Retirement Planning

A reduction in concessional contribution caps, the lowering of the Division 293 tax threshold, capping tax-free assets in retirement and a non-concessional contributions cap of $100,000 p.a. starting 1 July 2017 are just some of the changes that were in the Budget announcements this year to impact superannuation. These changes may impact your SMSF and retirement planning and require you to reassess your existing strategies or contemplate new ones.

Understand the major changes to superannuation and how they may affect you with this snapshot and easy to digest superannuation changes information guide.

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Retirement is a time for relaxing, seeing family and friends as well as enjoying your favourite pursuits. It should also be a time we all look forward to in life. Planning for retirement is something you should start thinking about quite early on in your career. The general guide is to start saving as early as your 20s in order to ensure you have enough money to live on and sustain the type of lifestyle you are aiming for later on. Retirement is a major change in your life and planning for your nest egg should be a high priority.

A common question is where could you invest throughout your working life in order to provide for retirement?

There are many different types of investments that may work for you which could be

 * Property investment

* Stocks and shares

* Super investment

* Managed funds

Get on top of your finances by finding out

* What assets (property, stocks, investments) you have and how much they are worth

* How much super you have and when you can access it

* What debts do you currently have and when will they be settled

* How much in savings you have and what the interest is

* When you can apply for the age pension and whether you are likely to be eligible

It is also important to consider how your needs might change over time. For example, retirement is a great time to pick up a new hobby or do some travelling. You may wish to redecorate your home or move to a different area. Planning for these possibilities will allow you to estimate the type of retirement income you are aiming for.

Not sure where to start? View our video on retirement savings and understand how long your retirement savings could last you:

For more information, talk to one of our friendly financial advisers at Anne Street Partners today on 135 444

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Take control of your super

 It can be hard to think about your Superannuation and long term financial goals when retirement can seem so long way away. Ask any person approaching 50 and they’ll agree that they should have paid more attention to their Superannuation earlier in life.  But, all is not lost. Making a few simple changes now, can make a dramatic difference to your lifestyle when you finally do hit retirement.

Start to get to know your super

 It is actually yours! But are you aware of its current balance?  Superannuation can be a very complicated topic and for many Australians it will represent the largest asset outside the family home.  For this reason alone, it makes sense to get to know what your current balance is, which funds you’re with, and the types of investments that you hold.  Consolidating multiple super funds is the easiest way to save on un-necessary fees and its something you can do right now.

Strategies for every stage in life

 You don’t need to be a millionaire.  Even though starting early will reap the biggest rewards, it’s never too late to build a better future, so if you haven’t paid a lot of attention to it – it’s not too late to start now.  Retirement will mean different things to different people.  A person in their twenties will have a different strategy to someone in their 40s.  But you’d be surprised to see how much difference a little involvement in your Superannuation could make towards your lifestyle when you retire – so the motto is be involved.

So you’re just starting out

 You hear it all the time – but although it’s probably one of the things that is further down your priority list, you can relax,  just  a small additional contribution now could mean a real boost to your Superannuation balance and lifestyle when you do retire.

Make sure you get an understanding of your entitlements too. You may be entitled to further boost your Superannuation through a Government Co-contribution.

With time for compound interest to do the work for you, even small contributions can grow (and grow…that’s the compounding part..!)

Think about taking a little more risk – you have the time and a high-growth investment strategy might be right for you.  Whilst this type of strategy may be riskier in the short term, with many years before retirement to ride out market fluctuations, it may prove to be a prudent choice.

Creating Wealth

 At this stage in your life you have started accumulating wealth through investments and may even have a family.  It can be hard to juggle all your financial commitments, although paying close attention to your Superannuation now may prove to be a wise decision as retirement is not actually that far away.  As time to retirement decreases, it may be worthwhile to review your investment strategy and take a more conservative approach – because you don’t want to risk losing what you’ve already gained.

 Retirement time

 You might have stopped working, but your Superannuation shouldn’t.  It makes sense to leave your money in Superannuation for as long as possible to maximise your retirement benefits.  Dependant on age, your Superannuation can start working for you as regular income or in lump sums.  With Superannuation changing constantly, it pays to keep up-to-date with what’s going on. The great thing is, at this point you have the time to take a firm interest in any changes that could affect you.

