Aged Care Who Cares

Almost a quarter of a century ago I launched my first book Making Money Made Simple which sold over two million copies worldwide, and changed the lives of many people who read it.

Then, the oldest baby boomer was just 41 and busy accumulating wealth.  Today the eldest baby boomer is celebrating their 65th birthday but their future is often not as they expected.  Instead of happily travelling the world they find themselves trying to replenish a diminished superannuation balance at the same time as caring for their aged parents who have lived long past their life expectancy. 

This is why this month I have been busy launching book number 20.  The title is Aged Care Who Cares and has been co-authored with Rachel Lane who is one of Australia’s foremost experts in this fast growing field.  I must say at the start that aged care is probably the most complex topic I have ever been involved with - it makes superannuation seems as simple as ABC.  There are a huge range of options and charges to think about and adopting one strategy over another can make a great difference to the cost. 

We don’t pretend the book will make you an expert on aged care but it will certainly help you to be aware of many of the traps that are lying in wait.  It also contains a 14 page comprehensive guide to most of the resources that are available.  These include retirement villages, aged care facilities, respite centres and home and community care. 

You can find more details at the special website that has been set up just for the book - http://www.agedcarewhocares.com.au – you can also buy copies of the book there. 

More Super Changes

Superannuation balances will get a boost now that Assistant Treasurer Shorten has followed through on his promise to raise employer contributions from 9% to 12%.  It won’t be popular with employers as it means more costs for them, and it won’t do much for older workers as it will take nine years to be fully implemented. 

Compulsory contributions will rise to 9.25% in the 2013/2014 year, and slowly increase until the full 12% will be paid in 2019/2020. 

There is also a move to make the employer contributions compulsory to age 75 in lieu of the present age 69.  This got a lot of publicity but the real impact will be very small.  Only a small number of people over 70 work now and most of these are in a position to make contributions by salary sacrifice which is already available to everybody up to age 75.  What they should have done was abolished the age limit of contributions entirely. 

It’s a wakeup call to those aged between 40 and 54 now - they will be hit with a double whammy. They will not qualify for the aged pension until age 67, yet won’t have time for the increased employer contributions to benefit them to the maximum. 

To make matters worse, it’s odds on that most of them will live to over 90.  This means they have to stay at work until 67, and while doing so, accumulate enough money to see them for more than twenty years. 

Warning - Motor Vehicle Dangers

Yesterday on ABC radio a woman rang in to tell of an experience that her parents had at a car park.  The couple had driven to the shopping centre and her father asked her mother to wait in the car while he dropped in to see the solicitor.  By mistake, he pressed the remote button on the car key that locked the car, and went on his merry way.  The mother was horrified to discover she was trapped in a hot car and had no way of getting out.  Once the car was locked all electricals including the horn and the radio were disabled and the doors and windows were jammed.  Fortunately for her he returned in a few minutes or she may have died of heat exhaustion. 

An RACQ spokesman came on and confirmed this was a major problem with most modern vehicles.  To test it out I asked my wife to lock me in our car when I returned home and I can verify the story is absolutely accurate. 

Most vehicles now relock their doors if they are remotely unlocked and the drivers door is not opened within a minute.  Years ago I took delivery of a new Holden Jackaroo and after pressing the key to unlock the door put the key on the back seat while I looked at the instruction manual.  To my horror the car locked itself the moment after I closed the rear door. 

And Finally

Writing a check separates a commitment from a conversation.
Warren Buffett

As an investor, as long as you understand something better than others, you have an edge.
George Soros

Investment is by nature not an exact science.
Benjamin Graham

Some drink deeply from the river of knowledge. Others only gargle.
Woody Allen

Real knowledge is to know the extent of one’s ignorance.
Confucius

If you can’t explain it simply, you don’t understand it well enough.
Albert Einstein

Risk comes from not knowing what you’re doing.
Warren Buffett