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Protecting Your Wealth

Protecting your wealth – Insurance in plain English

Written by on . Posted in Insurance. No Comments on Protecting your wealth – Insurance in plain English

Protecting Your Wealth

Everybody’s circumstances are different, but insurance is important for everybody. Your need for insurance will change as you move through the different stages of your life.There are many different types of insurance, and we can help you find the right level of protection for your needs.

What types of insurance are there?

There are many types of insurance.
Car or home/contents insurance allows you to insure your belongings. Personal insurance policies enable you to insure yourself and your ongoing wellbeing.
Personal insurance provides protection against sickness, injury and death, and includes:

  • Life insurance
  • Total and Permanent Disability (TPD) insurance
  • Trauma insurance, and
  • Income protection.

While insurance doesn’t remove the risk of something going wrong, it provides you and your family with protection and financial security if something does happen.
The amount of insurance you need is affected by:

  • how much you earn
  • your cost of living
  • your assets
  • your liabilities
  • your relationship status (whether you are married, in a de facto relationship or single), and how many dependants you have.

Life insurance

Life insurance protects your family by paying a lump sum if you die. Most people think that life insurance is only for the main income earner, but the person who takes care of the family is also a large contributor to the home and can be insured.

Life Insurance
Can be purchased inside or outside of superannuation Many super funds provide life insurance. Premiums can be paid from contributions made to your fund by your employer, by you personally or simply deducted from your account balance in the fund.
Tax treatment

Outside super

  • Premiums are generally
  • not tax deductible.
  • The benefit payment is tax free.
  • Broad range of potential beneficiaries.

Inside super

  • Premiums are tax deductible for the super fund.
  • The benefit payment may be taxed, depending on who receives it.
  • Limited range of potential beneficiaries.

Total and Permanent Disability insurance

TPD cover provides a lump sum payment if you suffer a disability before retirement and can’t work again, or can’t work in your usual occupation or chosen field of employment.

Total and Permanent Disability insurance
Can be purchased as an add on, or as a stand alone You can buy TPD as an add on to term life insurance, or as a stand alone product.
You can also get TPD as an extra benefit from your super fund or as part of a trauma insurance product.
Tax treatment

Outside super

  • Premiums are not tax deductible.
  • The benefit payment is tax free if paid to the injured person or their relative.

Inside super

  • Premiums are generally tax deductible for the super fund.
  • Superannuation contributions made to fund premiums may attract various tax concessions.
  • The benefit payment you receive may be taxed.

Trauma insurance

Trauma (or critical illness) insurance provides a cash lump sum if you suffer a specified illness or injury. Advances in medical treatment have increased the need for trauma insurance. The improved chance of survival means that although you are more likely to survive, you are also more likely to have substantial medical bills to pay.

Trauma Insurance
Stand alone policy or additional options Trauma insurance is usually purchased as a stand alone policy, but can be purchased with additional options, such as a TPD benefit.
Trauma insurance is generally not available through superannuation.
Cost Trauma cover is relatively more expensive than other forms of life insurance because of the greater probability of a trauma event occurring.
Tax treatment
  • Benefits are tax free.
  • There is no restriction on how you use the payments.

Income protection

Income protection insurance (also known as salary continuance or income replacement) provides a monthly payment to replace lost income if you are unable to work due to injury or sickness.

Income protection
Level of cover The maximum allowable cover is generally 75 per cent of your gross wage.
Benefit period The longer the benefit period, the higher the premium.
Can be purchased inside or outside of superannuation Income protection is available through your super fund or can be purchased as a stand alone policy outside of super.
Tax treatment
  • Premiums are generally tax deductible.
  • The payments received are considered income and are subject to tax.

 

Insurance as part of your superannuation

Life, TPD and income protection insurances are all offered within superannuation. If your insurance is held within superannuation, the cost of the premiums is withdrawn from your superannuation balance.
It is important to work out the best way to structure your insurance, whether inside or outside superannuation, or a combination of the two.

Benefits to having insurance in your superannuation may include:

  • automatic acceptance – there’s generally no need to complete medical checks
  • cheaper cover – from the bulk discount typically available to superannuation funds, and
  • tax deductibility – some contributions to superannuation attract a tax deduction, so you may be able to pay your premiums by making tax deductible super contributions.

Disadvantages of having insurance in your superannuation include:

  • limitations on the types of cover available
  • potential delays in the payment of benefits in the event of death, and
  • high tax rates – superannuation death benefits paid to a non-dependant may be taxed at up to 32 per cent.

Keep your insurance up to date

Insurance is not static, and your need for cover will change as you move through different stages in your life. As part of the financial advice process, we regularly review your insurances to make sure that you are adequately protected if your circumstances change.

 

Are your insurances up to date?

Or do you need to put something in place to better protect youself? To arrange an appointment to speak with one of our advisors call us on 02 9328 0876.

 

This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.

 

How Australians will use their tax return

Written by on . Posted in Money Management. No Comments on How Australians will use their tax return

This year more than 75% of Australians expect to receive a tax return, with a large portion of the population planning to use the money they receive to take the edge off their financial commitments.i

We look at the most common ways people intend on using their tax return and what other ways you could invest this money to get ahead.

How people intend on using their tax return

According to a finder.com.au survey of more than 2,000 Australians, the most common ways people said they’d use their tax return was towardsii:

Savings (31%)
Household bills (23%)
A holiday (12%)
Home loan repayments (10%)
Credit card debt (6%).

Other ways you could use your refund

Put it into super

Contributing a lump sum of money into your super is generally a good way to grow your retirement savings, as what your employer contributes mightn’t be enough for you to live comfortably in the years after you finish working.

Other benefits of contributing to super, depending on your circumstances, may include special tax treatment or other government incentives.

Also note-the value of your investment in super can go up and down, contribution caps do apply, and there are rules around when you can access this money.

Pay off your education debt

According to government estimates, the average debt for a tertiary student in Australia is currently $19,100, with the average time taken to clear that debt more than eight years.iii

For many, making a dent in their loan or paying it off in one fell swoop will be a great idea, but given the low-cost nature of Australia’s higher education loan program, maintaining compulsory student repayments while addressing other debts or financial goals could also be worth investigating.

Create an emergency fund

Given more than one in two people wouldn’t have enough savings to last three months if they lost their job tomorrowiv, an emergency fund can provide peace of mind when it comes to unexpected bills.

