Nouveau Journal

Nouveau Journal

WEALTH MANAGEMENT

Nouveau

Nouveau Journal, Volume 5 Issue 4 –

Aged Care At Nouveau Wealth Management we are aware of the need to plan when it comes to aged care due to the significant change in population demographics as more baby boomers retire in the years ahead.

This newsletter will be providing some facts and figures around the Aged Care Market in Australia. We realise that many of you will have had some experience with families and Aged Care which can be a rather daunting task. We will highlight some interesting facts on why is this is becoming such a big issue in Australia and consequently its flow on effect to you and your families. In what can be stressful and emotive times for families dealing with this, there are many ways where we can help.

Aged Care Market• Over 1 million older Australians receive some form of aged

care and support each year and this is projected to grow to over 2.5 million over the next 40 years*

• There are around 169,000** residents living in residential care

• 58,172** people were admitted into residential aged care between 1 July 2010 and 30 June 2011

• Average length of stay is under three years**

• From July 2014 new entrants to Home Care packages will be income tested

Over the next five years, the number of Home Care Packages will increase by nearly 40,000 to around 100,000 packages across Australia

*Productivity Commission Inquiry Report, Caring for Older Australians, No. 53 28 June 2011.

**Australian Institute of Health and Welfare, Residential Aged Care in Australia:2010-11: A statistical overview

IN ThIs IssueAged Care _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 1

The Australian Share Market _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 4

Volume 5 Issue 4


Why demand for Aged Care is growing

Source: Productivity Commission Inquiry Report, Caring for Older Australians, No. 53 28 June 2011

Source: Productivity Commission Inquiry Report, Caring for Older Australians, No. 53 28 June 2011

People are living longer

Choices for the elderly Major concerns and decisions• The move to aged care is often rushed and a stressful time

• Some common concerns are: – Whether to keep or sell the family home

– What are the upfront costs and how to fund it

– What are the ongoing costs and ways to minimise fees

– Any impact on Centrelink or DVA benefits and how to maximise benefits

– How to manage cash flow requirements

– What will be left for the family

The Need for AdviceThere is a lot to consider when contemplating Aged Care, coupled with the fact it is often a very stressful and emotive time. We are able to assist you through this time, below is a snapshot of what needs to be considered and where we can assist.

What is the process of moving to Aged Care?

Step 1 - ACAT Assessment

• ACATs (Aged Care Assessment Teams) assess and approve older people for Australian Government subsidised aged care services

– Low level care – valid for 12 months

– High level care – does not expire

– Respite care – does not expire

– At home care packages

• ACATs can visit people in their home or in hospital and ask a series of questions to determine best care option

• They can also assist is finding a suitable facility

• Arrange through doctor, hospital or by calling 1800 200 422


Step 2 - Find a home - three levels of aged care Step 3 – Organise Finances – Aged Care Fees and Charges

CASE STUDYBetty moving to low level care

• Betty (88) has recently moved to a hostel

• She has $530K to invest after selling her home and paying bond of $350K

• Her Age Pension has reduced as a result of selling the home and she is paying an income tested fee

• Her family would like to explore options to improve her situation

• You compare investing $400,000 in a term deposit, insurance bond through a family trust and a Care Annuity

• $130,000 remains in a bank account

Case study assumptions: Term deposit paying 4.5% p.a., insurance bond paying before tax return of 4.5%, trust set up cost $1,000, bank account interest rate 3.5% p.a., CPI 2.5%, Challenger Care Annuity quote 22 February 2013, monthly payments, annual payments of $16,696, nil adviser upfront and ongoing adviser fee

The Australian Share MarketThe Australian market has risen strongly over the last 12 months although it still remains some distance off of the peak prior to the global financial crisis (GFC) although there have been some stocks which have reached all time highs (eg CBA, ANZ, Westpac, Flight Centre are a few).

Meanwhile resource stocks and retail stocks continue to lag with major companies such as BHP, Rio Tinto, Myer & David Jones all trading well below their previous highs established prior to the onset of the GFC.

As a result the overall market has produced varying results for investors with those heavily invested in banking stocks producing strong results whilst those invested in resource stocks producing much more modest gains. Whilst this has been a constant theme over the last 2 years it may not continue hence we advise clients to have a spread of investments within the Australian market.

The chart below shows the long term performance of the Australian Share market.

Whilst, there remains some risks to the global economic recovery (eg the end of quantitative easing) our overall view is still positive as we believe that the major economies are more likely to continue their recovery over the coming years. The major factors are the likely reduction in total US government debt which we believe is close to a peak, the recovery in the US manufacturing sector and the likely US self- sustaining energy supplies coupled with continued growth in China. It also appears as though conditions in the Eurozone have stabilised.

If this eventuates we will continue to see positive growth in the Australian share market and could also see much better returns from some of the more depressed areas of the market.Source : E-Trade

About The Writer of This NewsletterChris Air, Authorised Representative, has worked extensively in the financial services industry for over 26 years. This experience covers both stock markets, commodity markets & banking.

He also has studied to improve his knowledge of financial markets gaining significant financial markets qualifications through FINSIA (a well recognised financial services organization considered to be “Australasia’s premier membership organisation for financial services professionals”).

He has gained the following qualifications through FINSIA:

• Diploma of Applied Finance & Investment

• Graduate Diploma of Applied Finance & Investment

• Masters of Finance of Applied Finance & Investment:

and holds the following membership qualifications with FINSIA:

• Fellow


WEALTH MANAGEMENT

Nouveau

Sholim Holdings Pty Ltd trading as Nouveau Wealth Management

Corporate Authorised Representative of Charter Financial Planning Limited (ABN 35 002 976 294)

AFSL Licence 234665, Licensee address 750 Collins St Docklands 3008

This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial and tax advice prior to acting on this information.

The material contained in this document is based on information received in good faith from sources within the market, and on our understanding of legislation and government press releases at the date of publication, which

are believed to be reliable and accurate.

Opinions constitute our judgement at the time of issue and are subject to change. Neither the licensee or any of the AMP group of companies, nor their employees or directors give any warranty of accuracy, nor accept any responsibility for errors or omission in this document.

Past performance is not a reliable guide to future returns as future returns may differ from and be more or less volatile than past returns.

Before acquiring a financial product a person should obtain a Product Disclosure Statement (PDS) relating to that product and consider the contents of that PDS before making a decision about whether to acquire the product.

Level 30, Westpac House, 91 King William St, Adelaide SA 5000

Telephone (08) 8113 5351 Facsimile (08) 8113 5332

Mobile 0411 611 707E-mail:

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