Archive for the ‘Distances Existence’ Category

Are you over 30? You need to read this…

Monday, August 21st, 2017

Superannuation is, and will continue to be, a hot topic in the financial advice industry. No matter what your age, once you begin your working life superannuation should be in the back of your mind, but MoneyTalk magazine have uncovered some confronting statistics that it’s worth thinking about if you’re around the age of 30.

If you’re 30 years old today, you have 35 years left in the workforce and need to save enough superannuation to fund you for 35 years of retirement. Now, many of you may be thinking – ‘Hold on a minute, I don’t need to save for that many years!’ well, with the ever increasing medical improvements you just might. The median age of death is increasing by 0.6 years every year, and currently sits at age 84. If this rate continues, by the time today’s 65 year old’s reach their mid 80’s, life expectancy could have been bumped up to around 94 years old!

If you’re in your 30’s or 40’s today, it’s not unlikely that you could need to fund your retirement until the age of 100 – an intimidating prospect for many. If you’re going to live to 100, and only work until you’re 65 it is estimated that you’ll need a nest egg of $3,000,000 – but how are you going to achieve this?

1. Review your superannuation fund now

When reviewing your superannuation fund, take a detailed look at the investment returns and any fees to be paid. Take special notice of tax being deducted from your account before payment needs to be made, this can equate to thousands of dollars’ worth of lost investment returns over the years.

2. Consider making extra contributions

The younger you start contributing extra funds to your superannuation account, the better off you will be. However, there are strict limitations of how much money you can contribute to your fund, and in what capacity you can contribute- familiarise yourself with these rules so as to avoid any mistakes.

3. Build up non-superannuation investments

Think about bettering your financial situation as a whole, rather than focusing solely on your superannuation. Think of how best to build your investments outside of your superannuation, with a view to eventually transferring them into your super in the most tax efficient way. You Financial Adviser can help you to plan this out.

4. Consider gearing

Borrowing to invest money is not suitable for everyone, be sure to speak to you Financial Adviser if you are considering this as an option to boost your superannuation. If done correctly, gearing can be used both inside and outside superannuation.

No matter what your current age, you must consider and plan for your financial future – invest your time as well as your money into superannuation planning.

Source: Money Matters Magazine, December 2016.

An article by Infocus Securities

Protecting Your Family Through Your Super

Monday, January 9th, 2017

protecting-your-family-through-your-super_1

If you are looking for a way to protect your family without breaking the budget, life insurance through super could be a good place to start.

When you’re already inundated with bills and expenses, taking out life insurance might seem like an unnecessary luxury. But there is a way you may be able to give your family vital protection, without dipping into the household budget, and that’s by taking advantage of insurance through superannuation.

If you’re an employee, you probably have some automatic death and total and permanent disability (TPD) cover in your superannuation already.

The benefit of this arrangement, is that it allows you to use your pre-tax income (e.g. your employer’s Superannuation Guarantee contributions) to pay your premiums. It’s also easy, as your insurance premiums can just be deducted from your super, rather than having to come out of your household budget.

The problem with having this automatic protection is that it can lull people into a false sense of security. The insurance that is provided by employers, is generally a minimum level of cover based on your age and/or income. It doesn’t take into account things like your debts levels and dependents – which are two of the main reasons this cover is required.

Do you need to increase your level of cover?

If you have a mortgage and/or dependent children, you may need to increase your level of death and TPD cover in super to clear your debts ,and provide an adequate level of ongoing income for your family.

There are also types of insurance that generally are not available in super, or may not be provided automatically, so relying solely on cover inside super could mean you’re missing out on the important protection those policies provide.

Trauma insurance is one type of cover not generally available inside super. It is designed to pay you a benefit, if you are diagnosed with a serious illness like cancer – with the money often used to pay out-of-pocket medical expenses, and possibly help a spouse take time off work to provide care.

Income protection is another common example. This is a type of policy that typically replaces up to 75% of your income if you can’t work due to sickness or injury. And while some employers offer income protection (or ‘group salary continuance’ insurance) to their employees in super, it often isn’t provided automatically.

Know where you stand

With something as important as your family’s lifestyle at stake, you need to be aware of exactly what you are covered for – taking into account any life insurance policies you already hold inside or outside super.

Most importantly, you need to think about how your insurance would be used if you became seriously ill, or were unable to provide for your family. That includes ensuring your benefit can be passed on to your family in the most tax-effective way.

