Money Magazine May 2016

I’m writing this “hello” as the sharemarket wraps up the best week it has had in the past six months. The S&P/ASX 200 Index finished up about 4.5% to close at 5157.5. The week also saw a big rise in part-time roles, which cut the job-seeking numbers to a 2½- year low. Got to wonder why we’re all so negative. Ah, yes, the sky’s about to fall on the property market. Why go out with a property cover story when this is about to happen? Not too sure about the sky falling but a storm is certainly brewing. The real concern, of course, is oversupply in inner-city apartments in both Melbourne and Sydney. While red lights may be flashing around high-rise units, property is by no means out of favour.…

Retirees pay their dues Thank you Ross Greenwood for your recent article. The government has lost itself. It needs to stop targeting those soon-to-be retirees and the already retired. There are a lot of aged workers who would rather retire than work but can’t stop because of a lack of finance. These are my suggestions: • Every person who reaches the age of 60 and retires from the workforce should get the aged pension. • Those who have gone without over their working life to save money (either via super or personal assets) so they could have a more comfortable retirement should not be penalised by the government, expecting them to use those savings to live on. I saved so that when I retire I can do all the things…

I read with interest Ross Greenwood’s article “Super caught in a class war” (April). If I understand you correctly, you think the family home shouldn’t be used to assess eligibility for an aged pension. [The Centre for Independent Studies and the chairman of the Productivity Commission, Peter Harris, have recently recommended that it should be.] Can I therefore infer that you would suggest my husband and I upgrade our house to a better one, thereby reducing remaining assets below the threshold, and live on the aged pension, plus benefits, and leave an appreciating asset (the house) tax free to our children? Silly me! I thought we would save for our retirement and not be a burden on the next generation of taxpayers.…

‘Life insurance’ is a good one – it’s death insurance DESPITE THE FINANCIAL services industry doing its very best to confuse the living daylights out of us, there are really only a few key money rules. Before I move on to that, though, it is worth mentioning just a few of the best efforts to really lead us up the garden path. “Capital stable” is a popular term in the marketing departments of many a fund manager or super fund. We all understand what this is about. Very logically, if we invest in a capital stable fund, our expectations are our capital will be stable. Wrong. In a decent market downturn we discover that it has exposure to growth assets. I appreciate that this is a sensible long-term idea but…

Since the beginning of the year, we have seen more than 20 mortgage lenders discreetly increase their home loan rates. While some lenders have increased only their investment loan interest rates, others have increased the rates across their entire suite of home loan products. With wholesale funding costs increasing and new prudential rules forcing Australia’s lenders to hold greater capital, it is likely that the recent spate of rate rises is merely the start of things to come. As such, we may see a greater number of lenders changing their product pricing out of cycle with the Reserve Bank of Australia (RBA). Looking at the RBA, it would appear as though there is room for it to cut the official cash rate at least once more before the end of…

Nominating a beneficiary allows the trustee of your superannuation fund to know where to pay your super death benefit when you die. Ideally you would make a nomination to guide the trustee. However, in the event that no beneficiary is nominated or if your nominations are non-binding, the trustee can choose to pay your death benefit to any of the eligible persons, including: your spouse (including a de facto); your child or children; your estate; and a person with whom you are in a relationship of interdependency or who is financially dependent on you. If you make no nomination, the trustee will typically write to your executor and your spouse and children, asking if they wish to make a claim for the death benefit, and asking who else might be…