Banks Fund Retirement Plan

Let’s face it. Not many of us are born with a silver spoon in our mouths. If you have dreams, especially dream home dreams, or dream investment dreams, you are going to need to get the money from somewhere to fund that dream.

The people who fund such dreams are lending institutions such as banks, building societies and other financial sources.

Don’t misunderstand our sentiment for even a little bit. Even if you have the cash for your dream home most of us will choose to hang onto the cash and take out some form of mortgage.

This is especially true in an investment situation as the tax man offers great incentives to investors, which are not available unless there is a debt over the property. What this means is that this way you can have your cake and eat it too! How could it get any better than that?

It is the perfect match to help you achieve your retirement goals. In many cases you have the opportunity to increase your retirement fund many, many times over. All with the astute investment in property.

Find Your Mentor

When you decide to use property investment as your vehicle to great wealth, or even if you are seeking a vehicle to hold your wealth, Fountain Property Group have all the answers wrapped up with a nice little bow on top.

We do all the leg work, fossicking around amongst the properties listed for sale, to find that diamond in the rough.

It may be shining for the world to see but only an astute investment professional, such as we, can uncover a property’s true value.

By leg work, we mean due diligence. There are many factors to consider when assessing a property for its exact potential.

Location to infrastructure, demographics, rental yield, quality, and supply of tenants who could be attracted, and maintenance expectations are just a few of the aspects we consider when breaking down the elements of a particular property.

Once we have run through our calculations again and again and are completely satisfied, only then, will we release our findings to our clients.

Remember the Bow on Top

To assist investors, small and large alike, we offer the services of our brokerage associate Grand Capital Finance Group to ensure we find the best possible financing solution for you and your circumstances.

No stone is left unturned, even in this area, to ensure our clients’ complete and total satisfaction.

Building Your Own Retirement Fund

For some, the luxury of relying on employer funded superannuation is just not an option.

As employer funded superannuation only came into existence in 1992 there are many people staring down the barrel of retirement with roughly 20 years’ contributions to their funds.

This style of retirement planning can be a great advantage if you are 20 and just starting work but this may not be so for the older generation.

Don’t despair, there is an answer.

Low Tax Rate of Just 15%

More and more Australians are tuning in to the huge advantages such as a low tax rate of just 15% that building a healthy retirement fund through what is called a Self-Managed Super Fund (SMSF) can offer.

The trick is to know and understand what you can and cannot do within the fund and what is expected of you.

The truth is that this style of wealth building is not a ‘set and forget’ business. It will require a strong hands on approach and diligent care for it to be a success.

Fountain Property Group are your one stop property investment portfolio professionals. We possess a team of experts in the finance, legal and accounting fields and we understand the residential property market like no other.

This wealth of experience puts us in the front seat to be able to offer sound property advice and source the best of the best from the market.

Having said this, we would like to ensure that you are fully aware of the traps and pitfalls of such an investment scheme.

Six Common Misconceptions of an SMSF

1. First and foremost, it is absolutely imperative you understand the costs involved with this form of investment. Start-up costs are usually around the $2,000 mark and will require annual auditing to remain compliant. Annual costs will run between $500 and $1,000 per annum.

2. Due to the high cost of initial set up it is beneficial to start with a minimum of $200,000 to ensure the continued success and growth strategy.

3. There are more hoops to jump through when borrowing through an SMSF fund and you will be required to supply a personal guarantee to pay any debts incurred by your SMSF

4. Usually there is a ceiling to how much banks will finance any SMSF purchases. This will generally range between 65% and 80% of the total cost.

5. You cannot renovate property purchased through this style of fund. It is therefore necessary for it to be “tenant ready”.

6. Property purchased in this way cannot be used personally or even rented to family members.

AU Homes Reaches $1 Million Mark

Australian home prices have reached the $1 million mark, according to the Finder website.

Mortgages below $500,000 will have to spend $1 million for a 30 year loan at a variable interest rate of 5.5%. Purchasing property with a small deposit may cause people to spend more than the value increase in a 30 year span, which is why it is advised to look into how much you spend in the long term, apart from being able to afford the loan.

Sydney still leads all capital cities in median house price at $825,000 according to a recent RP Data CoreLogic report.

Read more about this on the Australian Property Investor website.

