Age Discrimination Adds Fuel to the Retirement Fire

Retirement and the pension have been the focal point of the federal budget ever since it was handed down by the coalition last month.

Disgruntled soon-to-be retirees have voiced their concerns saying the rise in retirement age to 70 will backfire without trying to eliminate workforce discrimination against older people.

Members Alliance CEO David Domingo says it’s now more important than ever to have a plan for retirement that doesn’t depend on employers or the government.
“The budget has sent shockwaves throughout Australia, effecting both the young and old, and it comes as a wake-up call that retirement is something you should be taking into your own hands,” says Mr Domingo.

“It’s no secret that employers are unwilling to hire older people and unfortunately, the value of an older worker is remarkably undermined.

“The older generation possess the qualities that run a great business; they understand the worth of a dollar, they’re punctual and enthusiastic and they have a lifetime of skill to offer – I say this because all too often we hear of Generation Y lacking the basic skills that make a valuable employee.”

While certain industries and occupations support the older workforce, according to Age Discrimination Commissioner Susan Ryan, 1 in 10 businesses admit to having a cut off age averaging around 50.

This combined with the Coalition’s decision to scrap the Mature Age Workers Tax Offset, which provided tax concessions of up to $500 for people over 55, has made it even harder for the older generation to find and secure employment.

Research from the Australian Human Rights commission shows one out of three unemployed people aged between 55 years and 64 years fell into the ‘long-term unemployed’ category in 2010-11.

Mr Domingo says soon-to-be retirees shouldn’t let the government determine how they will spend their golden years.

“The government’s blanket resolution of raising the retirement age to 70, when implemented, will increase the pressure on future retirees to build up assets to help protect their future standard of living,” says Mr Domingo.

“They can guard themselves against potential changes by securing their financial future through strategic planning and investment.

“The last thing we want is people reaching 60, realising they won’t be able to afford retirement and start to make irrational financial decisions that could see negative repercussions for years to come.”

Members Alliance specialise in providing tailored financial programs, derived from an analysis of your current financial position and identification of your financial goals.

If you want to start planning for retirement, call 1300 365 731 to find out how Members Alliance can help.

Master-planned Communities Provide Safe Investment Options

Residential property in master-planned communities is proving to be a safe investment option according to a leading financial services firm.

Members Alliance CEO David Domingo says the new communities are planned from the beginning and incorporate sought after amenities and sound management policies to benefit residents, resulting in them being highly desirable for the rental market.

“Master-planned communities are usually self-sufficient and incorporate some form of commercial development to provide shopping, dining and entertainment options, while ensuring a healthy and quality lifestyle through additional recreational facilities,” Mr Domingo says.

“These types of communities were first established in the United States, but areas such as South East Queensland helped pioneer them in Australia and they are now seen as the benchmark for all new developments.

“The investment advantages of owning a home in one of these planned communities is they will always be maintained and managed to a high level, which is exactly why they have become so popular.”

Other advantages include guaranteed quality, as all homes in a master-planned community must comply to strict building guidelines and covenants, meaning owners can be confident that the style and design of housing, including landscaping, will remain at a high standard throughout the estate.

Master-planning also improves the delivery of the community facilities, as with a good master-plan in place the future infrastructure needs of residents are already accounted for, meaning the community evolves within the plan, rather than trying to keep up with issues created by urban sprawl.

“Many master-planned communities incorporate sporting and lifestyle facilities such as walking trails and parks, swimming pools, tennis courts, and even golf courses, so when combined residents get to enjoy a wide array of facilities without the hassle of maintaining them,” Mr Domingo says.

“Due to the wide range of recreational facilities in a planned estate, a strong sense of community is often fostered as families gather at the park or at other communal areas.

“These types of close-knit communities have the added benefit of attracting a better quality tenant, should the property be rented.”

As a result of all of these benefits, property in master-planned communities typically outperforms the general market, with most residential property experts agreeing that these communities would provide an advantage over general residential property in an economic downturn.

“Indeed, the inherent value in master-planned communities makes buying a home there a better investment, which has been confirmed to us through an independent analysis of master-planned communities across southeast Queensland,” Mr Domingo says.

“In some cases, the average annual house price increase in the master-planned communities in the study was more than double that of the surrounding wider community.
“The research also found that the capital growth performance of master-planned communities with a body corporate structure has been even better.”

Investing in a master-planned community is financially more safe and secure, and this is why Members Alliance positions investment properties for clients in planned estates.
Rental tenants see houses in an estate as extremely desirable places to live, because they’re convenient to amenities and most have a wide range of quality recreational facilities.

This increases the rental return you can demand for your investment home and ensures your cash flow is maximised.

Contact Members Alliance for a complimentary initial consultation today.

Silver-hair Investors Leverage Surplus From Empty Nests

Australians over 55 have shown overwhelming interest in the property market and are eager to start investing the “dead” equity from their homes.

A high number of retirees and soon-to-be retirees are amongst investors who made a mark on the Australian property market in 2013 according to RP data released earlier this year.

These investors amongst other investor types were at their highest levels in December since late 2003 in regards to a proportion of all housing finance commitments.

Members Alliance CEO David Domingo says silver-hair investors are changing the face of the investment market by re-entering with ambitions of returns that other ‘asset classes’ can’t provide.

“The timeline of achievement has shortened with each generation; our parent’s generation had a goal to pay off their homes before retirement, but now baby boomers are chasing full ownership of a $1 million house whilst also wanting to refinance to leverage their equity long before retirement,” says Mr Domingo.

