by Jodie | Mar 16, 2017 | Advisers, Insurance & Protection, Retirement
You’re retired, the house is paid off and the children are self-sufficient, – it may be time to review your life insurance?
Policies expire
People take out life insurance while they are working to protect their dependants if they die prematurely.
Life insurance policies, including income protection, trauma, and total and permanent disability (TPD) insurance, generally expire when you reach a certain age, even if you are still working. So, let’s consider some of the insurance products you may have and see how long they generally last.
Insurance options
Term life insurance is a popular policy option. Beneficiaries receive a lump-sum payment if the policy holder dies or suffers a terminal illness and the usual expiry age is 99.
TPD insurance is paid in a lump sum if an accident or illness prevents the policyholder from earning an income. The usual expiry age for this type of insurance is 65.
Trauma insurance covers a major illness or injury, such as a stroke or car accident. It covers specific events and is paid out in a lump sum that can be used for any purpose, such as living or medical expenses. The usual expiry age for this type of insurance is 70.
Income protection insurance covers loss of income caused by accident or illness. Typically, these types of policies pay 75 per cent of the insured person’s income but there are many variations in their terms. The usual expiry age for this type of insurance is 70.
What about my super?
There are usually additional rules for policies held within a superannuation fund. Life insurance coverage through super usually ends at the age of 65.
When deciding whether to take out or continue your life insurance, you may wish to consider such things as any outstanding debts, including any mortgage repayments, as well as the needs of those you leave behind.
Nevertheless, each person’s circumstances are different and if you are unsure of what you need, talk to your financial adviser.
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by Jodie | Mar 3, 2017 | Budgeting, Finances, Insurance & Protection, Superannuation, Wealth
From wills to long-term budgeting, there’s a lot to think about when making your retirement to-do list. Here’s some top tips to make sure you’ve ticked all the boxes.
1. Check your Will and Power of Attorney documents
Without a valid will, an administrator will be appointed to manage your estate, which may cause your family plenty of problems. To save them stress, ask a solicitor to draw it up for you and make sure you and two witnesses sign it. Powers of Attorney protect you whilst you live, but can’t make your own decisions. Pick the person you trust most to make the big decisions in your life.
2. Plan your estate
Think of your estate plan as your family’s stress-free action plan that they can turn to for guidance when you pass away. It should cover all of your documents, contacts, debts, bills and assets so your family can easily figure out what to do with them. And don’t just put it all on paper, communicate with your family now, and let them know what you’d like so everyone is clear. It may save problems later!
3. Budget for the long haul
Australians are living longer than ever – which means your retirement savings also need to last longer. Create a long-term budget that will help you live the lifestyle you want – and don’t forget about healthcare costs. Then comes the most important part of a budget – sticking to it. Think of it as the plan you’ll follow for future spending.
4. Invest in your future
From boosting your superannuation to investing in shares and property, understanding your investment options can make a huge difference to your retirement savings. When you start investing – the earlier the better – make sure you have a mix of investments to spread your risk. And invest in yourself! Learn and partner with a professional to maximise your options.
5. Be wary of scams
Investment scams are on the rise in Australia, with perpetrators directly targeting retirees to access their superannuation funds. Protect yourself by never giving out your financial details over the phone or by email. And be suspicious of anything that sounds too good to be true. You know it probably is!
6. Start thinking about insurance
Many insurance policies expire at a certain age, leaving you without cover. And if yours comes from your superannuation fund, it could be eroding your savings. From age-based insurance policies to products that cover funeral expenses, you should seek professional financial advice to develop a plan that is appropriate for you as you enter retirement, so touch base with your planner sooner rather than later.
by Jodie | Feb 27, 2017 | Australian Economy, Budget, Economy, Superannuation
The changes to super and tax laws proposed in this year’s federal budget, then revised and adjusted by the government in September, have been passed through Parliament and are mostly due to take effect from July 1, 2017. That means that you have until July to consider if there is any action you should take to make the most of current super rules or to comply with the upcoming changes.
We take a look at some of the key changes in the table below.
