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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?
by Jodie | Aug 31, 2015 | Debt Management, Finances, Money
The foundation of how and what we think about money often comes from the environment we were raised in, and our parents own views. We need to be very mindful of what exactly they taught us about money and how this impacts the decisions we make today.
Cast your mind back to your childhood and ponder a few vital questions:
- What did you notice at home when it came to the family finances?
- Did your parents fight constantly about money or was the topic just ignored or never even mentioned?
- Did they teach you lessons like ‘money is the root of all evil’ or ‘money doesn’t grow on trees’ or ‘kids/pets are expensive’?
- Did they live in scarcity, always ‘being on a strict budget’ or having to ‘tighten the belt?’
- Did they live beyond their means or were they extreme savers?
- Did you see them give money away to the homeless or did they actively support any favourite charities?
- How are they around money now?
Can you see any familiar patterns? Are you personally excited, apathetic or pessimistic about money?
It’s time to have a bit of a think about our personal beliefs around money. Where do you think the ideas came from? Some notice early certain thought patters that they don’t agree with and are brave enough to take the step and change mindset, thinking, “I’m going to do things differently!”
And for the really good news; you really do get to choose what you want to believe from now on.
The patterns and beliefs of your parents, were also handed down from their parents, yet each generation can have vastly different circumstances to be raised in. These ideas from your parents don’t have to be your ideas any more. You can choose to challenge the thoughts once you start being aware of where they originally came from.
So, is there one idea you can change that may help your relationship with money?
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by Jodie | Aug 26, 2015 | Australian Economy, Economy
As you’ve probably noticed, markets have been a little choppy of late! You may be wondering what it’s all about. Hopefully, this will give you a basic insight into what’s been going on!
The primary influences for the recent market falls are:
- The Chinese currency devaluation and share market volatility was met with new government policy aimed at managing risk of further decline and managing investor sentiment. Manufacturing data released on Friday suggests these measures have not had the full desired impact to stabilise growth.
- Other emerging economies are now also facing weaker growth, higher interest rates and higher levels of debt.
- If the US raises interest rates for the first time in 9 years this September, emerging economies will be likely to face even more headwinds that will contribute to their effect on global growth.
Recent market activity and what lies ahead are:
- While the markets move to price for weaker growth can be justified and is likely overdue, it is being questioned as to whether this market correction has been more severe than necessary.
- Developed markets are likely to be effected by the emerging markets slowdown (particularly relating to China), but the developed markets are still supported by a number of positive factors and China still has opportunities to support their future growth.
- We do believe there may be softer returns than experienced in previous years, but we do not see this as a market breakdown, it is more a ‘bump in the road’.
If you’d like to know a little more, please click here for the Market Update as prepared by ANZ by clicking here: Market Update 2015_08 Market correction
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by Jodie | Aug 25, 2015 | Economy
Big thanks to Ord Minnett for the following short but sweet look at the current correction going on in Markets:
Stock markets have continued to trade down while bond prices have lifted following heightened fears of a growth slowdown in China. The correction started after China’s sudden devaluation of its currency. At the time, there was enough doubt about China’s motivation behind the move, leaving open the possibility that the adjustment in the currency was simply part of a planned liberalisation of its currency market. But the steady fall in global commodity prices and weak Chinese manufacturing updates have now moved attention and concerns to its economy.
Investors now face the same question they have had to address many times this cycle: is the fall simply a correction in a sustained medium-term bull market, or the beginning of the end of the cycle? For the moment, we are siding with a correction, but in a multi-year rally that is ageing.
Two prominent risk factors could end the economic and risk market cycle: a surge in inflation which requires the Federal Reserve to raise the cash rate more aggressively and to a higher level than currently expected; and an emerging markets debt crisis.
The latest market turmoil was not set off by the Federal Reserve but by worsening growth concerns about emerging markets, and particularly about China. Growth in emerging economies has been disappointing for years now but this time around that weakness is coming on top of a world economy that slowed to below trend in the first half of 2015.
The main threats to risk markets are now that growth stays well below trend, setting off deflationary forces, or worse, that market turmoil feeds on itself and the global economy, which in turn brings about a recession. For the moment, we believe the odds of a global recession remain low, but accept a higher risk of sustained below-trend growth.
The reason we don’t believe it is the end of the cycle is because we do not think Chinese weakness is sufficient to bring about a global recession, and because there remain sufficient supports from cheaper oil, lower bond yields and monetary easing in emerging economies. The latter does require stable currencies and, in turn, a delay by the Federal Reserve in moving on the US cash rate. A continuation of recent market turmoil and falling commodity prices would probably induce such a delay by the Federal Reserve.