To find out if you could be using your super to protect your family more cost-effectively, speak to us. It’s easy, as your first meeting with Michael is absolutely free.

Give yourself more flexibility in the lead up to retirement

Thursday, November 10th, 2016

take-control-your-retirement

Nowadays, we’re living for years longer than ever before. 60 is no longer old age! So it makes sense that you want the flexibility to approach retirement in a way that suits you. A transition to retirement strategy enables you to access part of your super while you are still working and has a number of benefits.

Boost your super and supplement your income

There are two main benefits of a transition to retirement strategy:

Maximising your super – You can continue to work while drawing an income from an account-based pension. By doing this you can salary sacrifice as much of your pre-tax salary to super as possible while receiving an income from your pension. This allows you to increase your retirement savings without reducing your income. This can also be extremely tax-effective because pension payments are generally taxed at a lower rate than your salary.

Supplementing your income – If you want to move into part-time work before you retire but don’t want your income to drop you can use your pension to supplement your salary.

Ease yourself into retirement

You can choose different transition to retirement strategies depending on what is most important to you. If you believe you have enough retirement savings you could still benefit from a transition to retirement strategy. For example, if you wanted to renovate your home before retirement you could keep working full-time and use the extra income from your transition to retirement pension to pay for the work. That way you get your home improvements done before retirement without taking on any debt.

Are you eligible?

You can take advantage of a transition to retirement strategy if you meet the following conditions:

You are aged between 56 and 65 years of age
You are still working
You transfer some, or all, of your super account to a transition to retirement pension

Important considerations for high income earners

It you earn a high income it’s important to consider the concessional contributions cap before deciding to salary sacrifice as part of a transition to retirement strategy. If you exceed the concessional contributions cap, which is currently $35,000 for the 2015-2016 financial year, you may be taxed an extra 31.5% tax on any contributions above the cap.

Set it up right from the start

Transition to retirement strategies can provide significant tax savings and benefits, but they can be complicated. For this reason we strongly recommend that you talk to us in the lead up to retirement, so that the strategy you put in place is right for your personal situation. Come in and have a free, no obligation initial chat, and then take it from there. 

Protecting Your Family Through Your Super

Wednesday, November 2nd, 2016

shutterstock_96964106

When you’re already inundated with bills and expenses, taking out life insurance might seem like an unnecessary luxury. But there is a way you may be able to give your family vital protection without dipping into the household budget, and that’s by taking advantage of insurance through superannuation.

If you’re an employee, you probably have some automatic death and total and permanent disability (TPD) cover in your superannuation already.

The benefit of this arrangement is that it allows you to use your pre-tax income (e.g. your employer’s Superannuation Guarantee contributions) to pay your premiums. It’s also easy, as your insurance premiums can just be deducted from your super, rather than having to come out of your household budget.

The problem with having this automatic protection is that it can lull people into a false sense of security. The insurance that is provided by employers is generally a minimum level of cover based on your age and/or income. It doesn’t take into account things like your debts levels and dependents – which are two of the main reasons this cover is required.

Do you need to increase your level of cover?

If you have a mortgage and/or dependent children, you may need to increase your level of death and TPD cover in super to clear your debts and provide an adequate level of ongoing income for your family.

There are also types of insurance that generally are not available in super, or may not be provided automatically, so relying solely on cover inside super could mean you’re missing out on the important protection those policies provide.

Trauma insurance is one type of cover not generally available inside super. It is designed to pay you a benefit if you are diagnosed with a serious illness like cancer – with the money often used to pay out-of-pocket medical expenses and possibly help a spouse take time off work to provide care.

Income protection is another common example. This is a type of policy that typically replaces up to 75% of your income if you can’t work due to sickness or injury. And while some employers offer income protection (or ‘group salary continuance’ insurance) to their employees in super, it often isn’t provided automatically.

Know where you stand

With something as important as your family’s lifestyle at stake, you need to be aware of exactly what you are covered for – taking into account any life insurance policies you already hold inside or outside super.

Most importantly, you need to think about how your insurance would be used if you became seriously ill or were unable to provide for your family. That includes ensuring your benefit can be passed on to your family in the most tax-effective way.

To find out if you could be using your super to protect your family more cost-effectively, speak to us. We would love to have the opportunity to assist more people to achieve their financial goals, have peace of mind and still maintain the Lifestyle they enjoy along the way. Come in and have a cup of coffee with Michael and see how he can best assist you – no cost at all for your initial meeting.