Time to reflect

/in /by

imagesCA814TBQReady or not, the end of the year is fast approaching and now is the perfect time to start thinking about the year ahead.

 

 

 

In particular, this time of the year presents a great opportunity to meet with us to review your financial strategies and goals.

 

Many people use the Christmas/ New Year period to reflect on the year that has just passed, often in a blur and to begin thinking about the year(s) ahead. In particular, this time of year presents a great opportunity for you to review your financial strategies and goals in preparation for 2014 and beyond.

THE IMPORTANCE OF REVIEWS

Reviews should take place on a regular basis, where you have the opportunity to make informed decisions and factor any changes into your financial plan.

Below is a simple guide to tidy up your finances for the year ahead.

1.         HAVE YOUR KEY FINANCIAL GOALS CHANGED?

Our lives are not constant and our goals change slightly (or greatly) from year to year. Also, major life events such as serious illness, the birth of a child, inheritance, marriage and the death of a parent or spouse can all result in significant changes to our wealth management goals.

2.         PRIORITISE YOUR GOALS

It is important to rank and prioritise goals and decide in what timeframe you want to achieve them. Being realistic about your timeframe is essential to ensuring that your goals will be achieved.

3.         SHORT, MEDIUM OR LONG TERM?

Most industry experts agree that a short-term goal is one that can be achieved within a year or so. Medium- term goals typically require two to five years, and long-term goals usually take longer than five years.

For example, reducing credit card debt is likely to be a short-term goal, whereas saving for a home deposit would often be a medium-term goal. Depending on your age, providing for retirement is a long-term goal.

4.         IF YOUR FINANCIAL GOALS HAVE CHANGED, HOW WILL THIS AFFECT YOUR FINANCIAL STRATEGY?

This is where the advice of a financial adviser is critical. An adviser has the tools and knowledge to create projections that take into account changes to your goals and changes to your timeframes for achieving them. These projections will help you to see where your plans for savings, investment contributions or assets may need updating.

5.         BE SAVVY

Make sure that your investments and level of protection support your level of risk and your goals. An adviser can develop a tailored analysis that best suits your individual needs and provide ongoing portfolio advice.

Reflecting and thinking about your financial position, as well as setting a clear path, is critical to making sure you can reach your goals. You don’t have to wait until the first day of January to review your financial situation. Contact us today so that you can get the help you need to achieve your “New Year” resolutions.

Source I Zurich

Breast Cancer

/in /by

imagesGet Them Covered

October marked Breast Cancer awareness month around the world. Breast cancer is the most commonly diagnosed cancer among women in Australia, with 14,940 women predicted to be diagnosed with the disease in 2013, rising to 17,210 women in 2020. That’s an average of 330 women a week.

 

 

In the last five years, breast cancer has made up 50% of all of trauma insurance claims paid to women. And a high prevalence isn’t just observed for trauma. Breast cancer accounted for 20% of income protection claims, 18% of TPD claims and 15% of life and terminal illness claims.

 

Increasing age is one of the strongest risk factors for developing breast cancer, but it doesn’t just affect older people. Two out of three cases will be diagnosed in women aged 40-69, key ages for insurance coverage.

 

How can insurance help?

Trauma cover can provide a lump sum payment in the event of diagnosis. You can discuss with us how much cover is needed and you may include funds for treatment, supplementary income, reducing debt or even for a spouse to take time off work. Given the high chance of claim, trauma is the most expensive of the lump sum covers available.

 

Trauma insurance can cover breast cancer diagnosed at any stage. Definitions have evolved in the last few years to provide full claims to most women, even if they are diagnosed early, referred to as carcinoma in situ. Modern definitions should cover women who have a lumpectomy and follow up treatment like radiation or chemotherapy, rather than requiring more dramatic treatment to satisfy a claim at an early stage.

 

Keeping life going

Of course not all women will cease work. Australian women have an 89% chance of surviving more than five years after diagnosis. Certain income protection definitions and benefits can help provide support.

 

Cancer patients are one of the most likely groups of claimants to continue working through treatment. Finding a policy with a 10 hour definition will give them the flexibility to work up to 10 hours a week while undergoing treatment, without financial penalty. You may also look for a policy with a counselling benefit. While grief support is common on life cover, under income protection, this benefit gives access to support and comfort during a difficult and stressful time.

There are lots of considerations when choosing a policy for cancer coverage and sometimes it is impossible to be across all the benefits.

 

To find out how trauma insurance can help you, contact our office today!

 

1,3, 4. www.nbcf.org.au/Research/About-Breast-Cancer.aspx

2. Claims paid between 2009 and August 2013

Investing for your Children’s Future

/in /by

kidsplaying-6Every parent wants the best for their children. If you are in a position to invest money specifically for your children’s future, you should follow the same approach as if you were investing for yourself.

 

 

The first step is to clearly identify why you are investing, then set yourself a goal and put a strategy in place to achieve that goal. Your strategy needs to suit your circumstances, risk tolerance and investment timeframe.

Whether you have short-term goals and want a high interest earning savings fund or you have long-term goals with a focus on managed funds, one vital question you need to consider is ‘Whose name should the investment be held in?’

Children are taxed at penalty rates on unearned income.

There are other tax-effective investment options available including:

  • Investment bonds — income is taxed at up to 30 per cent within the bond and reinvested each year. The proceeds of the bond are tax-free after 10 years and the child can be named as the beneficiary.
  • Investments can be held by, and in the name of, the parent on the lowest marginal tax rate. Although all income is declared in that parent’s tax return, the tax payable on this income may be reduced considerably with franked dividends paid from investments in Australian shares.
  • Implied trusts — the investment is held in the parents’ name in trust for the child. Beware that the investment must be used for the benefit of the child, otherwise the Tax Office can attribute the income to the parents and tax them personally.

