AVOID ANY RELIANCE ON GOVERNMENT WELFARE

The consultation paper on retirement incomes – as part of the Henry review into the tax system – notes that there are now five people of working age for each person over 65.

However by 2047, this ratio will fall to only 2.4 persons.

The consequence of having relatively more of us retired and less of us in the workforce will mean that the cost of the age pension will increase from 2.5% of the gross domestic product to 4.4%.

In addition there will be larger demands by the health sector to pay for the ever increasing cost of caring for an increasingly older population and ever increasingly costly medical equipment and drugs.

The economy will simply not be able to sustain the pension as we currently know it.

A likely scenario is that we will only have access to the pension, and the Pharmaceutical Benefits scheme etc., once we have exhausted our super.

So plan now to avoid any reliance on government welfare, as it may not be there when you’ll need it.

If you would like me to help you explore your options for 20-25 years of dignified retirement, contact me – Bernard Kelly – any time on admin@retirelaughing.com

IPSWICH NEEDS 116,000 NEW HOMES BY 2031

The number of new homes in the Ipswich local government area will treble over the next 20 years if the Queensland Government's forecasts are right.

Its draft regional plan for southeast Queensland, released on 7 December, predicts that the Ipswich region will need 116,000 new dwellings by 2031.

Ipswich Mayor Paul Pisasale's reaction was to declare: "Bring it on."Ipswich wasn't ready 10 years ago, but we are now."

The new regional plan, which will be open to public comment until April next year, proposes that Brisbane's western corridor be the area's next major population growth.

The state's new draft regional plan for southeast Queensland forecasts that 735,500 dwellings need to be built in the region by 2031, a 65 per cent jump on the current number of 1.1 million.

I'm Bernard Kelly http://www.retirelaughing.com/

Source: The Courier Mail 8 December 2008

an investment property about to welcome its first tenants

OLD v. NEW – the $100,000 DIFFERENCE


A private client recently asked “with home prices falling, shouldn’t I take advantage of lower prices?”

My response was along the lines “certainly – if you can find a suitable investment $100,000 below the price for new”

Let’s say that to attract a suitable tenant into an established house, you’ll need an investment that’s not too old, say ten years old.

It works this way – if you purchase existing housing stock, you’ll pay full stamp duty – that’s $10,000 extra.

Then the difference on the depreciation on a house ten years old compared to one off-the-plan today is probably $40,000.

Then repairs and maintenance during the next ten years could well be $50,000 for an investment already now ten years old, compared to virtually zero for an off-the-plan investment during its first ten years.

That’s the $100,000 difference.

So if I offer you an investment today for say $380,000, to be better off you’ll need to find something that will attract a suitable tenant for less than $280,000. That’s quite an ask.

And you’ll also miss out on the research and packaging – which regional market will be best over the next five years, and my introductions to an investment- aware funding strategist, to an investment-aware property solicitor, to an investment-aware property accountant, to an investment-aware insurance broker and to an investment-aware asset manager.

And now with lower interest rates, an investor on $70,000 will only need to outlay $28,800 over the next six years to be in full control of this $380,000 investment.

If you would like me to explain in more detail, contact me – Bernard Kelly – anytime on admin@retirelaughing.com

PRESERVE YOUR NEST EGG

How long will your savings last?

By Robert Brokamp of The Motley Fool

There you sit with a finite pile of savings from which you will need to take all or most of the money to support your retirement spending.

The accumulation phase of life is nearing an end.

How much of that stash can you safely take each year to ensure it lasts your lifetime? Will you take the same amount annually? Or will you just buy all the cool toys and vacations you've always really wanted, and let your slightly older self deal with the fallout a few years later?

All of these questions boil down to one over-arching theme that we've thoughtfully put into this question: How long will your money last?

The "70% to 80%" rule of thumb is based on the assumption that many of your current expenses will go away in the golden years.

For the most part, this is true. Once you kiss the boss goodbye, you'll no longer endure the following:
Work-related expenses,
Social Security taxes
Contributions to retirement plans
Mortgage payments, (if your house will be paid off)

There are two other ways your expenses might decline.

First, retirees tend to downsize – but the savings might not be there.

With no need to keep the four-bedroom house now that the kids are grown, for example, some pensioners flee the big house for the something smaller. However the cost to move into – and maintain – a new home or retirement village can still be quite expensive.

However, some require the same level of income in retirement they enjoyed while working.

How? It comes down to this: If you're not making money, you're spending money, particularly in the early retirement years.

Another big expense is health care.

A survey in the Journal of Gerontology found that 61% of couples age 70 and older and 54% of single adults spent at least 10% of their retirement savings on health care. A startling 45% of couples spent more than half of their savings to medical bills.

Medical insurance is not free (there are on-going premiums), and it doesn't cover everything (e.g., most long-term care).

The real price of leisure

So what will retirement cost you?

The best research we've come across concludes the following:

A "safe" withdrawal rate ranges between 4% to 6% of a retiree's starting portfolio.

The accuracy of that approximation depends on your age. If you're 65, then that estimate is quite accurate; if you're 25, thankfully you have many decades to improve your lot.

CONCLUSION

But the simple answer to all of this is – if you want an income of $50,000, this equates to 5% of $1,000,000. And only a portfolio of residential real estate is inflation protected.

Let us help you calculate what you can expect (and what you'll need!) when you retire.

Contact me – Bernard Kelly - anytime at admin@retirelaughing.com

SUCCESSFUL PROPERTY INVESTING

Lance Winslow writes:

Despite what you might think success is never an accident.

Oh sure, you might have some luck along the way that puts you in a nice situation for a while, but it's not long term.

Success is achieved by those who capitalize on their luck and reduce their risks or turn-around their failures and challenges.

If you look at some of the most successful folks in the world, you will realize that they often came from nothing.

Many were orphans and didn't even have a pot to use for their bathroom needs. But how can this be, how is it that someone can have such bad luck and turn all that around and become successful?

Simple, because success is never an accident, many of these people because they worked hard, they had no choice, it became a habit and they just never stopped once they achieved a comfortable lifestyle.

Working hard, working smart, making lots of friends and never giving up were just part of who they are.

These same elements of success are available to everyone, even if so many people choose not to accept these principles.

After all, we have free choice, free will and we live in a free society.

You are allowed to succeed beyond your wildest dreams or fail, but it is your choice.

Success is no accident, no one I know is successful over the long-haul without working to attain it.

No one should feel guilty for being successful, just like no one should make excuses for choosing not to be successful.

The fact is that it is up to you, so please consider this.

If you have innovative thoughts and unique perspectives, come think with Lance; http://www.WorldThinkTank.net/.

Bernard Kelly http://www.retirelaughing.com/

IPSWICH TO REVIVE INNER CITY

The good news for my private clients – and other residential real estate investors who target Ipswich – just keeps getting better.

Now the Ipswich City Council has purchased the major – but outdated – Ipswich City Square Shopping Centre and will guide its redevelopment.

Built over 30 years ago, the Centre has been neglected by its owners, and has suffered badly with competition from the new RiverLink shopping centre, just across the Bremer River.

The Council will plan the redevelopment, and will call for tenders to complete the works. It will not become the developer itself.

When completed in four years, the site will be able to accommodate 10,000 workers in high rise buildings, as well as both retail and commercial space.

Ipswich has 43% of all industrial land in south east Queensland, and experts predict that the surging support sector will ensure that this development will be a success.

If you want me to help you explore options to expand your investment portfolio, contact me anytime via email: admin@retirelaughing.com