advice -re retirment

[active74]

Hi, I was looking for some advice for my mum.
she owns and lives in a aprox $900K house (paid off).
she owns a $330K investment unit-$10K owing with about $5K personal debt.
she is 66 and has only about $10K super.
what would be the best option regarding retirment?
I dont think she would be entitled to a pension.
any help would be appreciated.

thanks
kevin

 

[coastymike]

See a financial advisor. Any financial advice given by someone other than an authorised representative of a licensed dealer is in breach of the Financial Services Reform Act. Any authorised representative cannot give this information out online as you have not been provided with a Statement of Advice and Financial Services Guide. Sorry Kevin its the law now.

Anyone giving such advice could the be reported to ASIC.

 

[bawley]

With more than $1million assets your Mum certainly has options. I would imagine a much more generous income than the pension could be structured utilising her equity

Perhaps a good place to start learning may be to search and study Steve Navra's posts re structure and the "cashbond" strategy.

 

[Sunfish]

You can see the dilemma that confronts us "amateur" advisers. There are two critical facts not given;

What is wrong with her current situation?
What do you want to change?

I know many "old" ladies who are as happy as a rat with a gold tooth living on the pension, JUST AS LONG AS THEY OWN THEIR OWN HOUSE.

If you want meaningful advice in an open forum you must be prepaired to be open with the forum.

Your call!

 

[active74]

I am just saying that she no longer wants to work, but cant afford to stop working because of debt.
a correction also- she has $40K not $10 in super.

 

[WillG]

See a financial advisor. Any financial advice given by someone other than an authorised representative of a licensed dealer is in breach of the Financial Services Reform Act. Any authorised representative cannot give this information out online as you have not been provided with a Statement of Advice and Financial Services Guide. Sorry Kevin its the law now.

Anyone giving such advice could the be reported to ASIC.

Hi Coastymike,

Do you have a link to the 'Financial Services Reform Act' ?. Does it apply to product specific advice or advice in general ?

 

[quiggles]

WillG,

You have to be really really careful on this one. so much is considered financial advice that I reckon we skate edges of the black letter law (although probably not its intent) all the time in here.

The point is that these restrictions are for the benefit of folks like active74's mum. She shoudl see an advisor who will take into account what she wants.

Perhpas a better question from active74 might be to find who knows a good retirement benefits advisor in his mum's area.

 

[ren-A]

I agree a financial planner would be best. If it was me in that situation, then somethings I would consider include using super to wipe out the debt and live off the investment property - at 5% yield it'd be $16,500 per annum - probably enough to get by on. As the super might have tax advantages (eg rollover into allocated pension), I might have to think of something else.

Also I might look at reverse mortgages, bearing in mind that this reduces the capital in my home that would get passed onto my children.

But certainly I wouldn't do anything without getting a Certified Financial Planner to do the numbers first.

 

[coastymike]

Will,

Advice is classified as a recommendation; a statement of opinion or a report that is intended to influence a person making a decision in relation to a particular financial product OR would reasonably be regarded as being intended to have such an influence. So one needs to be very careful otherwise they are classified as providing advice and under the FSRA.

In relation to any advice you may seek or receive, for example, financial intermediaries must be specially licensed or authorised and be able to demonstrate the requisite experience and qualifications. In providing advice to you, advisors must provide you with three types of documents :-

1. First you should get a written statement called a Financial Services Guide (FSG), setting out the terms and basis of their services.

2. If the adviser then provides you with advice specific to your needs you must receive a written Statement of Advice (SOA) setting out the basis of that advice as well as the amount and source of any comissions or other remuneration they received from product providers.

3. Third your adviser or the product providers, such as insurance companies, funds managers and banks must give you a product discloure statement (PDS) before selling any product.

Regarding the acts they can be downloaded from www.comlaw.gov.au

The acts you are interested in are :

Financial Services Reform Act 2001
Financial Services Reform (Consequential Provisions) Act 2001
Financial Services Reform (Consequental Provisions) Act 2002
Financial Services Reform Amendment Act 2003

If you do actually read these then you have way too much time on your hands and should find a much better hobby like drinking (it will give you the same effect - make you totally numb. but a much more enjoyable way of achieving the same effect)

 

[Glebe]

Guys,

These financial advice laws relate to advice in Australia. We are in America, at least that's where the servers are located

 

[quiggles]

In fact one reason why we get away with a lot of this is because we don't discuss 'securities'. The definition exlcudes real estate, although what is more secure than that, I couldn't say.

 

[Kristine..]

Hi Keven

You don't have your State listed but if you are in Victoria Garry K is a Financial Planner / Adviser and so if Rolf Schaefer. You can find both these gentlemen in the Members listing - click in the top Menu bar.

You may be very surprised how much people can earn and still be entitled to a pension and the pension fringe benefits.

It will be worth your Mum spending a couple of hundred dollars and getting professional advice regarding investment income, Centrelink benefits and other matters.

Alternatively, she could ask her Accountant or Solicitor for a referral. It is always good to get a couple of opinions, every adviser has their own personal preferences, too, and she will be working with them for years yet to come!

Regards

Kristine

 

[saskatoon]

active74,
your mum can make an appointment with a Financial Information Service officer at Centrelink at no charge to receive information about pension entitlements and what she can do to qualify. This can be done as well as paying for advice from qualified professionals.

 

[NigelW]

Hi Coastymike,

Do you have a link to the 'Financial Services Reform Act' ?. Does it apply to product specific advice or advice in general ?

It's actually the Corporations Act. See Chapter 7 on providing financial services in relation to financial products...

Cheers
N.