As there are a number of options to choose from, make an appointment with us today to determine the right choice for you and your children.

Source | IOOF

Super Check-up

/in /by

SuperGuru_150X150When your Annual Statement from your superannuation fund arrives it may be tempting to put it straight into the drawer.  Your superannuation is either already your most valuable asset, or will be by the time you reach retirement age. 

 

Your details

Firstly, make sure your details are up to date – your name, address, other contact details & your Tax File Number (TFN).  If your superannuation fund doesn’t have a record of your TFN, you may pay a higher rate of tax on your contributions.

Beneficiaries

Check your beneficiary and update them if needed.  A super fund may offer different types of nominations.

  • Non-binding nomination – You may direct the Trustee to whom your benefit is paid to, but the Trustees have the final decision.  They will take into account all claimants and check your will.
  • Binding nomination (lapsing) – The Trustees are bound to pay your benefit to who you have nominated, providing you renew every 3 years.
  • Binding nomination (non-lapsing) – The Trustees are bound to pay your benefit to who you have nominated, however you do not need to renew every 3 years.

Under Superannuation Law, the person(s) you nominate can only be a spouse (including defacto), Child (including adult children, step and adopted children), Financial dependent, or someone in an interdependent relationship with you at the time of your death.  Otherwise you can make the nomination to your estate (and ensure your will is up to date).

Insurance

Review your insurance cover.  Is your level of cover still appropriate?  Do you need to increase your cover to take into account a change in your income or commitments?

The most common types are Death only, Death and Total & Permanent Disablement (TPD), and Income Protection.  Some also offer Trauma cover.  The type of cover could either be:

  • Automatic insurance cover – This is a minimum level of cover without filling in forms.
  • Units – The value of each unit depends on your age (decreases as you get older) and the premiums remain the same.  You can increase the number of units you have.
  • Fixed – The level of insurance cover remains the same and the premiums increase as you get older. 

Investment Strategy

Does your investment strategy still suit your risk profile?  Your investment strategy should match your long term investment goals.  If you are considering an investment switch, it may be best to speak to a Financial Planner to explain the implications of your decision.

Fees

What are you paying fees for and how much are you paying?  Do the fees include financial advice or is that extra?

What about multiple super funds from previous employers?  Or do you have lost super because you changed your name or address.  If you have more than one fund, then each super fund will be charging you fees.  Most super funds can provide you with a “Combine your super form” which you will need to complete for each fund you want to rollover into to your existing super fund.

Employer Contributions

Have a look at your super contributions.  Are they up to date?  You can check your payroll slips and make sure that the amount being paid is the same as what is going in.  Superannuation Guarantee (SG) Contributions commenced from 1 July 1992.  At that time, employers either paid 3% or 4% (depending on total amount of payroll) of your gross salary into your super account.  Since then the rate has gone up steadily.  It was sitting at 9% for a while, but from 1 July 2013, employers need to pay 9.25%.  Under legislation, your employer must pay at least quarterly.  If not, follow up with your payroll office. 

images2

Generally, you’re entitled to super guarantee contributions from an employer if you’re 18 years old or over and paid $450 or more (before tax) in a month.  It doesn’t matter whether you’re full time, part-time or casual or a temporary resident of Australia.  If you’re under 18 you must also work more than 30 hours per week to be entitled to super contributions.  If you’re a contractor paid wholly or principally for your labour, you’re considered an employee for super purposed and entitiled to super guarantee contributions under the same rules as employees.

From January 2014, your employer will pay into a “MySuper” authorised account if you do not choose a super fund.  If you are eligible to choose a fund, your employer must give you a standard choice form. 

If your employer forwards member voluntary contributions into your super fund on your behalf, they must be paid into your super fund with 28 days of the end of the month in which they take it from your pay.

Add extra contributions to your super

Adding extra to your super early in your working life means that compounding interest will help your balance grow.  Your employer contributions will probably not be enough to ensure your final balance is enough for retirement.  There are several ways to add extra to your super:

Concessional (before-tax) contribution

Known as Salary Sacrifice.  You sacrifice part of your salary for extra employer contributions which are then taxed at 15% instead of your normal tax rate.

The general concessional (before tax) contributions cap for 2013-14 is $25,000.

However, from 1 July 2013 if you are 59 years old or over on 30 June 2013, additional concessional contributions will be able to be made to your super, with the cap increasing from $25,000 to $35,000.

From 1 July 2014, the higher cap of $35,000 will also apply to people who are 50 years or over.

Non-Concessional (after-tax) contribution

Also known as a personal contribution.  You can make a personal contribution to your super (even if you are not working) as long as you are under 65 years of age.  If you are age 65 -75 you can only make a personal contribution of you satisfy the work test. 

The non-concessional contributions cap for 2013–14 is $150,000.  If you are under 65 years old for at least one day of a financial year, you can ‘bring forward’ two years’ worth of contributions, giving you a total non-concessional contributions cap of $450,000 for the three years, rather than a $150,000 cap in each year of the three years.

This may enable you to:

  • Claim a Tax deduction if you are self-employed, up to $25,000 per year.
  • If you’re a low-to-middle income earner, the government could help boost your super savings through the super co-contribution and the low income super contribution.  However, if you claim a deduction for all of your personal contributions, you won’t be eligible for a super co-contribution.

Spouse contribution

A tax offset may apply to a spouse if a spouse makes a contribution to a non-working or low-income-earning spouse super fund, whether married or de facto.

 The spouse may be able to claim an 18% tax offset on super contributions of up to $3,000.  The maximum tax offset is up to $540 each financial year.