Category: Advisory

2018 is almost here and for many of us a new year represents a new start. A chance to really commit to giving something a red hot go. Most New Year’s resolutions involve losing weight, maintaining a healthier lifestyle, living life to its fullest and spending more time with friends and family.

While we can’t help you lose weight or with any of the above specifically, we can help with another common intention. If your New Year’s resolution is to get on top of your finances, we have come up with few tips to help you do just that.

TIP #1 – DO A BUDGET

Allocate some time to going through your finances. Look at where your money is going. This is now easier than ever with internet banking. Most providers give you the ability to view your overall spending. Breaking things down into categories such as groceries, transport and health, just to name a few. Keep an eye on the discretionary spending areas such as shopping, home, eating out and entertainment. Do you really need to go to Kmart this weekend? Or Bunnings to buy yet another spare Ryobi battery on the chance the lawn mower, chainsaw and blower vac all go flat at the same time?

TIP #2 – CUT DOWN ON TAKE-AWAY

Well this tip might actually be us helping you with the lose weight resolution. Being time poor is a frustrating part of being an adult. However, being organised doesn’t just come down to which particular Zodiac sign you belong to. Do some meal preparation on the weekends or in the least, plan the week ahead and get all of the dinner ingredients when doing the groceries.

TIP #3 – SEEK OUT A 0% INTEREST CREDIT CARD

Statistics from ASIC’s Money Smart Guide estimate that the average credit card debt per card holder is just over $4100.

For any existing debt, seek out and transfer the balance to a 0% interest rate credit card. There are plenty out there. Just make sure you set yourself up to pay it off within the 0% interest period. Cut up the old credit card or if you really need to keep it, reduce the limit.

TIP #4 – START A SAVINGS PLAN

Statistics from ASIC’s Money Smart Guide also suggest that 43% of Australian’s don’t have a clear financial plan.

When starting a savings plan it needs to be achievable. Even starting with something as simple as saving $1 for every week of the year. $1 in the first week, $2 in the second, $3 in the third and so on. If you did this for the entire year with $52 being the amount deposited in the final week, you will have saved $1300. Plus any interest. You will earn more interest starting with $52 in the first week, $51 in the second and so on.

TIP #5 – IF YOU HAVE A MORTGAGE, GET AN OFFSET ACCOUNT

If you don’t already have one. Putting your money into an offset account can cut years off your mortgage and save you tens of thousands of dollars. An offset account allows you the flexibility of having savings as well as using it to reduce the amount of interest you are paying on the balance of your mortgage. Instead of earning interest on that savings.

So there you have it. We wish you all the best in 2018 and hope that you successfully achieve any resolutions you challenge yourself to.

Want a more personalised approach to your financial plan? We can be there to assist you throughout your financial journey. We will help you set clear goals and implement a plan to achieve them in all stages of life.

Centrelink have begun pushing all customer contact away from face-to-face contact. They are encouraging customers to either go online through a MyGov account or call them directly over the phone. With this change some pensioners may be feeling a little overwhelmed with how they will continue to communicate with Centrelink.
We know not everyone is tech savvy, knowing exactly how to navigate their way online. Some individuals may not even own a computer or device capable of accessing a MyGov account. We certainly don’t want anyone spending half the day, pressing any number of options and waiting on hold just to speak with someone in Centrelink.

This is where we can help

If you or someone you know is in this situation, this is where we can help. We will meet with you twice per year, on the first visit you can authorise us to become your Centrelink nominee. This will then provide us with the ability to update all of your income and asset information with Centrelink. We will ensure you are getting the maximum benefits you’re entitled to as well as the peace of mind knowing it’s taken care of. There is also someone there to turn to should you have any questions.

If you would like more information on this or to schedule your first appointment, please call our office.

 Are you super ready for retirement?

It is a well-known fact that most women retire with less in superannuation than men. In fact, figures suggest it may be as much a half. According to the Hilda survey 2017, the average superannuation balance women retire with is $230,907. Other sources put this figure at considerably less. While the Association of Superannuation Funds of Australia (ASFA) Super Guru site states one in three women retire with no superannuation at all.
The reasons why are generally because:

1. Women often earn less than men. The gender pay gap currently sits at a record high of 18.8% according to data released by the Australian Bureau of Statistics.
2. Interruptions usually occur in a woman’s career by having children and raising a family.
3. As a result, women are also more likely to return to work on a part-time basis.