What about Self Managed Super Funds (SMSF)?

 Self managed super isn’t for everyone, but it can provide investment options and benefits far out of reach to most funds. Having a good financial adviser means you don’t need to be a genius to make SMSF work for you.

Firstly there is the control – the ability to take control of your own investment decisions is what drives most people towards an SMSF.

Through the control over investment choice, SMSF trustees have the ability to purchase investments that may have been restricted in their existing fund. This may range from direct shares or direct property all the way through to gold bullion or rare collections (which are known to have generated good returns). For business owners an SMSF may even own the business premises and lease these back to the business.

 There can be Tax Advantages – An SMSF allows personalised strategies to effectively manage tax. Some strategies include but are not limited to:

  • reducing contributions tax to zero,
  • reducing tax on investment income to zero, and
  • reducing tax on capital gains to zero.

These are not catered for in a retail or industry fund, as the trustee does not keep your personal situation in mind when making its decisions.

 Estate Planning – An SMSF has the ability to provide an effective estate planning vehicle which can retain wealth for future generations. An SMSF does not stop when you retire, nor does it necessarily stop upon a member’s death. In fact through the use of prudent trustee structures and investment strategies, an SMSF may continue almost indefinitely over multiple generations.

Personal Insurances – By placing personal insurances such as Life, TPD and Income Protection inside an SMSF, you may be able to free-up personal cash flow for alternative uses. Furthermore, an SMSF may be able to claim a tax deduction for policies that are otherwise not deductible in a personal situation.

What do I need to know before starting?

 In order to realise the benefits that come with managing your own Superannuation, you must also accept a level of responsibility. Your Financial Adviser, along with your fund Administrator/Accountant, can guide you through the requirements.  This responsibility mainly involves the realisation that:

  • You do not have direct access to the money in your Superannuation fund and it must be held within the trust until you can access it on the advice of your Financial Adviser or fund Administrator/Accountant.
  • The sole purpose of the Superannuation fund must be to provide for your retirement benefit. Generally, you cannot enjoy a benefit from the investment, and investments must be for commercial purposes.

Want to know more?

 Talk to us. The superannuation team at Anne Street Partners have the knowledge to help you with complicated superannuation topics every day. We can guide you along the way and assist you with setting up the right fund or reviewing what you have. We’re here to help.

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In this day and age financial planning is so important. But many of us instinctively opt for live for the moment philosophy. We often think of this as a dull subject, but planning your financial future need not be! By doing so you can do something exciting such as travelling or plan further and ensure you have a rewarding retirement.

Financial planning is a process, which essentially is about setting achievable goals. Taking a look at your own financial resources and looking at your financial needs. From here you can make a suitable financial plan. This plan will help you make wise decisions and help you save for those goals you have made. Our team have years of experience in helping people achieve their desired goals, no matter what your situation is.

This planning can have many benefits. It can help you make wise decisions, if done properly, preventing unwise decisions such as spending beyond your means. In the age of consumer credit it is so easy to get off track.

Financial planning has never been so important. With various things going on in your life, it is an invaluable tool at any age. There can be many objectives to financial planning, which can include: –

  • Getting out of Debt – Often this is one reason why people start financial planning. To access their financial situation to be able to fund actual cutting of debt. Often with a simple bit of planning it is possible to ease the burden.
  • Financing Higher Education – A vital moment in life,  saving for a child’s education. With the rising costs of education, this is an important objective.
  • Mortgages – Buying a home is another costly milestone. It is now getting harder to get a mortgage requiring larger deposits. But with some careful financial planning home ownership can still be a reality for many.

Of course there are other reasons for financial planning. You don’t have to wait to get into debt or face difficulties. The old saying prevention is better than cure could be applied too. Put some money aside for expected big purchases, maybe you are considering a major house repair in a few months time or wanting to take a holiday.

Not only can effective financial planning ease the burden but in the long run could save you money and enable you to plan for your retirement.

Financial planning can seem to daunting and you may not always be so sure that you are making the right decision if it is something you have never considered before.

By getting this assistance of a financial services company they can help you every step of the way. Giving you the right advice will help you make profitable decisions about your future.

For more information on financial planning to suit your needs, please give our team a call freephone 134 977 today!

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