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Retirement Is A Global Crisis

Just when Australians are bracing for the baby boomer generation to retire, the whole world is sharing these sentiments. In order for people to live a comfortable life in retirement, they may need to work past the retirement age.

These brewing problems are effects of the Recession and the 2008 Financial Meltdown. It is forecasted that it will take decades before the effects die down.

Countries are raising the retirement age and decreasing benefits to stay afloat after these events. Pension plans have also been eliminated, which removed the guaranteed monthly retirement checks. Individuals who were unprepared for these catastrophes also lost a lot of their money once the financial crisis hit.

Early retirement will be a distant memory, as the incoming generation will have to fend for themselves. One worker was able to encapsulate the solution with these words: We have to prepare for our own futures rather than depending on our children.

Read more about this on the Cairns Post website.

Who Wants To Retire At 70?

A new late-retirement plan from the Australian government is proposing drastic changes for retirees. Part of the proposal is to move the retirement age to 70, as post World War II baby boomers hit the retirement age within the next several years.

The Productivity Commission is leading the charge in this initiative. The current retirement scheme charges taxpayers around $150 billion in welfare and health care. The argument states that a normal citizen cannot afford to pay for 35 years in retirement with their pension, and that a 5 year addition to the working age is still appropriate, where those 5 years can save taxpayers as much as $78,000 in pension for every retiree.

This new proposal is sure to raise eyebrows especially for individuals expecting to retire by the age of 65. It has already been forecasted that by 2023, the pension age will increase to 67 years. Pensioners will have to wait an additional 5 years in 2024 to access their super, increasing from 55 to 60 years.

Read more about this on the News.com.au website.

Age Pension Problems Starting to Surface

Age pension is in danger of becoming unaffordable for retirees. The current age pension is 30% of the average salary of male individuals, short of what is needed to support retirees for 20 years or longer.

The complexities of current cost and regulations for in-home services are a major problem, with daily fees for accommodation as a growing concern, according to Wealth management firm Centric Wealth. If people are not educated on the current costs and rules of age pension, this can negatively impact families and pensioners.

This can be addressed by proper education from professionals, since new legislation regarding age pension has taken effect since July of this year. Better understanding of the policies will ensure that care for the elderly will not be compromised, and that they will get to enjoy the life they deserve after retirement.

Read more about this on the Money Management website.

Advisers Be on Guard: Baby Boomers Set to Retire

Baby boomers are set to retire in the next several years, where the first baby boomers retired in 2011. Expectations are set to grow further as retirees have been constantly increasing, from 40,000 in 1950 to 140,000 in 2010.

Financial Advisers are facing the daunting task of accommodating retirees from this generation, according to professional service KPMG partner Bernard Salt. Several sectors will be experiencing an increase in services, such as aged care and disabled care. Financial advisers should align and step up their services with the needs of this generation, as these people have more time on their hands, most likely financially educated and will demand quality service from their advisers.

Read more about this on the Financial Standard website.

The Age-Old Retirement Question: How Much Do I Need?

This has been the lingering question for retirees – how much do I need on my super to retire comfortably? Do I have to rely on aged pension?

A study by Deloitte gives us an overview of how much retirees from the different generation group will get from their super upon retirement. According to the research, in order for a retired Australian to live a sufficient lifestyle, current male retirees need a total of $330,000 in superannuation to support themselves at $22,654 annually. For female retirees the numbers are slightly higher at $360,000. Living a comfortable lifestyle requires almost double those values, $590,000 and $660,000 for men and women respectively.

For Generation X, the numbers are promising. A 30 year old working on the annual average income of $60,000, the study forecasts that they will retire with $1.1 million in superannuation funds.

Read more about this on the Property Observer website.

The Age-Old Retirement Question: How Much Do I Need?

This has been the lingering question for retirees – how much do I need on my super to retire comfortably? Do I have to rely on aged pension?

A study by Deloitte gives us an overview of how much retirees from the different generation group will get from their super upon retirement. According to the research, in order for a retired Australian to live a sufficient lifestyle, current male retirees need a total of $330,000 in superannuation to support themselves at $22,654 annually. For female retirees the numbers are slightly higher at $360,000. Living a comfortable lifestyle requires almost double those values, $590,000 and $660,000 for men and women respectively.

For Generation X, the numbers are promising. A 30 year old working on the annual average income of $60,000, the study forecasts that they will retire with $1.1 million in superannuation funds.

Read more about this on the Property Observer website.