Firm News

Transition to retirement

Posted on November 24, 2020 by admin

The transition to retirement (TTR) strategy allows you to access some of your super while you continue to work. You are able to use the TTR strategy if you are aged 55 to 60. You can use it to supplement your income if you reduce your work hours or boost your super and save on tax while you keep working full time. Starting a TTR pension: To start your TTR pension, transfer some of your super to an account-based pension. You have to keep some money in your super account so that you can continue to receive your employer’s compulsory contributions as well as any voluntary contributions you may be making. Government benefits and TTR: The benefits you or your partner receive might be impacted if you choose to opt for this strategy. How and what exactly will change might become clearer upon discussing this with a Financial Information Service (FIS) officer. Life insurance and TTR: In some cases, the life insurance cover you have with your super may stop or reduce if you start a TTR pension – check this before making any decisions or changes. TTR can help ease your mind as you transition into retirement but it […]

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Superfund categories and what they mean

Posted on November 18, 2020 by admin

There are four different categories of super funds. These have different primary features and are more applicable to certain people than they are to others. Retail super funds Anyone can join retail funds. They are mostly run by banks and investment companies: Allow for a wide range of investment options. Financial advisors may recommend this type of fund as they receive commissions or might get paid fees for them. Although they usually range from medium to high cost, there may be low-cost alternatives. The companies that own these funds will aim to keep some of the profit they yield Industry super funds Anyone can join bigger industry funds, but smaller ones may only be open to people in certain industries i.e. health. Most are accumulation funds but some older ones may have defined benefit members Range from low to medium cost Not-for-profit, so all profits are put back into the fund Public sector super funds Only available for government employees Employers contribute more than the 9.5% minimum Modest range of investment choices Newer members are usually in an accumulation fund, but many of the long-term members have defined benefits Low fees Profits are put back into the fund Corporate super […]

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What is an annuity?

Posted on November 11, 2020 by admin

An annuity provides guaranteed income for a number of years, or for the rest of your life. It is also known as a lifetime or fixed-term pension. You can buy an annuity from a super fund or life insurance company. You are able to choose whether you want the payments to last for a fixed number of years, your life expectancy, or the rest of your life. In order to buy an annuity through your super fund, you must be in the ‘preservation age’ which is between 55 and 60. Additionally. You are required to meet a condition of release e.g. permanently retiring. You are also able to buy an annuity in joint names using savings. Through this method, you can split income for tax purposes. If either you or your partner dies, then the survivor has ownership and access to the funds. On the other hand, buying an annuity using a super lump sum can only be in the name of the owner. When you buy the annuity, you decide the payment amount you will receive. This can increase each year by a fixed percentage or indexed with inflation. Further, you can also choose if you are paid monthly, […]

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Super scams: What to look out for

Posted on November 5, 2020 by admin

The market for super funds is extremely competitive.Scammers take advantage of this by promising unrealistic benefits to acquire personal or account details. They are able to use this information to steal your identity or transfer your super to an account they can access. Scammers can approach you in various ways. You could receive a phone call, email or be contacted online. This is what you should be weary of: Advertisements promoting early access to super Offers to ‘take control’ of your super Offers to invest your super in property Offers of quick and easy ways to access or ‘unlock’ super The best way to spot a scam is to know what the rules about your super fund are. Knowing when you can legally access your super will protect you from false promises. Additionally, the ASIC website lets you check if someone is licensed, if they are not licensed, more likely than not, they should not be trusted. If you believe that you’re being targeted by a scam, then rather than simply ignoring approaches and not engaging, you should report the scam. You can do this by calling the ATO or completing the online complaint form on the ASIC website.

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First home super saver scheme

Posted on October 29, 2020 by admin

The first home super saver (FHSS) allows individuals to save up for their first home in their super fund. The money saved in the super fund is taxed concessionally and therefore, individuals are able to save faster. Individuals can make voluntary concessional (before-tax) or voluntary non-concessional (after-tax) contributions into their super fund. They can then apply for those contributions to be released. This also releases any earnings associated with those contributions. This scheme can only be used by a first home buyer if both of the following apply: They are living in the premises they are buying/intend to buy (when practicable) Intend to live in the property for at least 6 months within the first 12 months (when practicable to move in) The eligibility criteria to participate in FHSS is as follows: Make super contributions from any age BUT only request a determination or release of amounts after 18 years of age Never have owned a property in Australia (includes investment property, vacant land, commercial property, lease of land in Australia, company title interest in land in Australia) other than if there has been financial hardship as deemed by the Commissioner of Taxation. No previous request to the Commissioner to […]