It can also reduce the need to rely on high interest borrowing options, such as credit cards or applying for payday loans, which can often be an expensive form of finance and create unwanted debt.

Invest elsewhere

Whether it’s property, managed funds, direct shares or term deposits, consider your situation, in particular the amount of time you have to invest and your attitude to risk.

If you’re young, you may have time to ride out market highs and lows, and therefore be willing to take on more risk in the hope of achieving higher returns.

On the other hand, if you’re a bit older, you may prefer a more conservative approach as market changes could be harder to recover from as you move toward or if you’re already in retirement.

 

 

If you’d like some advice on the best ways to use your tax return.

Why not book a coffee appointment to speak with one of our financial planners or alternatively call us on 02 9328 0876.

 

i, ii https://www.finder.eom.au/press-release-jul-2017-were-a-nation-o1-savers-at-tax-time-31-o1-aussies-will-save-tax-return
iii http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/ pubs/rp/rp1617/Quick_Guides/HELP
iv https://www.finder.eom.au/press-release-may-2017-10-million-aussies-couldnt-last-jobless

Article by – AMP Life Limited.

This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.

 

Delayed Gratification

Can delayed gratification help you with your finances?

Written by on . Posted in Financial Behaviour. No Comments on Can delayed gratification help you with your finances?

Delayed Gratification

The “marshmallow test”

Instant gratification was first explored about 40 years ago by psychologist, Walter Mischel, in what has become known as the ‘marshmallow test’. This experiment tested children’s ability, or inability, to curb their urge to have one marshmallow immediately (instant gratification) rather than wait and receive two marshmallows, as promised to them, at a later time (delayed gratification).ii

This test still seems relevant today, so it’s not surprising that many of us choose to eat our marshmallow now, rather than wait, and possibly get a bigger reward at a later date.

In today’s materialistic, throwaway society, we’ve been bombarded with messages convincing us that instant gratification makes us feel better. Combine that with the pace of modern life giving us easy access to credit and rapid changes in technology, instant gratification is tempting us all.

But while instant gratification might make us feel good for a while, it may not help us achieve our longer term goals.

Delayed gratification has its own rewards

Delayed gratification, by exercising self­control, allows you to resist the urge to have an instant reward now with the aim of a better reward down the track.iii

For example, you could give up your daily coffee and put the money aside to save for your next holiday, go without sugary treats to help you lose weight, or contribute to your super to help you save for a comfortable retirement.

And while exercising self-control isn’t easy, resisting temptation can have its own rewards, such as imagining how you can indulge yourself once you’ve finally achieved your goal!

How to use delayed gratification to help with your finances

The next time you want to impulse-buy online or at the checkout, pause and think about whether you really need to spend the money now. Divert your impluse and think about what you could do with the money instead.

Some ways you could use delayed gratification to help achieve your longer term goals:

  • Save up enough money before making a purchase to avoid credit card debt or a personal loan. When you do run up a debt, make sure you can afford to pay it off when the bill comes in or try
    to pay it off as soon as possible.
  • If you invest in a term deposit, don’t get tempted to take it out before the maturity date. Savour the wait so you don’t lose the interest you’ve earned.
  • If you’re saving up a deposit to buy property, try to save up for a bigger deposit so you’ll potentially borrow less in future. Of course, this may mean you are vulnerable to future market or price changes.
  • Reinvest any dividends you might get from your shares to increase your total number of shares-this could potentially give you greater returns in the longer term.

Take control of your future

Exercising delayed gratification can help you to take control of many aspects of your life, so why not start with your finances?

Whether your goal is to be debt-free, save enough to buy a property or to have a comfortable retirement, we can help you. Call us for professional advice on how to achieve your financial goals.

 

Need some help getting started?

Whether your goal is to be debt-free, save enough to buy a property or to have a comfortable retirement, we can help you. Call us for professional advice on how to achieve your financial goals on 02 9328 0876.

 

Article by © AMP Life Limited.

 

i https://www.apa.org/helpcenter/willpower-gratification.pdf
ii https://www.apa.org/helpcenter/willpower-gratification.pdf
iii https://www.psychologytoday.com/basics/self-control

 

This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.

 

Get on the Property Ladder

3 ways to get your feet on the property ladder

Written by on . Posted in Property. No Comments on 3 ways to get your feet on the property ladder

Get on the Property Ladder

So it can be tough to put together a deposit, especially when you’re starting out. It’s a far cry from back in your parents’ day, when it seemed to be easier to achieve the great Australian dream of owning a home.

But while it’s easy to focus on the downside, there are reasons to be cheerful. Interest rates today are at record lows, compared with the 17% that your parents might have been paying off as recently as 1990.ii And credit is more readily available, with more competition among lenders.

So getting approval for a loan might be easier. But you still need to put a deposit together and cover the repayments. Here are three more creative ways to get your foot on the property ladder.

1. Go in together

Buying a property with a bunch of mates or family can be a good way of pooling your resources.

  • You can save a deposit more quickly.
  • You can share up-front costs, like stamp duty.
  • You can borrow more and buy a better home.
  • You can avoid paying mortgage insurance, if you can raise a 20% deposit.

But you need to go into a co-ownership arrangement with your eyes wide open. Think about what would happen if one of you wants to sell up or can’t make a repayment. Watertight legal commitments can reduce the risks if things go pear-shaped.

  • Establish the right co-ownership structure—stipulating whether you are ‘joint tenants’ or ‘tenants in common’ can make a big difference down the track.
  • Set up a co-ownership agreement to cover all the potential financial pitfalls.
  • Make sure your will is in order so that if anything happens to you, your share in the property will go to the people you want it to.

2. Buy an investment property

Back in the day, an investment property was something you turned your mind to later in life once you were firmly established in your family home. But renting out an investment property is an increasingly attractive way for younger Australians to get into the housing market while continuing to live with their parents or renting somewhere else cheaper.

You’ll need to make the finances work.

  • If the income you receive from your investment property is greater than your loan repayments, interest and other costs, you’ll be receiving a regular boost to your cash flow.
  • If the income you receive from your investment property is less than your loan repayments, interest and other costs, you’ll be making a loss. That loss reduces your taxable income and, in turn, your tax bill. The higher the rate of tax you’re paying, the more tax you can save in deductions. This is what’s known as negative gearing and means your investment needs to gain enough in value during the time you hold it to offset the losses you make along the way. Negative gearing can be a risky strategy, particularly if your situation changes and you can’t service the debt as easily.