Significant super reforms
| Now |
New* |
| No limit on funds moved into tax-free pension phase. |
$1.6 million transfer balance cap on super transferred to the tax-free retirement income phase. |
| You can contribute $180,000 of after-tax earnings to super each year (or $540,000 for those eligible to bring forward two years of contributions). |
Reduction in annual after-tax contributions cap to $100,000 (or $300,000 if bringing two years of contributions forward, if eligible). Clients with balances of $1.6 million or more, just before the start of the financial year, cannot make after-tax contributions. |
| Annual concessional (before-tax) contributions limit of $30,000 (or $35,000 if aged 50 or over by June 30, 2017). |
Reduction in the annual concessional (before–tax) contributions cap to $25,000. This applies regardless of age. |
| Unused concessional contributions caps are lost. |
Catch-up concessional contributions may be available for those with balances less than $500,000 just before the start of the financial year. |
| If income from employment is less than 10% of total income, you can claim a tax deduction for personal super contributions. |
Clients under age 65; or age 65-74 who satisfy the work test, can claim a tax deduction for personal super contributions. |
| Additional 15% tax on certain concessional contributions if your adjusted income exceeds $300,000. |
Additional 15% tax on certain concessional contributions, if your adjusted income exceeds $250,000. |
| Earnings on transition-to-retirement super pensions are tax free. |
No earnings tax exemption on transition-to-retirement super pensions. Earnings will be taxed at up to 15%. |
| Anti-detriment payments may apply on certain lump sum death benefits (generally a notional refund of contributions tax to be paid on death). |
No anti-detriment payments on lump sum super death benefits (no refund of contributions tax paid on death). |
| Offset for contributions to spouse’s super (if spouse earns under $13,800). |
Offset for contributions to spouse’s super (if spouse earns under $40,000). |
| The ‘low-income super contribution’ refunds tax (up to $500) on concessional contributions for those earning $37,000 or less. |
Introduction of the low-income super tax offset (effectively a continuation of the low income super contribution). |
*These measures start July 1, 2017, except for the catch-up concessional contribution measure which starts July 1, 2018.
If you are concerned about how you may be impacted, now is the time to talk to your financial adviser so you have time to review your superannuation and retirement plan, before the changes take effect.
If you enjoyed this article, feel free to share it with your friends and family.
Want to know more? To find out how we could help you, contact our office today and make an appointment with one of our professional financial advisers on 07 5593 0855.
by Jodie | Feb 22, 2017 | In The Media
There is a dizzying array of types of insurance available in Australia, although the average person probably won’t be needing aircraft or defamation insurance. But like death and taxes, the majority of people won’t be able to avoid getting at least some of the basic types of insurance such as motor vehicle, house and contents and health cover.
by Jodie | Feb 17, 2017 | Business, Debt Management, Insurance & Protection, Savings
Protecting yourself from frivolous creditors and lawsuits is becoming an increasingly common concern. Here we outline some of the ways you can insulate your assets.
Check your insurances
Liability insurance is a must if you want to safeguard your assets in the event that you need to pay compensation. Lawsuits can arise for a range of reasons – from personal injury to financial loss resulting from any products or services you provide.
You can choose from three key types of cover – public liability insurance, professional indemnity insurance and product liability insurance. Seek advice from your financial adviser or insurance broker to determine which, if any, of these are suitable for you.
Separate business and personal assets
If you are a business owner and your family home is held in your name, it may be at risk from bankruptcy or litigation procedures.
One way to protect your home is to give majority ownership of the home to a person who is not an owner of the business, typically a spouse. The business owner generally retains some interest in the home, however, to ensure the asset is not dealt with without his or her authority. It is also important that the spouse does not having any dealings in the business, for example guaranteeing loans. You should also know that the trustee in bankruptcy will consider other factors to determine the bankrupt’s interest in the house and if you transfer your home to your spouse for no consideration or for less than its value, before bankruptcy, the trustee in bankruptcy can in some cases reverse the transaction.