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Consolidating your super

Posted on October 21, 2020 by admin

Consolidating your super can save you time and money. Consolidating your super means that rather than having multiple different accounts, all your super is in one account. Why you should consolidate your super: Choosing to consolidate your super means that you will no longer be paying fees to multiple super funds. There is also less paperwork to complete each time You will be able to track your super more easily Before you consolidate your super: Consider how changing super funds affects employer contributions: Certain employers may contribute more to one fund than another. In which case, you should consider switching to the fund that your employer is most compatible with. Consider how changing super funds impacts insurance you have through the fund: Changing funds might mean you no longer receive benefits of the insurance. Double checking the details of this is particularly important if you have a pre-existing medical condition or you are aged 60 or over. Inform your employer of any change in details they may need, to pay to your chosen super account. Don’t simply choose the account with the highest balance. Rather, take into consideration the performance of that super fund, the fees you are required to […]

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What property investors need to look out for

Posted on October 14, 2020 by admin

All investments have an aspect of risk and property investment is no different. How comfortable you are with the risk is generally an indication of your financial situation, age and expertise. There are a few common areas that pose risks to properties that investors should be aware of before entering into the market. Market risk Like other forms of investing, there is the danger of the market crashing or seeing a significant turn. By investing solely in property, you run the risk of lack of diversification, meaning if the market were to shift, so would your investments. You can slightly combat this by purchasing properties in different states all over Australia, but if the wider property market crashes this is unlikely to relieve risk. Lack of liquidity Liquidity is how accessible your money within the investment is. Real estate investment lacks liquidity, meaning an investor needs to be thinking for the long term. From this is the possibility that an investor may be unable to buy or sell an investment quickly when they wish due to limited opportunities. Liquidity risk in Australian property can be lessened through investing in capital city suburbs with high demand and limited supply. Tenants and […]

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Choosing a super funds

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Choosing a super fund requires taking multiple things into consideration. Such as its performance, the fees you will be required to pay, details of the insurance, and different investment options that are available. Performance Performance is one of the most important things to consider when choosing a super fund. Take a look at how the super has been performing over the years. Compare how one super compared to others, but remember to compare within categories. Low fees All funds will charge a fee – this could be amount or percentage or even both. Checking to make sure that you aren’t paying excessively high fees when there are lower cost options is integral. Fees will usually be charged at the end of every month, or actions such as switching investments. Insurance Super funds will have three different types of insurance for members: Life (or death cover), total and permanent disability (TPD), income protection. When selecting a super, you should check the premium rates, the amount of cover and any exclusions or definitions that might affect you in the future. Investment options Funds will provide you with a range of options as to how you would like to conduct investment. Such as: […]

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Insurance for your super

Posted on October 6, 2020 by admin

Most super funds offer insurance as part of their super plan. It is important to be aware of what types of insurance you are covered by through your super fund to help you determine if you need extra cover outside your super and if you have adequate support in the event that you cannot work. There are three types of insurance that can be available through super funds: Life insurance (also known as death cover): This is the most common of all personal super insurances and is part of the benefits your beneficiaries will receive when you die. Life insurance is typically applied to your super account by default. It is not compulsory with your super, however, if you have a self-managed super fund (SMSF), then you are required to consider insurance as part of your investment strategy. Total and permanent disability (TPD) cover: This insurance pays a lump sum if you become permanently disabled and are unable to work again, protecting you against the risk that your retirement income is cut unexpectedly short. TPD cover is often automatically joined with life insurance as a default cover. Income protection (IP) cover: This pays you an income stream for a period […]

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What is Salary Sacrificing for Super

Posted on October 1, 2020 by admin

One of the most effective ways to add to your super balance is through salary sacrifice. Salary sacrifice involves the employee agreeing to exchange a portion of their salary (before tax) for an increase in superannuation contribution by their employer. Contributions made through salary sacrifice are classified as employer contributions, not employee contributions. These are taxed at a maximum of 15% (if you earn under $250,000 per year) which is lower than the marginal tax rate most employees are charged. The amount that you ‘sacrifice’ cannot be assessed for taxation purposes i.e. it is not subject to PAYG. Employees should ensure that their contributions per year are not above $25,000 as this is the cap on concessional contributions and if surpassed, will require additional tax to be paid. Salary sacrifice is an effective way to minimise tax liability and increase super contributions if individuals are earning a greater amount than they require for annual expenses. After beginning the salary sacrificing process, employees should keep a look out for two important matters. First, the calculation of ordinary time earnings by your employer that super applies to, does not change. Second, the amount which is paid to your super through the salary […]

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