And you’ll need to do your homework.

  • Buy in the right area—somewhere with decent transport links and close to schools and amenities will attract tenants and future buyers for both rental income and capital growth.
  • Shop around for the best home loan – don’t be afraid to ask lenders for a better rate.
  • Get the right type of loan—think about which type of loan suits you. Choose between a fixed or variable interest rate—or a split between the two.

Make sure your will is in order so that if anything happens to you, your share in the property will go to the people you want it to.

3. Invest in indirect property

Bricks and mortar isn’t the only option. You can invest in commercial or residential property through your super or a managed fund to generate a regular income and potential capital growth without the hassle and expense of maintaining a home.

 

For more information on getting on the ladder…

It can really help to create a financial roadmap with the help of a professional. Why not call us to arrange an appointment on 02 9328 0876.

i: 2014 Demographia Housing Affordability Survey – www.macrobusiness.com.au/2014/01/2014-demographia-housing-affordability-survey
ii: Reserve Bank of Australia – www.rba.gov.au/statistics/cash-rate/cash-rate-1990-1996.html

General Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. Please seek personal financial advice prior to acting on this information.

 

Photo by Jessica Castro on Unsplash

Tax Tips

Five handy tax tips you should know

Written by Sydney Financial Planning on . Posted in Financial Strategies. No Comments on Five handy tax tips you should know

Tax Tips

 You’re probably well aware you can claim a tax deduction for general work-related expenses. But did you know you may be able to claim if:

  1. You take a course or study. You may be able to claim a portion of self-education expenses if it’s related to your ability to earn an income.
  2. You travel to inspect your investment property. You may be able to claim for expenses like pest control fees, body corporate, rates, utility bills, advertising and marketing costs. Be aware, from 1 July 2017 this opportunity will no longer be available.
  3. You belong to a union. You may be able to claim your union fees as a deduction.
  4. You wear a uniform for work. You may be able to claim for buying and cleaning a uniform that you need to wear for work.
  5. You work from home. You may be able to claim for running costs such as heating, cooling, lighting and cleaning, and even interest on any loans for work equipment, like a home computer. But you must keep detailed records—check out the ATO’s guide to home office expenses. 

Working out your tax deductions can be complex. Your tax accountant can help you work out what you can and cannot claim. 

Five ways to boost your super at tax time

There are plenty of ways to benefit from super’s favourable tax treatment, regardless of how much you earn and how old you are. 

  1. You can claim up to $500 in government co-contributions if you’re a low to middle income earner and you make after-tax contributions of up to $1,000 to your super.
  2.   You can receive a tax offset of up to $540 if your spouse is a low-income earner and you contribute up to $3,000 in after-tax contributions towards their super.
  3.   You can contribute up to $30,000 in before-tax contributions to your super at the ‘concessional’ tax rate of 15% (or 30% tax if you earn more than $300,000 pa in 2016-17) —or $35,000 if you’re aged 50 or over. It’s important to note that concessional contributions will be reduced to just $25,000 for everybody during the 2017-18 financial year regardless of your age.
  4. You can contribute up to $180,000 a year (or up to $540,000 before 1 July 2017 if you’re eligible to use the ‘bring-forward’ rules) in after-tax contributions. Since this is from your after-tax income the full contribution reaches your super account, and no tax is deducted when the contribution reaches your super fund.
  5.   You can start a transition to retirement strategy once you’ve reached your super preservation age (the age at which you can access your super)—this can allow you to draw up to 10% of your super as a pension. 

So, as the end of the financial year approaches, now is the time to ensure you are fully aware of all the tax deductions you can claim, as well as taking advantage of investing in super, before major changes take affect.

 

Still have some questions?

Contact us before June 30 so we can help with strategies to make your money work for you. Call us to arrange an appointment on 02 9328 0876.

 

General Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. Please seek personal financial advice prior to acting on this information.

Relief for NSW first home buyers

Relief for NSW first home buyers

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Relief for NSW first home buyers

First home buyers face many hurdles when entering the housing market with affordability being the number one barrier. The state government has responded to the astronomical house prices, lack of supply, and heavy competition from foreign investors by developing policies that aim to alleviate some of the burdens for first home buyers. The new policies were recently announced by Premier Gladys Berejiklian and will take effect from 1 July 2017. The package of policies will include grants and concessions, increased investment into housing supply and acceleration of the delivery of infrastructure to support growing communities.

Below is a breakdown of the package and perks for first home buyers:

  • Abolish stamp duty on all homes up to $650,000
  • Give stamp duty relief for homes up to $800,000
  • Provide a $10,000 grant for builders of new homes up to $750,000 and purchasers of new homes up to $600,000
  • Abolish insurance duty on lenders’ mortgage insurance
  • Ensure foreign investors pay higher duties (4%) and land taxes (2%)
  • Investors no longer allowed to defer stamp duty payments on off-the-plan purchases
  • $3b infrastructure funding to boost housing supply.

NSW will scrap stamp duty for first home buyers on new and existing homes up to $650,000 and a proportioned discount will be applied for homes up to $800,000. This could see first home buyers reap a five figure savings on stamp duty alone.

Those who choose to build a new property valued up to $750,000 along with anybody purchasing a new property worth up to $600,000 will be eligible for a $10,000 grant.

Insurance duty on lenders’ mortgage insurance (LMI) has been abolished.  Typically, banks and financial institutions will require you to have a 20% deposit in order to borrow money to purchase your home; however, LMI is an alternative option where lenders may allow you to borrow the same amount with a smaller deposit than would otherwise be required. Luckily for first home buyers, the insurance duty attached to LMI has been waived. 

To minimise competition from investors, the NSW government has doubled the stamp duty surcharge for off-shore investors from 2% to 4% and land tax has also increased from 0.75% to 2%. Furthermore, the concession to delay payment of stamp duty from 3 to 15 months after settlement on off-the-plan purchases is no longer available for investors, both domestic and international.

The NSW government also hopes to improve housing affordability by increasing housing supply, including the acceleration of rezoning and building infrastructure such as roads, schools and utilities that can facilitate development. 

Increasing housing supply is only possible if there is adequate infrastructure to service new homes and support communities. The NSW Government will inject $3 billion into infrastructure funding to accelerate the delivery of housing, ensuring that works which support housing are prioritised and in locations in alignment with government planning and housing demand.