Having $230,907 in the kitty might sound like a decent amount of money but maybe not from a retirement perspective. ASFA currently estimates that in order for a single female around 65 years of age to live a comfortable lifestyle, their annual income needs to be $43,695. This is with the assumption that they own their own home.

What can you do?

That is a little confronting, so what can you do?

1. Consolidate and keep track of your super.
2. Check statements and make sure employer super contributions are getting paid.
3. Start thinking about super early, even in your 20’s. Make non-concessional contributions, even just an extra 1% for your entire working life. If you earn between $36,813 and under $51,813 in the 2017/18 year the government will match your contributions up to $500.
4. Spouse contributions. If a spouse has an income of $37,000 or less, a tax offset of up to $540 can be claimed for contributions made on their behalf to the super fund.

There are many reasons why women have smaller balances and additional strategies that can be implemented. If you would like to know more about what you can do in your situation, make a time to come in and have the conversation.

DISCLAIMER: The information provided is of a general nature only and not intended as specific financial advice. It does not take into consideration any pensions and additional income by the individual or returns, fees and charges incurred by the super fund. It also does not take into account the general health and lifestyle choices of specific individuals.

We’re all familiar with and most likely have some form of insurance. In most instances it’s probably for an asset such as your home or car and we understand the importance of having that protection in place as we’ve worked hard to acquire them.

But how many of us think to insure our biggest asset? Ourselves. Getting a form of personal insurance or knowing what you have and what you’re covered for is a key component of any thorough financial plan.

There are four types of personal insurance we should all know about; Life insurance, Total and Permanent Disability (TPD) cover, income protection and trauma cover.

All premiums are based on factors such as age, gender, health and the amount of cover you choose that best suits your budget.

Most of us understand Life insurance and may already have it through your super fund. Life insurance pays an agreed amount of money if you die or should be diagnosed with a terminal illness and have less than 12 months to live.

How much will I need?

As you get older your financial responsibilities change and it’s important to review your policy at these times.

However, things to consider could include how much is needed to reduce or pay off debts such as a mortgage, your children’s education or other major purchases and living expenses.

Total and Permanent Disability (TPD) cover pays a lump sum should you become disabled and are unable to work again. The most common TPD claims were paid for accidents, musculoskeletal disorders, cancer and mental illness.

TPD cover can also be a component of your super fund. A crucial feature of TPD is whether you choose cover for ‘own occupation’ or ‘any occupation’. While ‘any occupation’ applies when you are deemed unable to return to any form of work. With ‘own occupation’ it means you’re only unable to return to your regular line of work. It means a higher premium but may be relevant to those who work in a specialised field.

Wouldn’t I receive a disability pension?

In the event that you did become permanently disabled the disability pension would be of some assistance but most likely wouldn’t be enough to maintain your standard of living which TPD has the potential to provide.

Losing the ability to provide an income due to illness or injury is a scary thought for most, so why wouldn’t you protect it?

You may qualify for workers compensation if you were injured in the workplace, but private health insurance will only cover some medical expenses and you might have sick leave entitlements but is it enough to see out your recovery? Knowing that your lifestyle and family are looked after offers piece of mind and allows you to focus on getting better.

What are the benefits of income protection?

Income protection can provide you with up to 75% of your regular income until you are able to return to work and is yours to spend as you choose. You can vary your premiums depending on wait time and benefit periods. Premiums are also tax deductible if you hold them outside of your super fund.

Trauma cover is just as important but sometimes misunderstood. Like life insurance, trauma cover pays an agreed lump sum of money in the event that you should suffer a serious illness or injury. Most trauma claims lodged are processed quickly and paid once finalised without waiting periods.

Why would I need it?

The purpose of trauma cover is to help you make the necessary changes to your lifestyle and allow you focus on your recovery so you can return to everyday life.

This might include costs associated with additional therapy, rehabilitation equipment or it might give your partner the financial ability to take time off work to help aid you in recovery.

Some of the most common paid claims were made for breast cancer, heart disease, heart attack and prostate cancer.

A trauma cover policy has the flexibility to be taken out to protect you or someone you care about, such as a sibling. Generally, you can’t take out trauma cover through your super, but you can opt to bundle trauma cover with other covers held outside of your super fund such as life insurance, which may reduce your overall premium.

It’s not something we like to think about let alone plan for but the reality is illness and injuries can happen to anyone. With the advances in modern medicine, our ability to suffer from but survive serious illness or injury is increasing. Adding financial burden is the last thing anyone would need. Taking the time to review your cover or tailor a policy to meet your budget and circumstances is an important step to ensure you are protected in the event that it does happen to you or someone you love.