Create a trust
Trusts can be beneficial asset protection strategies, as you are transferring ownership of an asset away from yourself and into a legal structure, so the asset is not yours to lose in the event you are sued.
Anthony Lieu, Lawyer at Legal Vision, says trusts also provide a degree of flexibility.
“Just as each family is different, each discretionary or family trust is also different. Trusts generally take their rules and operation from the trust deed, so each trust will have to abide by a different set of rules,” Lieu says.
Summary
Structuring your assets the right way is one of the most important things you can do to protect your hard-earned wealth. As these strategies can be complex, always seek the help of a qualified professional such as your financial planner, lawyer or accountant.
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by Jodie | Feb 13, 2017 | Finances, Insurance & Protection, Investments, Money, Wealth
Creating a valid will is one of the most important things you can do to protect your loved ones. Here we explain how to go about it.
Seek legal advice
While DIY will kits can seem like an easy and inexpensive way to make a will, they can be fraught with pitfalls.
Your affairs are probably more complex than you think – your family home, business assets, super, investments and belongings. Some of things are covered by a will and some aren’t! Having a properly drawn up will helps to determine who gets what and can save your family time and stress when you are gone.
Your lawyer or financial planner will also be able to provide insights into how to best structure your will, both to protect assets and to minimise tax. Examples include setting up a testamentary trust to provide for minors or protecting your estate from creditors and making binding nominations for your superannuation funds.
Safeguard your children’s future
Probably one of the most important reasons to make a will is to ensure any dependent children are well cared for should the worst happen.
Sydney wills, probate and estate specialist, Graeme Heckenburg of Heckenberg Lawyers, says generally parents should make separate rather than joint wills, as they are likely to die at different times.
Heckenburg says a will should also appoint a guardian to take care of the day to day living and housing arrangements for the children and a trustee to execute the will and make any financial decisions. This can be one person or two different people.
“If you don’t appoint a guardian and there are young children, ultimately the decision will be made by the Guardianship Tribunal [in NSW]. If the guardianship is contested, the matter could even end up in the Supreme Court,” he says.
Keep your will updated
Once you have made a will, don’t leave it in a drawer gathering dust. Circumstances change over time change, so ensure your will reflects your current situation, particularly if your spouse has died, you have married or divorced or you have become a parent.
by Jodie | Feb 9, 2017 | Centrelink, Economy, Finances, Taxation
With many changes coming into effect this year – and more reforms being suggested – now is a great time to get your finances organised so you’re prepared.
Changes to the Age Pension
Changes to the Age Pension assets test kicked in at the beginning of January 2017.
The good news is that the threshold has been increased, so you can now own more assets before your pension is affected. But the penalty for going over the threshold has also increased. For every $1,000 of assets you have above the new threshold, your pension will be reduced by $3 – double what it used to be.
The asset test threshold varies depending on your marital status and whether you own a home, so it’s best to talk to your adviser about the changes.
The age of entitlement
A Grattan Institute report titled Age of entitlement: age-based tax breaks published in November last year suggested that making several changes to the entitlements seniors receive could save the federal government $1 billion a year.
The institute recommended winding back:
- the seniors and pensioners tax offset (SAPTO)
- the Medicare levy income threshold for seniors
- the private health insurance rebate for seniors, so they receive the same rebate as younger Australians.
The recommendations focus on retirees who have incomes at taxable levels. These may be retirees who are self‑funded or on a part Age Pension. The changes would have little effect on seniors who receive a full Age Pension. While these are only recommendations at this stage, you may benefit most from preparing early.
Stay informed and plan ahead
Staying up to date about any changes to superannuation and seniors’ entitlements – locked in or potential – may help put you one step ahead. Regularly reviewing your retirement plan to ensure it can adapt to changes is an excellent way to keep your retirement strategy resilient. Talking to a trusted financial adviser may help you achieve that peace of mind, so feel free to give us a call.
by Jodie | Jan 22, 2017 | In The Media
Only about 20% of people have a financial advisor or have sought professional financial advice, meaning at the moment, 80% have yet to see the need to visit a planner. So, do you need to see an adviser? How about I give you five good reasons why it might just be a really good idea!
