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RetirementUpdate ISSUE 2JUNE 2014Jo LambleMaurice PataneMaggie BeerJeff BresnahanSusan RyanJust the two of usBudget bluesEat well for lessBalanced funds setto deliverYour right to workretirement planningsuperannuationaged carepensiongovernmententitlementsYOURLifeChoices Retirement Update June 20141

How Apia rewardsyour experience.Steve - Apia customerAt Apia, we love experience and like to reward it. Here’s a few reasons why so many over50’s are switching to Apia.We give you discountsWith Apia Drive Less Pay Less discount, customers saved on average 22% on theircomprehensive car insurance premiums if they drove less than 20,000km’s a year.We give you valueUnlike others, we don’t charge you extra to pay by the month.We’re always here for youAt Apia you can speak to a real person 24/7.If you’re over 50, call us for a chat and find out how Apia rewards your experience.http://www.apia.com.auEligibility criteria applies. Apia’s Drive Less Pay Less savings based on national average of 22% - a comparison against new Apia comprehensivecar insurance customers who drove more than 20,000 km between 1st September 2012 to 31st August 2013. Australian Pensioners Insurance AgencyPty Ltd ABN 14 099 650 996 (Apia), is an authorised representative of AAI Limited ABN 48 005 297 807, the product issuer. Before purchase, considerthe PDS by calling 13 50 50.APIA0847

FROM THE EDITORWelcome toYOURLifeChoices JUNERetirement UpdateRetirement means different things to different people, but good health, stablefinances, strong relationships, relevant activities and more than a sprinkling offun, are all elements which will make it successful. If you’re not quite sure if you’reready for retirement, either emotionally or financially, then our quick quiz on page 10may give you an indication of how you are really tracking.Legislation to be introduced following the 2014/15 Federal Budget means that we allhave to take a good look at our retirement plans, whether we have to work longer,save harder, or reconsider our current lifestyle. And while many will think the measuresannounced are particularly harsh, our no-nonsense financial planner, Maurice Patane hasquite a different view, believing that we all have to take responsibility to ensure our own,and country’s, financial future.Published by: Indigo Arch Pty LtdPublisher: Kaye FallickEditor: Debbie McTaggartAssistant Editor: SJ FallickCopy Editor: Melanie BallAdvertising: David FallickDesigner: Word-of-Mouth CreativePhone: 61 3 9885 4935Email: admin@yourlifechoices.com.auWeb: www.yourlifechoices.com.auAll rights reserved, no parts of this book may be printed,reproduced, stored in a retrieval system or transmitted,in any form or by any means, electronic, mechanical,recording or otherwise, without the permission in writingfrom the publisher, with the exception of short extractionsfor review purposes.IMPORTANT DISCLAIMERNo person should rely on the contents of thispublication without first obtaining advice from a qualifiedprofessional person. This publication is distributed onthe terms and understanding that (1) the publisher,authors, consultants and editors are not responsiblefor the results of any actions taken on the basis ofinformation in this publication, nor for any omission fromthis publication; and (2) the publisher is not engaged inrendering legal, accounting, financial, professional orother advice or services. The publisher and the authors,consultants and editors expressly disclaim all and anyliability and responsibility to any person, whether asubscriber or reader of this publication or not, in respectof anything, and of the consequences of anything doneor omitted to be done by any such person in reliance,whether wholly or partially, upon the whole or any partof the contents of this publication. Without limiting thegenerality of the above, no publisher, author, consultantor editor shall have any responsibility for any act ofomission of any author, consultant or editor.Copyright Indigo Arch Pty Ltd 2014On the issue of finance, Jeff Bresnahan of SuperRatings offers some general adviceon risk versus return in a super fund and NICRI’s Craig Hall explains the different typesof equity release products. We have the updated figures from the ASFA QuarterlyRetirement Standard so you can calculate how your own budget stacks up. And Kayehas explored the lessons that have been learned by Mark Weir, a Storm Financial investorwho is now being threatened with foreclosure on his home.Our regular updates on government, pension, health and technology offer a snapshotof ‘the need to know’, while in legal news, Rod Cunich of Slater & Gordon explains how toensure your medical wishes are followed. We also have important details of the changesto aged care funding which take effect from 1 July 2014. And Age DiscriminationCommissioner Susan Ryan explains your exact rights in the workplace.For accomplished cooks, or those stepping into the kitchen for the first time, Maggie Beeroffers her recipe for Beef Stew with Olives and Orange – delicious. And if you’re planningto spend more time with your partner in retirement, relationship expert Jo Lamble hassome sage advice for when it’s just the two of you.Updating your retirement choices,Debbie McTaggartEditorYOURLifeChoices Retirement Update June 20143