“These days more people are realising they have ‘dead’ equity in their homes, which explains the spike in activity from silver-hair investors.

“Well located and rentable homes are at the top of the over-55s investment wish list, but purchasing means and goals can and do vary.”

These investors are using their age to their advantage, with some investing with funds from their self-managed super fund.

The real estate industry has changed immensely since baby boomers bought their family homes, which is why most experts agree older investors should buy with clear objectives to avoid financial pitfalls, and as importantly seek reputable advice before buying.

Mr Domingo encourages retirees to think long-term with their investments by focusing on a clear mandate, which may include suburbs close to railway stations with established and ongoing demand and consistent population growth trends rather than properties promising super high yields today but questionable long-term rental demand tomorrow.

“It’s a question that all investors should ask, but especially the over-55s: Am I buying for a premium rental yield with higher risk or a long-term capital gain and a reasonable rental income?” says Mr Domingo.

“Reaching out for advice from finance and property experts can also help investors steer clear from other common mistakes like retiree investors only buying homes they would live in and most unfortunately ignoring what tenants expect.

“Tenants expectations have changed to renting property that is smaller in size, low maintenance and near amenities and public transport.

“In some cases, silver-hair investors are unaware of what a good investment property looks like today because it’s been so long since they went out looking for their own homes and most critically they are least versed in the proper mandate and criteria.”

Property Market Sees Influx of Young, Savvy Buyers

While the end of the first-home buyers grant was expected to dampen the market’s appetite for new property, it has in fact created a range of new and creative buying trends amongst younger Australians.

These trends include ‘property shares’, where multiple buyers – often friends or family members – acquire individual home loans for their share of a jointly owned property, and ‘guarantor’s support’, where the borrower’s parents offer their home as equity.

However the most widely used strategy has become borrowing to buy a first property and remaining as an investor rather than an owner-occupier.

Members Alliance CEO David Domingo says these creative strategies have made it possible for more first-home buyers to enter the property market than ever before.

“First-home buyers are now researching to find high growth suburbs and opting to buy rental apartments or houses while living at home or renting a different property,” says Mr Domingo.

“Trends are showing the preferred choice is new housing stock such as detached houses or inner-city apartments with affordability as a major factor.

“The simple fact is that Gen Y are preparing now for when they eventually move out of home, and it’s creating pent up demand for affordable, low-maintenance dwellings that fit this new criteria.”

The latest data from the Australian Bureau of Statistics (ABS) confirms first-home loans as a proportion of all owner-occupier finance commitments are at a record low.
Mr Domingo says an RP Data report of sales throughout 2013 show 39.4 per cent of capital city unit sales and 27.1 per cent of capital city house sales were below $400,000 – showing affordable opportunities for first-home buyers are still out there.

“There was unprecedented hype around Gen Y unable to enter the property market when the first-home buyers grant for established homes ended, but that has since died down with reports of young buyers now preferring to enter the property market as investors,” says Mr Domingo.

“2014 first-home buyer activity is growing with people aged between 25-35 who are now thinking creatively in terms of how they will enter the property market and buy their first property.

“It’s a matter of the buyer adapting to the ever-changing market and finding a way in that will benefit them financially in the long run, rather than buying a home to live in purely based on emotion.”

If you are planning on buying your first property, call us to find out how we can help.

Baby Boomers ‘Can’t Afford to Retire’

Fewer than 20 per cent of Australia’s baby boomers have adequate superannuation and private insurance cover to fund their health care in retirement, a new study finds.

The study by Fujitsu Consulting paints a bleak picture about the healthcare system’s ability to handle ageing baby boomers. It found nearly 60 per cent of the 6000 people surveyed did not have private health insurance and many did not know how they would pay for medical care in their old age.

Many thought they would get by in retirement with the help of government or inheritance, director Martin North said.

“There are about 5.6 million people between 45 and 65 years of age and less than a million of those have a secure future in terms of their superannuation and their health funding,” Mr North told ABC radio. “I think it’s pretty concerning for many baby boomers.”

Nearly 90 per cent of those surveyed were less confident today than they were a year ago about the outcome of their superannuation. “But also quite a few of them now recognise that superannuation isn’t going to provide them the financial platform that they need when they retire.”

Less than 50 per cent had private health insurance cover and fewer, it seemed, would have it in the future, Mr North said. “In terms of thinking about other sources of funding to fund old age including health, you know some said: ‘Well, we’ll probably rely on the state or potentially on family or indeed personal assets’.”

Nearly 20 per cent said they didn’t know where funding would come from.

A combination of factors was to blame for the bleak outlook, including the fact that 26 per cent of the population would retire during the next 20 years. “The traditional approaches to dealing with old age and health care, which is basically to try and support people … in their homes, but then move them into various institutions, just won’t work anymore,” Mr North said.

“And then, of course, you’ve got the ever-increasing costs of health care, and the fact that people are living longer and are, therefore, going to need more serious care for much longer. “None of that, I think, has been adequately addressed, and to be honest, the healthcare system is struggling, even today, to manage today’s issues let alone thinking 20 years ahead.”

Baby boomers were wanting to stay in their homes longer, rather than move into retirement homes, requiring a different attitude to in-community care and monitoring. There needed to be discussion about how people would be cared for in late old age, Mr North said. “Because the private health sector is going to be quite happy to provide further services for people who can pay, but what about the four million who can’t?”

How will you fund your retirement?

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