 

You think you qualify? but have a few more questions…

If you are considering buying or moving, or to simply find out if you are eligible for the first home buyers concessions and exemptions. Contact us for advice on how to get started or have your current situation reviewed, call us on 02 9328 0876.

 

General Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. Please seek personal financial advice prior to acting on this information.

Career health check

Give your career a health check

Written by on . Posted in Career Strategies. No Comments on Give your career a health check

Career health check

If you answered ‘yes’ to the last question, it might be time to give your career a health check. We all know the benefits of having regular medical check-ups but, just like your body, your career needs a regular review to make sure you’re on track to meet your goals. 

Do a career health check

The average time Aussies spend in a job is about 3 years and 4 months (as at June 2014) so if you’ve been in your job for more than three years, now might be a good time to give your career a quick health check. 

But before you hit the search button on your favourite recruitment site, take time to work out what you really want to do – then you’ll have more chance of finding, or working towards, the job that will make you happy. 

Here are some tips for a career health check:

1.Take your pulse

List your top three work achievements over the last year. If you’re struggling to come up with any, think about where you want to be in five or ten years’ time. Will your current job get you there? 

2. Check your vital signs

List the top five reasons (in priority order) you’re in your current job. If you’re ranking your bonus and long-service leave higher than your job satisfaction, then things might be a little out of balance. It might be time to ask yourself whether you’re at the right place in your career. 

3. Take your own medicine

Think about how you could improve your career prospects:

  1. Refresh your personal brand – update your Linkedin profile, write a blog or upload articles which are relevant to your career. 
  2. Update your resume with your recent achievements. Make sure they match the type of work you’re looking for. 
  3. Do you need to study, get some training or update your skills? 
  4. Attend professional development events, workshops, seminars and conferences.
  5. Join professional associations to meet like-minded people in your industry. 
  6. Collaborate in online forums where you can show your expertise on a subject.

Should you stay or should you go?

It’s one of the hardest questions to answer. Can you achieve your career goals where you are or do you need to look for a fresh start somewhere else?

If you’ve built up a solid reputation at your current employer, consider applying for a different role at the same company to give you a new challenge.

Perhaps you want more life/work balance? If so, you could consider working part-time, as a consultant or doing freelance jobs.

But if you still feel as though you’re just going through the motions, it could be time to get on the front foot and take action. A career health check could help to keep you on track, reignite your spark and help you get (and keep) the job you’ve always wanted.

 

Does your career need a health check?

Whether your goal is to be debt-free, save enough to buy a property or to have a comfortable retirement, having the right income strategies can make a huge difference. Get in otuch to arrance to speak with one of our advisors on 02 9328 0876.

 

General Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. Please seek personal financial advice prior to acting on this information.

Most Trusted Advisor 2017

2017 Most Trusted Adviser

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Most Trusted Advisor 2017

For the fourth consecutive year, Beddoes Institute has recognised Sydney Financial Planning as a ‘Most Trusted Adviser’ (MTA) practice based on a survey of our clients, which put Sydney Financial Planning within the top 5% of advisers in Australia.  

An adviser earns the title of ‘Most Trusted Adviser’ when they have achieved the highest level of excellence in servicing their clients whereby they have achieved an adviser trust score of at least 80%.  MTA’s are qualified advisers with five or more years’ experience and are members of the Financial Planning Association of Australia and/or the Association of Financial Advisers.

Advisers with the MTA badge understand the importance of having a secure financial future and the challenges you face in finding an adviser you can trust. This is why Sydney Financial Planning submitted their practice to be independently assessed by Beddoes Institute. MTA’s have shown that they can transform the lives of their clients by helping them achieve their personal and financial goals.

You can be confident that we will deliver excellent results, not because of what we say, but because of what our clients say about us.

 

We’re motivated by helping our clients achieve thier dreams?

Speaking with a trusted professional can help create a right financial roadmap suited to you. Why not call us to arrange an appointment on 02 9328 0876.

 

General Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. Please seek personal financial advice prior to acting on this information.

Making the most of change

Ch-ch-changes

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Making the most of change

Recent super reforms, particularly the changes to non-concessional contributions (NCC’s), present a timely opportunity for you to capitalise on current superannuation laws before 30 June 2017.

The changes

From 1 July 2017 several key changes will come into play including but not limited to the following:

  • the NCC cap will be lowered from $180,000 to $100,000.
  • the bring forward amount will be reduced from $540,000 to $300,000.
  • individuals whose total super balance is above $1.6 million will no longer be eligible to make NCC’s. This may be particularly relevant for those who have a transition to retirement (TTR) arrangement.
  • the concessional contributions (before tax) cap will decrease to $25,000 per year for everyone.
  • the high income threshold will be lowered from $300,000 to $250,000. Anyone earning $250,000 or more will pay 30% tax on their contributions.

The opportunities 

Depending on your personal circumstances, you may be able to reap the maximum benefits available to you right now by making some adjustments to your financial plan. Here are a few effective strategies that that may or may not apply to you:

  • If you are turning 50 and over: you could contribute an extra $10,000 (before-tax) this financial year, before the cap is reduced to $25,000 from 1 July 2017.
  • If you are turning 49 or under: you could contribute an extra $5,000 (before-tax) this financial year, before the cap is reduced to $25,000 from 1 July 2017.
  • If you are under age 65: you could bring forward three years’ worth of after-tax super contributions up to a maximum of $540,000. This is significantly higher than the $300,000 limit that will apply from 1 July 2017.
  • Do you have a term deposit that you want to cash in? Have you made some money from the recent sale of your house or investment property? Maybe you’ve received an inheritance from a family member? It’s worth considering contributing these proceeds into your superannuation account before the 30 June deadline to make the most of the NCC caps.
  • If you are earning between $250,000 and $300,000 pa (inclusive of super contributions): you could seek to make the most of your concessional contributions this financial year (up to $30,000 or $35,000 depending on your age, without paying the additional 15% tax that will be imposed from 1 July 2017).

The benefits

What are the benefits of getting in early?

  • Greater accumulated superannuation balance to enjoy in retirement tax free.
  • One off opportunity to restructure existing assets to take advantage of the upcoming changes in legislation.
  • Boost your knowledge and understanding around superannuation.

We’ve covered some of the main points here but there are other changes that may also affect you. It’s likely you’ll have questions about the best course of action in the lead up to the changes and after they take effect. Now is a good time to contact us and set up a time to come in so we can look ahead and put plans in place to help you make the most of your money.

