Beware of The Emerging Dangers

Sadly, the conflict in the Middle East continues to drag on, bringing turmoil to international trade, dislocating supply chains and causing fuel prices around the world to soar to unprecedented record levels.

Higher fuel costs effectively make everything we buy more expensive as increased transport costs get factored into everything from construction costs to fresh groceries and all retail items.

As you’ll read, inflation is now expected to jump to almost 5 per cent within the next few months and while this will impact all Australians, those in or near retirement will be particularly hard hit.

If you are relying on a full or partial age pension you will benefit from it being linked to the CPI index and will be increased in line with inflation every half year. If you are self-funded in retirement you will need to be more pro-active. An inflation rate of 5 per cent is estimated to halve your buying power every 14 years.

This should draw everyone’s attention to cutting back on expenses and nowhere is this more important than for those Australians over age 65, who are needlessly paying 15 per cent tax on their savings.

All up savings that can avoid this tax are estimated to have topped out at $326 billion with the owners of those savings collectively paying $2 billion a year more in tax than they should.

In line with this anyone with a self-managed super fund should also be reviewing whether it is still worth keeping given all the extra costs. If you’re thinking of closing it down, act sooner rather than later to have it closed before June 30 and avoid another year of costs.

Meanwhile you might remember my book, The No-Regrets Guide to Retirement. If you don’t have a copy or perhaps have misplaced your original copy, just respond to this email with your mailing address and we will send you a new copy.

Now with my second book, The Bank of Mum and Dad, about to be published this year, I am optimistic the business will continue to build on its past successes. In fact, if you would like a pre-release e-chapter from this book, again just reply to this email.

If you know of anyone who is unsure how to best arrange their finances as they move into retirement, please encourage them to contact me.

It could be a lifesaving, if not retirement saving, moment for them.

0427 429 817

Patricia@howardosmond.com.au