by Jodie | May 15, 2018 | Superannuation, Wealth
For many years, salary sacrifice has been the most tax-effective way to build superannuation.
New Super Strategies! Now, add personal deductible contributions to your super strategy.
New legislation introduced 1 July, 2017 removes restrictions on claiming a tax deduction for personal contributions to super. That is, if 10% or more of your total income is attributable to employment. So, from a tax and super viewpoint, personal deductible contributions will have the same net effect as salary sacrifice.
You can use either strategy to reduce your taxable income and boost super contributions. However, personal deductible contributions are taxed. For certain defined-benefit super funds, existing qualifications on these deductions remain. For example, you must give a notice of intent form to your super fund before:
- starting an income stream with all or part of the contribution
- withdrawing or rolling over benefits (including the contribution)
- giving the trustee a splitting contributions application.
In any other case, you must give a notice of intent form to your super fund when you lodge your tax return. Or at the end of the financial year following the year in which the contribution was made – whichever comes first.
You must be aged under 65 or satisfy the work test between 65 and 74. But, a contribution can be accepted within 28 days of the end of the month you turn 75.
Salary sacrifice has its drawbacks
While salary sacrifice has been the cornerstone strategy, it can have restrictions. For example, some employees do not offer it, or will not allow you to pick your own fund. There’s no guarantee about the frequency of contributions. If you have income replacement insurance, you might find this is affected by your reduced income through salary sacrifice. Your employer may even reduce your super guarantee entitlements to match this reduced income. It may be time to implement a new super strategy.
A comprehensive super strategy
Personal deductible contributions could be a great fit for your financial plan. You can choose your super fund and the timing of your contributions. And because you’re claiming a tax deduction on your super contribution – not reducing your salary – your income protection probably won’t be affected.
Personal deductible contributions can also work well alongside your transition to retirement strategy and other contributions you’re making. These include spouse contributions, co-contributions and contribution splitting.
It’s always a good idea to review your financial situation and savings plan before new legislation comes into place. Speak with a financial adviser to learn about how you could benefit from building personal deductible contributions into your retirement savings strategy.
The advisers at Wealth Planning Partners would be happy to help!
by Jodie | May 11, 2018 | Australian Economy, Budget, Economy, Finances
So… have you been wondering how the latest Federal Budget may affect Australian families?
Each year, the Federal Government hands down their annual budget. Basically, it’s a spending plan for the country. For many it passes without a blip. Yet, some others are up all night dissecting the information to see how different parts of the Australian population will benefit. Or even possibly be disadvantaged. Who are the winners? And who misses out?
Here’s the highlights reel of exactly what you need to know! These points are the winning points for families out of the 2019 Federal Budget:
- The Federal Budget is to return to surplus in 2019/2020
- There is a 7 year plan to eliminate the 37% tax bracket
- A major crack down on tax cheats is set to begin
- The Medicare Levy will remain the same at 2%
- Superannuation exit fees will be banned for all members
- The Child care combined income threshold will increase to $187k
- 14,000 Aged Care Home Care places will become available over the next four years
- Schools are set to receive an extra $24.5bn over 10 years to improve education
- Infrastructure spending is to increase including $1billion to improve traffic flow
- Energy costs will reduce by $400 per year for each family from 2020 – that’s a great bonus!
- National security spending will be increased with a $293.6m investment
Piqued your interest? Well, If you want to know more?… click here!
So, to see how the budget may affect families, and in particular, your family, give your Gold Coast financial planning team a call on 07 5593 0855.
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by Jodie | Apr 20, 2018 | Economy, Money, Wealth
Increased Diversification can assist in lowering risk in times of market volatility.
A properly constructed portfolio can protect investors in downturns in the market and help provide appropriate returns at other times.
Portfolios which include diversifying assets may protect the overall portfolio against equity market volatility.
It’s been over ten years now since the last ‘global recession’ or ‘global financial crisis’ and many are wondering if another large correction or event is nigh.
If you have concerns about your portfolio and how it’s invested, have a chat with your adviser today.
by Jodie | Apr 9, 2018 | Budget, Finances, Savings, Wealth
Whether you’re planning a large, luxurious wedding or a small, intimate affair, smart budgeting could help free you from financial worries, so you can enjoy your special day.
Following these steps may help ensure no one’s worried about debt on the honeymoon.
1. Plan early
Given that the average Australian wedding costs $36,200[1], the sooner you start saving, the sooner your dream wedding can become a reality. The day after the engagement is fine!