Important reminder

If you contribute more than the contribution caps, you may have to pay extra tax. Also, once your funds are invested in super, you need to meet a condition of release such as retirement and reaching preservation age, to get access to the funds. The value of your investment in super can go up and down. Before making extra contributions to your super, make sure you understand and are comfortable with any risks associated with your chosen investment option.

 

Still have some questions?

If you want to find out how these changes could impact you before making any financial decisions, arrange to speak with one of our advisors. Call us to arrange an appointment on 02 9328 0876.

 

General Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. Please seek personal financial advice prior to acting on this information.

Super Basics

Back to basics

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Super Basics

Effectively, Superannuation is a way to fund your retirement. It’s an investment vehicle and a means of saving for your future. Within your superannuation fund, you can have a portfolio of shares, property, cash and a variety of other investments. Superannuation is appealing because of its lenient tax treatment when you’re working (accumulation phase) as well as when you’ve hit retirement (pension phase).

The notion is backed by the government who have made it mandatory for all Australian employers to pay ‘super’ to their workers – this is what’s known as ‘super guarantee’.

There are many ways to build your super balance and the easiest way is through the super guarantee scheme.  For the current financial year (FY16/17), the general super guarantee percentage is 9.5% of normal earnings.

If your total salary is $70,000 inclusive of super than $6,073 (9.5%) of your salary will be contributed into your super fund leaving you with a net salary of $63,927.

In addition to the super guarantee concept, you can choose to make personal contributions. There are various ways to make personal contributions:

  • Salary sacrifice
    your employer pays part of your salary directly into your super fund instead of your bank account
  • Non concessional contributions (NCC)
    After-tax income that you deposit into your super fund
  • Spouse contributions
    Depositing money into your partners super fund may entitle you to a tax offset

One of the most common questions is ‘how much money will I need before I can retire?’

The answer is dependent upon the lifestyle you choose to lead, the age at which you retire, your outgoings, and income producing options i.e. working part-time in retirement etc.

 

Our experienced team of financial advisers can help you get your super sorted and put you on the right path to financial success. Reach out today by submitting a meeting request or call us to arrange an appointment for your preferred time and date on 02 9328 0876.

 

 

Is your super working well for you?

Our experienced team of financial advisers can help you get your super sorted and put you on the right path to financial success. To arrange an appointment call us on 02 9328 0876.

 

Wealth Building Tips

Wealth building tips x 4

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Wealth Building Tips

We all have to start somewhere right? Some people are trying to build wealth from ground zero, while others may have been gifted with a head start from the likes of an inheritance. Either way, the following four tips apply to everybody, regardless of where you currently are in your financial journey. 

1. Spend less than you earn

You will hear plenty of professionals, institutions and the press talking about ways to boost your investment returns. At the same time, there are always apparent experts warning you to stay away from the stock market, or suggesting that property is immune from risk. Ultimately, boosting your return and the art of timing the market are neither important – at least, when you’re starting out. Instead, you should focus on your money habits and spending less than you earn – no other factors will have a greater impact.   Sydney Financial Planning has written an entire blog on ways to spend less than you earn.

2. Get some structure. How is your money being invested?

‘Asset allocation’ is financial lingo for how your money is divided up between cash, fixed interest, shares and property. Years of research, wisdom and countless professionals suggest that 90% of the investment return an investor will receive is dependent on their asset allocation i.e. how much of your money is in shares, property or cash and fixed interest. Past performance suggests that shares and property have a higher rate of return than cash, term deposits and fixed interest. Obviously though, shares and property carry a higher risk. If time is on your side (at least 7 – 10 years) it might be worth restructuring your asset allocation – an investor who holds a higher allocation to shares and property should outperform an investor that has less allocation to shares and property. 

 3. Stick to your plan – Time in the market as opposed to timing the market

There will be times when you will want to steer away from the plan. For example, when the market is going well, people generally want to be more aggressive and more subdued when the market is down. Many investors give into temptations which are sometimes based on emotions as opposed to sound strategy and planning. The danger of acting on emotions is that often it leads to buying high and selling low, which if repeated will lead to failure. To avoid this, block out the media noise and stick to your plan. Don’t let the news of the day change your mind! 

4. The 8th Wonder of the World – Compound Interest 

Let’s assume you would like to be save a million dollars by age 65. Using a flat rate of 6% in the figures below, these are the monthly contributions you would need to make based on the age you start saving:
–         Age 25: $499.64 per month
–         Age 35: $990.55 per month
–         Age 45: $2,153.54 per month
–         Age 55: $6,071.69 per month   

The message is simple. The earlier you start, the easier it is to build wealth. Even small amounts that are regularly invested can transform into large sums over time. Be warned though; compound interest can also work against you when you have debt. It is amazing to see that over a 30 year mortgage term, you generally pay (depending on interest rates) up to 3 times the amount originally borrowed. By making extra repayments (however small), you can save significant amount of penny’s over time.

 

You love this concept, but have a few more questions?

We are always here to help guide you on your financial journey. Contact us for advice on how to get started or have your current wealth situation reviewed, call us on 02 9328 0876.

 

General Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. Please seek personal financial advice prior to acting on this information.

World Economy

What’s Really Going on in the World Economically

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World Economy

So what’s really happening in in the economy?

Global economic data was largely positive in August as the post-Brexit recovery continued. In the main, economic data showed signs of stabilising and surprising to the upside, pointing towards continued, gradual economic growth.

China‘s economic data was also better than expected in August, supporting the view that the economic growth has stabilised at about 7%. Industrial production, power consumption, retail sales, investment and growth in credit all notched higher.

In the UK, the Bank of England left monetary policy on hold while in Europe, the industrial production made a reasonable comeback from declines in July.

US economic data was soft as retail sales and industrial came in weaker than expected and small business confidence edged lower. However, the soft tone may well reduce the likelihood of a US rate rise, reducing some of the uncertainty deeply disliked by markets everywhere.

In Australia, business confidence was up although jobs data were mixed. However, Australia has a seldom-discussed positive in its corner. Amid global concerns of developed economies running out of monetary policy rope, the Reserve Bank has never resorted to quantitative easing, yet still, has 1.5% up its sleeve.

So in short, although there is constant volatility, things seem to be getting a little better around the world, and the share markets generally seem reasonably good value.

 

Still have some questions?