from the publisherIgnorance is neverblissAccording tonearly 4500respondents,the outlook isbleak.CONTENTSFrom the Editor3From the Publisher4Retirement attitudes survey5Government update6Pension update7Retirement living costs8How does your spending compare? 9Retirement quiz10Health update13Technology update14Your rights at work15Budget detail revealed16Aged care: July 1 update18Super update20Living wills explained21Deals and discounts22Eat well for less23Lessons learned24Equity release explained26Diary dates27The two of us28Find work after 5029Club YLC304In the wake of this year’s FederalBudget we asked YOURLifeChoices’100,000 members their views onretirement, retirement income andretirement affordability. According tonearly 4500 respondents, the outlook isbleak.The infographic on the right shows someof the responses, but the story behind thegraphs is even more worrying.The respondents to this survey comprised56 per cent baby boomers (current age50-67) and 44 per cent seniors, with 45per cent fully retired, 20 per cent workingunpaid (volunteering), 18 per centworking full time and 17 per cent workingpart time.A clear majority (60 per cent) of thosewho are already retired and on a full AgePension confirm that the current paymentis insufficient to lead a modest lifestyle. Thisis not an opinion – it is a factual responsefrom people who have tried to live on thepension and found it wanting.Worse still, when we ask those who areyet to retire (of whom 75 per cent arelikely to need a full or part pension), ifthey know how much the Age Pensionpays, 76 per cent say ‘No’ and of the 24 percent who replied ‘Yes’, a staggering 80 percent stated the wrong amount. Ignoranceis bliss, but not when it comes to yourretirement income.Similarly, when it comes to confidencelevels about having sufficient savings tofund a reasonable lifestyle, 62 per centof our members were not confident atall. When asked why they thought theydid not have enough, most felt that theyhad never earned enough to save therequired amount (38 per cent) or hadsuffered unexpected economic hardship(35 per cent). Despite the introductionof compulsory super more than 20 yearsago, the boomer cohort has clearly had* YOURLifeChoices Retirement Attitudes Survey 2014 was conductedin June 2014, receiving 4303 responses to 19 questions.YOURLifeChoices Retirement Update June 2014insufficient time – and I would argue,government support – to create areasonable retirement nest egg.And finally, the Budget. Yes, all those mediapolls seem to be supported by our surveyresponses, with 55 per cent agreeing thattheir retirement plans and lifestyle will beaffected by the proposed pension changes.How will our retirees and pre-retirees dealwith this? The overwhelming majorityof respondents (68 per cent) plan to cuttheir household costs, while 19 per centwill work longer and 12 per cent hope toincrease their income.So what do these results tell us about thestate of retirement in Australia? Sadly, itconfirms that 20 years of successive federalgovernments’ inaction on financial literacyfor retirement means that most olderAustralians are severely underfunded forthe extra years they will probably live. Notonly do they have insufficient savings, butthey also have little idea how to grow theirnest eggs and believe cutting spending tobe the only solution. Reversing the Futureof Financial Advice (FoFA) legislation, toallow commissions for bank staff sellingfinancial products and removing theneed for financial planners to act in theircustomers’ best interests, is the worstpolicy at the time of greatest need. Whatwe need, instead, is a bi-partisan approachto retirement income and the challengeof helping older Australians to helpthemselves.What do you think?Kaye FallickPublisher

RETIREMENT INSIGHTSWhat you told usYOURLifeChoices Retirement Attitudes Survey 2014*Do pre-retirees knowhow much the AgePension pays perfortnight?*Will the pensionchanges proposed inBudget 2014 changeyour retirement?*Are you confidentyour retirement savingsare sufficient for areasonable lifestyle?Of those who answered‘Yes’ 80% wereincorrect.How will it change?Why? Work longer 19% Try to increaseincome 12% Reduce householdcosts 68% Never earnedsufficient income tosave enough 38% Unexpectedeconomic hardship35%No 76% Yes 55% No 62%Is the Age Pensionsufficient to lead amodest lifestyle?No 60%“Retirement should mean relaxing and enjoyingthe final years, instead its worry about food, bills,hospitals and cash flow. If I wasn’t already greyI soon would be.”* YOURLifeChoices Retirement Attitudes Survey 2014 was conductedin June 2014, receiving 4303 responses to 19 questions.YOURLifeChoices Retirement Update June 20145

Government updateGovernment updateJUNE 2014The beginning of the new financial year sees somesignificant legislative changes, many resulting from theFederal Budget 2014/15. So how will you be affectedfrom 1 July 2014 onwards?Aged care reformsThe second round of the Living LongerLiving Better reforms which wereannounced on 20 April 2012 willcommence on 1 July 2014. These willinclude:· income testing arrangements for homecare packages· changed means testing in residentialaged care· new accommodation paymentarrangements for residential aged care· removal of the distinction between highand low care in residential care· expansion of the Australian Aged CareQuality AgencySee our article on page 18 for furtherdetail of what these changes mean.Fuel excise indexation*From 1 August 2014 the reintroductionof the indexation of fuel excise willcommence and is expected to costcar owners, on average, 40 cents perweek. The revenue raised is intendedto establish a more stable source ofCommonwealth road funding. You canfind out more at ATO.gov.au.Introduction of debt levy*The Temporary Budget Repair Levy willrun from 1 July 2014 to 30 June 2017 andbe payable by individuals who earn morethan 180,000 per annum. The two percent levy, will affect 400,000 taxpayers inthe 2014/15 financial year. Find out moreabout the progress of legislation atAPH.gov.au.Restart*A new wage subsidy, Restart, will beintroduced from 1 July 2014 to encouragebusinesses to employ those Australians,over 50 years of age, who have been onincome support for at least six months.Employers who hire mature-aged jobseekers on a full-time basis will receive asubsidy of 10,000 over 24 months, paidat incremental stages. You can find outmore about Restart at Budget.gov.au.*These measures were announced as part ofthe Federal Budget 2014/15 and are subjectto legislation.6YOURLifeChoices Retirement Update June 2014