months with a 126% gain. The current bull market has gone for 28 months with only a 37% gain. So where are we now in the cycle? Are we heading into a bear market already or is there more growth to come? Read on…  Where are we now?   Rick Maggi (Westmount. Financial Solutions.)

17/01/14: The Year Ahead

Westmount Clients Only

19/12/13: The Fed finally tapers

...and what it means for investors

Overnight the US Federal Reserve announced that it will begin carefully and slowly scaling back its massive stimulus program next month. It is the central bank's first step towards winding back the stimulus that has helped the US recover from its worst recession since the 1930s and a sign that the US economy is recovering.

In response, the US share market surged by almost 2% and at the time of writing, local markets are up by about 1.5%. Our local currency immediately dropped to 88.18 US cents but then quickly recovered to 89.45 US cents as investors digested the news. Most importantly, this should be viewed as good news. AMP Capital's Dr Shane Oliver discusses the implications for investors here. Rick Maggi (Westmount. Financial Solutions.)

18/12/13: Mid-Year Economic & Fiscal Outlook

Game on...

The Government's Mid-Year Economic & Fiscal Outlook (MYEFO), announced yesterday by Joe Hockey, included, among other things, changes and clarification on 92 tax and superannuation measures that were announced, but not legislated, by the previous Labor Government. Of the 92 measures, 34 will proceed, 3 will be amended and 55 will be scrapped. Read the changes here   Rick Maggi (Westmount. Financial Solutions.)

11/12/13: Review of 2013, outlook for 2014

Insights from AMP Capital's Shane Oliver...

It's that time of year again where we can take a look at the year that was, and then look forward to the next twelve months. Read more here  Rick Maggi (Westmount. Financial Solutions.)

30/11/13: Deflation or rising inflation?

What is the risk?

AMP Capital's Dr Shane Oliver looks discusses the potential consequences of a deflationary spiral versus rising inflation on your hip-pocket. Enjoy. Read more here  Rick Maggi (Westmount. Financial Solutions.)

15/11/13: China on track

Better than expected...

China's growth cycle is stabilising and that's good news for Australia's economy, our markets, and possibly your super fund. AMP Capital's Dr Shane Oliver weighs in on recent fears over slowing Chinese growth with a typically calm, well balanced commentary. As always, his article is easy to read and not overly technical. Enjoy! Read more here  Rick Maggi (Westmount. Financial Solutions.)

04/11/13: Avoiding excess risk in a low-interest environment

Don't upset the fine balance...

The strong growth in the prices of many Australian shares over the past year is attributable, in part, to the buying of yield-hunting investors. A number of high-yielding financial stocks, for instance, are trading at or near to record highs.

Predictably, in the prevailing low-interest environment, many investors are now turning to more concentrated portfolios of high-yielding shares in an effort to maintain their investment yields and their lifestyles. But, unfortunately, this pursuit of yields comes at the cost of undertaking a higher level of risk for an investor's overall investment portfolio.

Rather than exposing portfolios to higher risk and upsetting carefully diversified portfolios in a hunt for income, investors should focus more on a portfolio's total return – that is the combination of its income and capital growth. With this approach, investors in need of more income than produced by a portfolio draw an amount taken from their portfolio's total return, taking into account cash-flow and capital appreciation.

In this way, investors can remain on track to achieving their long-time goals without upsetting their portfolio's diversification and without taking greater risks. Rick Maggi (Westmount. Financial Solutions.)

21/10/13: Your retirement savings check-up

Are you on track?

How often do you check whether your retirement savings are on track to finance your planned standard of living in retirement? Such check-ups are a crucial part of sound financial planning.

One of the most common times for a retirement-savings check-up would be when individuals enter the final decade or so before their intended retirement date.

Such a check-up may encourage you to really concentrate on maximising your super in the countdown to retirement and possibly to reconsider your target retirement date.

Ideally, of course, retirement-savings check-ups should be undertaken throughout a person's working life to see if the savings are growing adequately.

Ross Clare, research director of the Association of Superannuation Funds of Australia (ASFA), writes in the October issue of the association's magazine Superfunds that individuals and Government policymakers "perennially" ask the question whether retirement savings are on track.

In his cover story - headed Is super on track? - Clare writes that individuals are interested about whether they can afford their wanted retirement lifestyles. And policymakers want to know whether Australia's retirement savings will be adequate and whether some pressures will be taken off the age pension.

Clare notes that superannuation coverage and the amount of super savings have significantly increased since the introduction of the superannuation guarantee scheme in 21 years ago.

However, his article clearly shows that the latest super balances at the age of likely retirement are still markedly below the amount needed to finance what ASFA regards as a "comfortable" standard of living in retirement. This remains the position when the age pension is taken into account.

The latest ASFA Retirement Standard report estimates that a "comfortable" standard of living would cost a single person $41,197 a year or a couple, $56,406. (The issue of what constitutes a "comfortable" living standard is debatable.)

A table prepared by the Australian Bureau of Statistics for ASFA lists the average financial assets of employees aged 60-64 years of age in 2011-12 as: cash, $19,858; shares, $10,663; and superannuation, $183,254.

Are your retirement savings on track to meet your retirement goals?

Robin Bowerman, Vanguard Australia.  Rick Maggi (Westmount. Financial Solutions.)

08/10/13: The US budget standoff

Here they go again...

With US Republicans and Democrats going head to head over budget and debt negotiations, the rest of the world looks on powerless and bemused. Beyond some of the media hysteria, in this article AMP Capital's Shane Oliver provides a balanced, sober look at the debt ceiling standoff and the likely outcome.  Read more here  Rick Maggi (Westmount. Financial Solutions.)

25/09/13: The outlook for unlisted commercial property

Have returns peaked?

Australian unlisted commercial property returns have been strong over the last three years, recovering from the GFC driven slump of 2008/09. So can these high returns be maintained or are we moving into a lower return phase? Read more here  Rick Maggi (Westmount. Financial Solutions.)

09/09/13: Australia's housing outlook

...and implications for investors

In this commentary, MLCs Senior Investment Strategist, Michael Karangianis, takes a balanced look at our housing sector, contrasting the Australian landscape with experiences overseas. A good, simple read. Read commentary here Rick Maggi (Westmount. Financial Solutions.)

05/09/13: Australian profits, the economy and shares

Another from Dr Shane Oliver

In this update, AMP Capital's Dr Shane Oliver takes a close look at where we are right now in the cycle, company profits and the risks and opportunities going forward. In a background of growing worry over Australia's economy, this is a timely and poignant article. Read more here  Rick Maggi (Westmount. Financial Solutions.)