![Government to limit lost super losses]()
by Jodie | Sep 14, 2015 | Finances, Retirement, Superannuation, Taxation, Wealth
The Federal Government is introducing legislation to prevent fee erosion of lost super accounts with balances under $6,000 stating that they are committed to “ensuring that Australians have adequate retirement savings.”
Assistant Treasurer, Mr Josh Frydenberg has said that the amendment would increase the threshold at which funds would be transferred to the Australian Tax Office (ATO) as unclaimed super funds, from $2,000 currently to $6,000 over the coming 16 months.
For smaller funds, it’s often the case that fees, charges and insurance premiums exceed the investment returns. It’s a problem for lost super, as often the members are unaware that they have the accounts and could easily end up losing money earmarked for retirement. Transferring lost super accounts with low balances to the ATO can help protect these accounts from fee erosion, and preserve value until they can be reunited with the members.
The trouble is, if the member had established the fund for the express purpose of funding insurance premiums for death, total disablement or income protection, this valuable cover can be lost on transfer, meaning the client loses their insurance protection but maintains a small superannuation balance. Hardly the desired outcome in the event of the need to claim – and also highlighting the need to stay on top of our super funds and in touch with our providers!
Currently, lost member accounts with a balance under $2,000 must be transferred from fund managers to the ATO as unclaimed super.
The new Bill is set to increase the $2,000 balance in two separate phases. Firstly to $4,000 from 31 December, 2015 and then to $6,000 from 30 December, 2016.
Time to do a check on your funds to make sure you’ve rounded up all those smaller accounts!
If you think you may have lost Super, click here to run a no cost search: SuperSeeker
![Government to limit lost super losses]()
by Jodie | Sep 2, 2015 | Insurance & Protection, Women
#equalfuture
You might be shocked to know that the average super account balance for women when they retire is $90,000 less than the average for men, and 90% of women will retire with inadequate savings to fund a ‘comfortable’ lifestyle.1
These alarming statistics are a stark reality for many women today across Australia. That’s why Amanda Cassar from local financial planning practice, Wealth Planning Partners, is on a mission to improve the financial fate of all Gold Coast women by providing better access to financial education and advice.
Amanda says, “a major contributor to this issue is ‘super baby debt’, where taking time off work to have a family means women can miss out on up to $50,000 in their super2. When not at work, employer contributions may stop. Even with part-time work, employers are only obligated to contribute to super if you earn over $450 a month.”
“Other contributing factors to women not building a reasonable amount of retirement savings include: lack of parity in take-home pay compared with their male equivalent, running a single-parent household after divorce and inability to be the primary care-giver and work full-time.”
So what can women do to close this alarming retirement savings gap?
Amanda suggests the following three strategies that almost every woman can use to boost their super savings.
- If you have a spouse, consider asking them to make a ‘spouse contribution’ into your super account
If you are in a relationship and live with that person on a ‘genuine domestic basis’, and have an assessable income of less than $13,800 for the financial year, then your spouse can make a non-concessional (after-tax) contribution on your behalf and claim a maximum tax offset of up to $540 if your spouse contributes $3,000 or more into your super fund.
Please note: eligibility criteria apply. See the Australian Taxation Office (ATO) website for further details.
Spouse definition: A spouse includes a person (same or different sex) who, although not legally married to you, lives with you on a genuine domestic basis as your husband or wife. It generally does not include a person to whom you are married but who lives separately and apart from you on a permanent basis.3
- You may be eligible for a Government co-contribution
Another option to help you ‘catch-up’ on your super savings is to take advantage of the Government co-contribution scheme. You may have decided to return to work part-time after the kids were born, or alternatively return to work full-time. Either way, if you make a non-concessional (after-tax) contribution to your super fund, and earn less than $50,454 a year (for 2015/2016), the Government may make a co-contribution entitlement of up to $500 if you satisfy the requirements.
Amanda outlines three simple steps to make an eligible Government co-contribution payment:
- Assuming you earn less than $50,454 (‘total annual income’) for the 2015/2016 year, simply make a non-concessional contribution (i.e. from your ‘after-tax’ bank account) to your super fund account. Contact your super fund for their EFT or BPAY® contribution details.
- Then, lodge your 2015/2016 tax return.
- Within 60 days, the Government then pays the co-contribution into your super fund.
- Maximise concessional cap limits while you work
Regular super contributions beyond those your employer makes can rapidly increase your final retirement savings. One of the most tax-effective ways is to make contributions ‘before tax’ via your employer with a salary sacrifice arrangement. Limits apply to the total amount in before-tax dollars you may contribute to super (including your Superannuation Guarantee contributions made by your employer). Please see below for the limits that apply in this 2015/2016 financial year.
- $30,000 contribution limit applies to those aged under 50 as at the end of the financial year
- $35,000 contribution limit applies to those aged 50 or over at the end of the financial year
Need more information?
For more information on super strategies tailored for women and how to achieve greater financial security, please contact Amanda Cassar from Gold Coast financial planning practice, Wealth Planning Partners, on 07 5593 0855 or email amanda@wealthplanningpartners.com.au
The Association of Superannuation Funds of Australia (ASFA), 2015.
2 The Association of Superannuation Funds of Australia, 2012: ‘How the ‘super baby debt’ eats away at a woman’s nest egg.
3 Source: Australian Taxation Office at ato.gov.au
® Registered to BPAY Pty Ltd ABN 69 079 137 518.
* Amanda Cassar is an Authorised Representative of Financial Services Partners, Australian Financial Services Licence 237590. This information is current as at July 2015, does not consider your personal circumstances and is general advice only. You should not act on the information provided without first obtaining professional financial advice specific to your circumstances. This article contains information from sources believed to be accurate at the time of writing. This information may be or may become inaccurate. You should seek your own timely financial advice on the contents of this editorial and not rely on this as advice from the provider.
by Jodie | Sep 1, 2015 | Finances, Money
Most of us have heard of the expression ‘healthy, wealthy and wise.’ It shows to me the inextricable link between our health, fitness and mood, and our money mindset and abilities.
And, it’s finally time to welcome in the first day of spring! Woohoo! We’ve made it through another Winter!
Although, being Gold Coast based, that’s hardly a struggle!
Spring has always been associated with joy, passion and reawakening, and we love nothing more than a bright sunshiny day.
Research proves that warmer days and longer exposure to daylight have a great impact on our mood. We even find ourselves smiling more than we have. Bonus!
Being happy is a pretty hard emotion to fake! It’s something we all strive to find and maintain. As the saying goes… ‘whatever makes you happy!’
So, aside from getting your finances in tune, What are some simple things we can do to achieve the healthy as well as the wealthy?
Try the following top tips!
1.SMILE – even fake smiles can lift your mood!
2.Exercise – or just Move
3.Get a good night’s sleep – 8 hours minimum
4.Spend more quality time with your family and friends
5.Money does not buy happiness – spend on experiences, not stuff
6.Get outside – nature does work wonders
7.Keep a gratitude journal – find something everyday that lit your fire
8.Choose to be happy – it can be choice! How do you choose to feel today?