2. Create a budget
Take stock of your income and calculate the maximum you can afford to spend on the wedding – and your ideal cost scenario.
3. Talk to your family
If you’re part of the bride’s or groom’s family and want to contribute, let them know. You could contribute a set figure or fund a specific part of the ceremony, such as the flowers or venue.
4. Prioritise
What must you have at the wedding and what can you compromise on? For example, do you want a live band but aren’t fussed about fancy table decorations? Agreeing on your priorities up front can help you clarify which aspects to save for and which to downplay or skip altogether.
5. Start a spreadsheet
Once you have an idea of your budget and priorities, it’s time to dive into the details. Use a spreadsheet to list a maximum cost for every wedding-related item from bouquet to band and compare it with vendors’ quotes. Don’t forget to take into account hidden costs like insurance, corkage and the marriage licence as well as costs related to the rehearsal dinner and honeymoon.
6. Stay accountable
Avoid blowing out your budget by keeping your spreadsheet up to date, setting up a wedding-expenses-only bank account, and sticking to your guns as far as your limits and priorities are concerned.
If you’ve created your budget and despair of affording your dream wedding any time soon, don’t worry. Here are some tips to help you reign in your costs.
- Limit your guest list to your favourite people: At $100 per head, every 10 guests cost you $1,000.
- Think outside the box when picking a wedding venue: A park, garden, art gallery or friend’s house may be more affordable than a hotel, and the natural ambience can save you money on decorations.
- Book an out-of-season wedding: It can be cheaper to schedule a wedding in winter, on a week night or a Sunday morning.
- Keep your menu simple: Stick with the specialties of the season and region, consider canapes or buffets over three-course meals, and ask for house spirits (not top-shelf varieties) or beer and wine.
Call in an expert
While you may call upon a wedding planner to help you organise your special day, a financial planner may be just as important.
A professional financial adviser may help you create and stick to your budget as well as stay accountable – so you can focus on the important things, like celebrating with the people you love!
[1] Australian Securities and Investments Commission, ‘How much can a wedding cost?’. MoneySmart. Available at: https://www.moneysmart.gov.au/managing-your-money/budgeting/simple-ways-to-save-money/how-much-can-a-wedding-cost
by Jodie | Feb 12, 2018 | Budget, Debt Management, Finances, Insurance & Protection, Investments, Money, Retirement, Superannuation
New Year’s resolutions are easy to make but often hard to keep. But there are real benefits to making financial resolutions. Here are some helpful suggestions to get you started.
Get back to basics
If you find it near-impossible to reach your financial goals, you may need to revisit the basics: sticking to a budget. Does temptation usually unravel all your good saving intentions? Consider opening a locked savings account that you can’t deduct money from for a period of time, then automatically transfer funds into it each payday.
Plan for large purchases
Whether you need a new fridge or are considering placing a deposit on a home, the earlier you start planning for these purchases, the more manageable they become.
Set up an investment plan
If you’re considering investing this year, developing a sound investment plan is essential for your success. This may include working with your financial adviser to identify clear financial targets, calculate how much you can afford to invest and determine how much risk you’re willing to take on.
Review insurance policies
Knowing you are properly insured may help provide peace of mind if your circumstances change unexpectedly. But identifying appropriate insurance policies and levels of coverage for your unique situation can be difficult – and getting it wrong is risky. This is why it’s important to regularly review your insurance policies with your financial adviser, especially if your situation changes.
Check your super
If you have multiple superannuation accounts – or have forgotten where your super is – you’re not alone. According to the Australian Taxation Office, there’s $18 billion of lost super waiting to be claimed nationally.1
Effectively managing your super is vital for building your retirement nest egg. Contact your financial adviser who may help you manage your super.
Set retirement goals
The earlier you set clear goals for your retirement, the more options you’ll have. Work out what assets you have – from your home to superannuation – and review your current spending patterns, then determine your goals for retirement and what lifestyle you’d like to enjoy. This will help you calculate how much you’ll need.
Create an estate plan
Estate planning involves more than writing a will. It outlines what you want done with your documents, contacts, debts, bills and assets, making the process easier for your beneficiaries after you’ve passed away.
Whatever your financial New Years’ resolution may be, seeking professional advice may help you make it reality this year.
Note:
1 The Sydney Morning Herald, 2017, ‘Almost $18b in lost super waiting to be claimed’. Accessible at:
http://www.smh.com.au/money/super-and-funds/tax-office-holds-records-of-almost-18-billion-in-lost-super-20170920-gylo3z.html