1. An adviser’s job is to dig deep
They find out where you’re currently at, and what you want to achieve. They help you articulate your goals. I know, I can hear you – and sure, you can probably do it on your own. But, just putting it out there… have you? Do you know how much you need in retirement? As a lump sum? As an annual income? Do you have the best protection in place should the unexpected occur? Do you have debt that you want to get a handle on? Are your goals written down clearly with a plan of attack? We know that we are usually better off when we share our goals and have someone to be accountable to. Someone who’ll kick our butts until we achieve them. This is where a financial adviser can be invaluable!
2. An advisers’ role is all about strategy
They’re to help you make the best of your current situation, while still looking ahead for the future. Most of us have a tendency to live beyond our means and scramble those last few days before the next pay check come in. You always promise that as soon as there’s something left over, you’ll start saving, even investing! An adviser can introduce strategies like salary sacrifice, salary packaging, tax minimization, protection planning and regular investment savings plans.
3. How about you view your adviser as a coach if you’re still not convinced?
Advisers assist you to understand where you’re at, what’s ahead and be way more in control of your financial situation. You’ll be reassured that you have a plan and someone to help keep you on track. We’re the Personal Trainer of your money and you’ll be able to see clearly that you’re making gains and kicking goals at each review!
4. Mistakes are a part of life
We’ve all failed, but as we know, it’s how quickly we get up and recover that can count. Unfortunately, some of us have learned the hard way, that errors can be pretty costly. Having the option to run business and investment ideas by an expert who knows their stuff has the potential to save you thousands in expensive mistakes!
5. Most advisers also understand protection
A brilliant financial plan is useless if something from left field takes you out and all that you’ve worked so hard for isn’t protected. True peace of mind comes from ensuring that your own health, ability to earn and income and your loved ones or even key people in your business are taken care of in event of traumatic illnesses, disablement or even fatal situations.
Hopefully these five reasons are compelling enough for you to think again about whether or not you really need an adviser. These days, we’re time poor. We’re already juggling our career, business, employees, health and wellbeing, significant other, little people and besties, while trying to stay on the green smoothies, pack a nutritious lunch, fit in yoga and not forget the school run and nail eight hours sleep each night.
There’s not much time left over and being someone who’s all for outsourcing… why not allow a professional to assist? Unless you’re all over your financial situation, have set plans that you’re working to achieve and truly have it all together, I believe a financial adviser can add value, and possibly point out areas where you hadn’t even thought you might need a hand.
Usually an initial interview is at the adviser’s expense of time, so look around, interview a couple and find someone you click with who can make your life easier today! It may just be the best investment you ever make.
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by Jodie | Jan 17, 2017 | In The Media
Gold Coast-based advice firm Wealth Planning Partners has launched a subsidiary firm that will focus specifically on Australia’s growing ageing population.
Advisers Therese Jarrett and Amanda Cassar will head the subsidiary Trusted Aged Care Services, according to a statement.
Ms Jarrett said she has become increasingly busy in keeping up with demand, having specifically focused on aged care advice for around four years.
“We shared a mutual interest in the aged care arena based on our personal family needs and brainstormed ideas on how we could make the transition easier for both those needing care and their families,” Ms Jarrett said.
Ms Cassar further added that it was important to be ready for the opportunity and be equipped to deal with the transition process.
“To that end, we have both completed the Aged Care Steps course to become Accredited Aged Care Professionals and will offer varying services depending on the needs of the client,” Ms Cassar said.
We already have a relationship with a number of facilities, but are keen to visit more homes and have a greater understanding of what each offers to better assist our clients into a facility that suits them best.
“We also stay in touch for up to three months after entry to ensure all goes well.”
Wealth Planning Partners is a corporate authorised rep of Financial Services Partners.
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by Jodie | Jan 13, 2017 | In The Media
Financial Standard
A Queensland financial advice practice is launching a subsidiary business assisting the elderly transition into aged care.
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