If you want to discuss your investment portfolio with one of our advisors. Call us to arrange an appointment on 02 9328 0876.

 

General Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. Please seek personal financial advice prior to acting on this information.

When in doubt - kick it out!

When in doubt…kick it out!

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When in doubt - kick it out!

Not just a soft kick either. Preferably boot it out as hard as you can. The method to his madness allowed you (and the team) to regroup, take time to set your formation and get ready to go again. Sure you might have lost possession and some ground but you’re not behind on the scoreboard and you’re still in the game. I often think of this in the context of investing. Just like soccer, investing is full of high emotion and decision making is too often clouded by stress.

When you’re investing in the share market and your portfolio drops 4% in one day, or 30% over one year it’s not uncommon to lose your head and start to question your investment game plan. Common sense might not always prevail and a knee jerk reaction can quickly follow.

The level headed question we need to be asking ourselves is, “is this recent correction a temporary setback or is there something more serious going on that requires a change in our game plan?” In times of nervousness and high emotion it’s often good to reflect and put things in context.

If we think about what’s happening with a clear mind, we could view a share price reduction as a great opportunity to accumulate more shares at attractive prices and for retirees this might highlight the importance of maintaining cash and other defensive assets in our investment portfolios to ensure we don’t have to sell and take a loss. The biggest challenge we all face in times of high emotion and stress is whether we have the presence of mind to see this not as a crisis but rather as an opportunity. Warren Buffet sums it up well by saying “be fearful when others are greedy and greedy when others are fearful”.

Coming back to my soccer coach again (who’s as equally wise as Warren Buffet), when share markets correct and it feels like the opposition is bearing down on us and we need to make a quick decision under stress, kick the ball out! Take a deep breath, rally the troops and get back on with the game plan. Easier said than done I know. That’s why we all need a coach or an adviser to remind us of the bigger picture. If you find yourself thinking, should I be doing something different and be changing my investments we encourage you to contact your adviser to regroup and talk about your investment game plan.

 

Are you ready to kick something out?

We are always here to help guide you on your financial journey. Contact us for advice on how to get started or have your current situation reviewed, call us on 02 9328 0876.

 

Article by Gary Winwood-Smith | Partner & Senior Financial Planner

 

General Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. Please seek personal financial advice prior to acting on this information.

Post Budget, what to do now

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Firstly, they have reduced the amount you can contribute into super for either a tax deduction or tax relief via salary sacrifice and employer contributions down to $25,000 p.a.  This comes into effect 1July 2017.

Secondly, they have reduced the amount of after tax funds you can contribute to super.  Until now you could contribute up to $180,000 p.a. and even pay 3 years in advance, i.e. pay $540,000 as a lump sum, and continue to do this up to age 74 if you were working.  A few years ago they even let you contribute up to $1,000,000. So that’s all behind us now, and from 3 May 2016 the maximum you can contribute is $500,000 over your life time.  The buggers are even going to count all contributions you have made since 1 July 2007.

Furthermore the most you can transfer to a tax free Super Pension is $1,600,000. This is aimed again to limit what people have done in the past to take advantage of the generous tax free status of the strategy.

So in plain English what does this mean for the average Australian?  In short you need to start early, and regularly put money into super.  No longer will people be able quickly pay off their  mortgage , then later in life when that’s paid off , start to top up super to catch up , and possibly tipping in large amounts from sale of assets or inheritances . Now it’s all changed.

What to do now?

Start Early!

The magic of compound interest means that contributions made in your 20s are 8-10 times more powerful than making the same contributions in your 50s and 60s. As an example if you start salary sacrificing $96 per week at age 25 (which will cost you much less due to the tax advantage of salary sacrifice) and stop at age 35, then you would have approximately an extra $787,000 in super at retirement. Whereas if the same person delays contributing to super until age 55 to 65, with the same salary sacrifice contributions, they would only have approximately $83,000 extra, a staggering $704,000 less.

Contribute smaller amounts but often

Simply put if you make modest salary sacrifice contributions early and not stop, you could be even better off than if you make larger contributions later on. It’s not rocket science, you need to go with a little less while you work, so when you retire you will have more.

Other Strategies

  • Make sure you include your spouse in super planning as remember you can have 2 times $1,600,000 in tax free super pensions, i.e. $3,200,000. These would produce an income of $192,000 p.a. tax free income in retirement if we assume a 6% investment return.
  • Take advantage of the tax effectiveness of a Transition to Retirement Strategy (in short available to people 56 and older) allowing them to pay less tax and retire with more in super.
  • If you are self-employed you may be eligible to take advantage of the Small Business CGT Retirement Exemption rule. This is where you can sell your business, and use the proceeds to offset any Capital Gains Tax, allowing you to contribute up to $1,355,000 to super. This is in addition to the life time $500,000 cap.
  • Review your investment strategy to ensure your investment is not just in a default fund. Make sure you have a Financial Planner actually guiding you, who does not work for a bank or a union super fund. That way your best interests are put before the bank’s or the union’s interests.

In closing there are many more strategies you can use to maximise your wealth; superannuation is just one of them, and in this article that’s all I’m focusing on. But in the real world it’s a great time to sit down and review what you’re doing both inside and outside super. After all, what most people want is a strategy to build wealth and minimise tax, while ensuring their family will be ok in the future.

 

Still have some questions?

If you want to discuss your impact of the budget and your financial future with one of our advisors. Call us to arrange an appointment on 02 9328 0876.

 

Article by Bill Bracey | Principal & Senior Financial Planner

General Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. Please seek personal financial advice prior to acting on this information.

Time the most valuable asset

You don’t pay me for my time

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Time the most valuable asset

One of his assistants explained the process to me step by step.

I was really grateful for that – I was getting a little freaked out, thinking about someone sticking sharp tools into my eye while I was watching.

I had to wait a little longer and then I was taken through to the surgery…

The doctor’s assistants and a nurse started preparing my eye – cleaning the skin around it, putting on the protective material, adjusting the lights and laying out all the tools.  I was laying there for about 20 minutes before the actual specialist came in.  He sat down next to me, looked into my eye and did a few tiny but precise moves with his tools.  Within a minute he was done and said, ‘There you go, all fixed.’  I thought, ‘wow, that was quick.’

As I was waiting to pay, there was a guy in front of me who’d had the same procedure.  ‘That’s $745, sir,’ said the secretary.

He shook his head and said, ‘Wow, that’s a hell of an hourly rate!’. The specialist overheard him. He came out of his office and walked over to the guy. He smiled and said, ‘You don’t pay me for my time.’ Then he turned around and went back to his office. He didn’t need to say anything else.

I was gobsmacked!  This guy was spot on!  I immediately thought of the work I do with my clients.

It’s not about billable hours, or the amount of time I spend in front of my client.  It’s all about the outcomes we can achieve together.  I create and build the fundamentals that lead to the life my clients want to live. The value of that can rarely be expressed in numbers. 

 

Still have some questions?

If you want to discuss how we can help you with financial advice. Call us to arrange an appointment on 02 9328 0876.

 

Article by Michal Bodi | Senior Financial Planner

Photo by Brooke Lark on Unsplash

 

General Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. Please seek personal financial advice prior to acting on this information.

 

Zen of a market crash

Zen of a market crash

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Zen of a market crash

The mainstream media loves a “crash”, but let’s think through what actually happens…

What I’d like you to get out of this blog post is to love market corrections … welcome them, see why they have to happen, how little they mean in the long run and how much advantage you have over them – if you only process them the right way.”

The difference between the mind of a victim and the mind of an opportunist

First of all, let’s start calling things by their real names.

A crash is something definite, irreversible. Planes crash … cars crash. Markets don’t crash… markets correct. Their permanent growth is randomly interrupted by temporary declines. (Please notice the use of the adjective temporary). These happen often for no apparent reason, we can’t predict exactly when they happen and why? And guess what?! We don’t have to.

Let me tell you a story…There is an old Zen parable that speaks of two monks; sitting on a hill, watching a flapping pennant in the wind.

The first monk says: ‘The pennant is moving, the wind is not moving’.

The other monk says: ‘No, it’s the wind that is moving, the pennant is not moving’.

A third monk happens to walk by and he overhears the conversation.  He turns his head and says to his friends: ‘The pennant is not moving…the wind is not moving. Your minds are moving….’

This parable precisely describes what happens during a market correction.

 

You see, what actually happens in the market itself is infinitely less important than the following two things: 

‘How surprised people get’ and ‘What they think is going on’.

And although the market correction is not predictable or controllable in any scientific way, these two things influence the way your ‘mind moves’ and are both totally predictable and controllable and I will argue also avoidable.

1. The element of surprise

It wasn’t that the market went down 50% between 2008 and 2009 that mattered.  What really mattered was how it surprised many… how unprepared and shocked many people were when it happened.

We, humans, love fairy tales.  When we experience good time, we want it to last.  Sometimes, we want it so badly, that soon, we start believing that it’s not going to stop.

When we look at the events prior to the GFC (or the Great Panic), a few years of consistent and smooth double digit returns in the market, we simply slipped into this state of a false comfort.  The minute you bought into this fiction of the ‘new era’ and you presumed that the market would only go up from that point onwards, there was no way you’d be ready for the market to come down 50%.

Of course, the market didn’t go down any more or less for you than it did for anybody else. The difference was – it caught you by surprise, which prevented you from dealing with it calmly, making sense of it all and having a ‘battle plan’ (which is largely a psychological battle plan) for waiting out the correction.

2. What do you think is going on?

It doesn’t matter how strong the wind is blowing and it doesn’t matter how much the pennant is flapping… What do YOU think is going on?

  • If you think it’s the end of the world, you’re going to panic and sell.
  • If you think, this time is different than the last correction and that it won’t go up again, you’re going to panic and sell again.
  • If you think the market will just keep ‘crashing’ down, or it will take a hundred years for it to recover, you’re going to panic and sell!
  • If you think that something so major happened in the economy that the market cycle has been repealed and the companies will stop making profits from now on, you’re going to panic and sell.

 

All this has nothing to do with the wind and it has nothing to do with the pennant…this is just ‘your mind moving’.

I think you might begin to understand by now, that rather than studying corrections, we should focus on how people process the idea of a correction (and from my perspective of a financial coach, how passionately they’re coached).

Simply because this is what’s going to make all the difference. These are all the behavioural variables and therefore are all variables under our control.

But you need to recognise it and your financial (investment) adviser needs to recognise it.

Otherwise, all will be lost.

 

 

Still have questions or concerns?

It can really help to seek the help of a professional to discuss the best investment strategies for you. Why not call us to arrange an appointment on 02 9328 0876.

 

Article by Michal Bodi | Senior Financial Planner

Photo by Brooke Lark on Unsplash

 

General Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. Please seek personal financial advice prior to acting on this information.

Self Managaged Super Funds

Super…should you do it yourself?

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Self Managaged Super Funds

 

So it’s expected that many of you would be very concerned with how your super is run.  Furthermore, an increasing number of us who want even more control over our super are transferring from larger funds into self-managed super funds (SMSF).

An SMSF has a maximum of four members and is primarily designed for business owners and their families.  However, SMSFs are not generally recommended as a cost-effective option if you have less than $250,000 of super assets.

 

Major advantages of SMSFs include: 

  • greater control over the structure of the fund and types of investments;
  • potential savings on management fees; and
  • the opportunity to make the best use of the tax environment.

Don’t be a slave to your super fund!

Despite its growing popularity, many only find out after starting one just how much time and work is involved in running an SMSF.  The penalties for not complying with SMSF regulations are severe.

Fortunately, there are SMSF services available that allow you to run your SMSF without having to perform all the time-consuming administrative activities.  For example, you can use a professional administration service, while having your own accountant look after some of the fund’s compliance and reporting, and have a real estate agent to manage your property in super.

Is it really necessary to have an SMSF super fund?

For most of us, probably not!  After many years advising clients and their SMSFs, direct property ownership is perhaps the significant motivator in deciding to have one; for example, if you have business property and wish to have it transferred to super, or you wish to invest in residential property via super.  There are many other reasons to have an SMSF, but the majority of us will in the end find out that a ‘normal’ super fund would be adequate in facilitating our retirement plans.

Managing your own superannuation fund can provide you with greater flexibility, greater control and a more cost-effective way to manage your investments in retirement.  But it’s not for everyone…  so make sure you consult an experienced financial planner before deciding on whether an SMSF would be right for you.

 

Still have some questions?

If you want to discuss your superannuation options with one of our advisors. Call us to arrange an appointment on 02 9328 0876.

 

General Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. Please seek personal financial advice prior to acting on this information.

Free Advice!

Here’s some free advice

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Free Advice!

“Put that in the bank and don’t touch it!”  “I heard that oil price is about to skyrocket, better buy some shares”  “Get a fixed rate loan and lock it in!”

Now you need to take a step back and look at where this advice is coming from.  Was it your neighbour, Bob the plumber? Or maybe your uncle Lewie, the doctor? Yes, Bob’s a straight up guy who knows a thing or two and you can always count on uncle Lewie for advice because, well he’s a doctor!

But where does their education around managing money come from? The answer is their friends, family and colleagues.

It’s true what people say – we really don’t know what we don’t know. We can never improve our lives, create a life balance, achieve happiness or gain a competitive advantage if we’re not open to new ideas and not prepared to do something different.

So what we find is generations of advice being handed down from people who have never been educated on how to properly manage money. The advice handed down is very often not the best solution for your particular situation, but without the proper guidance from somebody with the necessary training and expertise, you’ll never know any different. So in actual fact, it’s often the free advice that ends up costing you the most.

 

Looking for some advice?

It can really help to speak with a professional, so why not get in touch and arrange to meet with one of our advisors. To arrange an appointment call us on 02 9328 0876.

 

Article by Leigh Morris | Senior Financial Planner

General Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. Please seek personal financial advice prior to acting on this information.

 

Day One!

It all starts with a single step. All you need to do is start

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Day One!

How to stop procrastinating and start getting ahead

Why? Well, it’s got a lot to do with our personality, our ego, the fact that we’re so busy all the time and the actual process of admitting that what we’ve been doing is wrong. 

It can be especially difficult to change when we’re surrounded by same people with the same views as us. Why should I stand out?

Generations Y and Z…

Time is our most valuable asset and we’re all running out of it.For that very reason I would like to dedicate the next section to our sons and daughters, grandsons and granddaughters – the young people with still so much time on their hand.

When you’re young, it feels nice to have a first job, still live at home, spend the money on travelling and going out.

Let’s pause for a second and think about where you are at the moment

How much of your life have you already lived and how much you still have to live – a lifetime!!! What an opportunity…

What you may not fully realise day by day (because you just don’t) is that the time is on your side and you will never (ever) be in this position again. 

Use that competitive advantage! You don’t want to end up like the vast majority of adults – looking back in ten or more years’ time, realising what a massive opportunity you had… And you blew it!

What I’m talking about is the power of ‘doing’.

What can you do? You have two choices:

  1. Choice 1: Do nothing and spend every cent. This is what most of you will do. Just like everyone else (I thought you wanted to be different?)
  2. Choice 2: Start implementing tiny changes into your spending habits. Time is your best mate here. Time will do the rest, as long as you stay committed.

Remember, if you change nothing, nothing will change. The change doesn’t need to happen all at once. You can start with baby steps. 

One year later, you will definitely be in a better position than if you’d done nothing.

There are many ways to put money aside but here’s a fun example to start getting ahead – something that I call the reverse version of “The 52 week savings challenge”:

  1. You start with $52 that you put away in the first week – that is the biggest commitment you need to make. It gets easier from here.
  2. The next week it’s only $51. And as you continue, you decrease the money you put away, by a dollar every week, until you will end up with only a dollar contribution in the last week, a year later!

Over the course of the year, you will save exactly $1,378.

It’s a first step, it’s something. It can eventually give you that competitive advantage.

This can be used as a nice little deposit into an investment plan which can one day be converted into an investment property deposit. It will give you that competitive advantage.

It can be the difference between having to work every night to earn extra money for your ski trip compared to having a passive income to fund your travels so you can spend more time with your friends.

 

Is it One Day or Day One? all you need to do is start…

Do anything, just start…maybe it’s time to have an honest conversation about doing something about your future? Call us to arrange an appointment to speak with one of our advisors on 02 9328 0876.

 

General Advice Warning: 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 advice prior to acting on this information.
Investment Performance: 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.

Forgotten Fortune

Dig up your forgotten fortune

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Forgotten Fortune

That may be about to change with Google Earth technology that Tamworth man Jeff Harris and three mates are now using to cross-match with sketches in Lasseter’s original diary.

Like Mr Harris, we are all fascinated by the search for untold wealth. Hordes of us queued up recently to buy Oz Lotto tickets in a draw worth more than $100 million.

Yet Australians are sitting on a gold mine of unclaimed money well beyond the scale of anything Lasseter could have dreamed.

The amount of superannuation alone that is waiting to be claimed is a massive $17.4 billion. There’s also $330 million in forgotten or unclaimed bank accounts, $295 million in unclaimed shares and $52 million in unclaimed life insurance policies.

If you have ever moved house or changed jobs, you could be among millions of Australian workers and retirees with lost super. Forgetting to update address details with a fund or switching funds when they change jobs are the most common reasons why

Australians misplace their super

Some workers also fall victim to unscrupulous employers who make late super payments or don’t pay at all. If the law catches up with them, the late funds may be paid into accounts that have been closed and then the money is held by the Australian Taxation Office (ATO).

However, there are several mechanisms available to Australian workers to help them retain or regain funds that are rightfully theirs.

From 1 January 2012, super funds have used members’ tax file numbers to help consolidate their accounts, whether they are in the same fund or across multiple funds. Once accounts are located, members have the option of rolling their super into a single account.

The ATO operates a free online tool called SuperSeeker, which is a secure, convenient service to help you track your super. It can be found at www.ato.gov.au/superseeker.

Don’t forget that you may also be entitled to some of the $677 million unclaimed in shares, bank accounts and the investment portion of life insurance policies.

Check out www.moneysmart.gov.au, a website operated by the Australian Securities and Investments Commission that will help you discover if you are entitled to misplaced or forgotten investments.

You could be entitled if you have forgotten about an old bank account. Or, in the case of life insurance policies (particularly with Whole of Life Policies taken out in the 1980s and 1990s), you may have overlooked a lump sum amount payable at the time of death or after the policy holder reached a certain age.

Whole of Life policies are no longer available, but Australians who once bought them are sometimes entitled not just to the face value of the policy, but also the cash value made up of dividend earnings. These can be withdrawn at any time.

If only Lasseter had modern day tools like Google Earth back in the early 1900s, he may have been able to locate untold riches as easily as SuperSeeker and MoneySmart can help people recoup unclaimed wealth today.

 

Still have some questions?

Or you need help in locating and consolidating your super. Call us to arrange an appointment with one of our advisors on 02 9328 0876.