Estate Planning is not just for retirement 

Estate Planning is not just for retirement 

Updated on Finance

Many people think that Estate Planning is only for people who are close to retirement, especially if we fall into the trap of thinking that Estate Planning is just about getting a will. But did you know that Estate Planning addresses key protection strategies whilst you’re still alive? It doesn’t matter who you are, Estate Planning is for everyone.   What are the key pillars of Estate Planning?  Estate Planning is all about making sure that you get the choice as to what happens to you and your assets – whether that’s if you need someone to make decisions on your behalf, or you pass away and your estate needs to be divided up.   1. Advance Care Directive  Should something happen to you, and you are unable to communicate decisions about your medical care and treatment, an advance care directive allows you to:  As long as the directive is valid, it must be followed and cannot be overridden by medical professionals or family members.   2. Power of Attorney  A Power of Attorney allows a person who you nominate to make financial and legal decisions on your behalf if you lose capacity as a result of illness, injury or disability.   They can help ensure important financial and legal matters are handled without delay if you can’t manage them yourself – for example, paying your bills, managing your bank accounts, managing your investments and buying and selling property.  3. A Valid Will  Whereas the first two pillars ensure that important matters are handled in accordance with your wishes if you’re incapacitated, a will ensures that those same matters are handled in accordance with your wishes after your death. A will gives you the best chance of ensuring that your assets go where you want them to.   If you die without a valid will:  4. Superannuation   When you pass away, your superannuation is distributed to the person(s) you have nominated in the fund’s death benefit nomination. However, this may not be binding on the super fund, and if you haven’t nominated a beneficiary this could result in a lengthy process as the super fund trustee needs to decide who gets the money.   Superannuation is also not automatically included as part of your estate. The best way to ensure your super is distributed in accordance with your wishes is to nominate your legal personal representative. Your Executor will then be required to distribute your super according to your Will.   An estate plan gives you choice and control  Whilst growing your wealth is one part of a great financial plan, protecting your wealth in the event of your incapacity or death is just as important. Ensuring that your estate plan is in order gives you choice and control in how your affairs and assets will be handled, which in turn benefits both you and your loved ones. If you would like to explore your estate planning options, contact us to get started.   The information provided in this article is general in nature only and does not constitute personal financial advice.  

Frequently asked questions about super

Frequently asked questions about super

Updated on Superannuation

If the ins and outs of superannuation leave you confused, the answers to these frequently asked questions will help you understand the basics. How much do I need to retire? According to the Association of Superannuation Funds of Australia (ASFA), a couple requires savings of $640,000 if they wish to enjoy a ‘comfortable’ lifestyle in retirement. For a single, the figure is $545,000. How is my super taxed? Broadly, contributions are categorised as either concessional or non-concessional. Concessional contributions are contributions on which an employer or an individual has claimed a tax deduction. Non-concessional contributions are made from after-tax income. They include many personal contributions and government co-contributions. Concessional contributions are taxed at 15% within the super fund, with a tax offset available to low income earners. Non-concessional contributions are not taxed within the fund. How can I contribute to super? If you are over 18, employed, and earn more than $450 per month your employer will contribute 10% of your ordinary time earnings to super. You can further boost your super by: Asking your employer to make concessional salary sacrifice contributions from your pre-tax income. Making personal contributions from your after-tax income. Subject to set limits you may be able to claim a tax deduction for these contributions in which case they will become concessional. If no tax deduction is claimed they will be non-concessional. Low to middle income earners who make a personal non-concessional contribution may receive up to $500 as a government co-contribution. Age limits and work tests may apply to some types of contribution. When can I access my super? When you turn 65, even if still working. When you reach preservation age (between 55 and 60 depending on date of birth) and have retired. If you start a transition to retirement (TTR) income stream. If you face severe financial hardship, specific medical conditions or under the first home super saver scheme. Who can I leave my super to? If your super fund allows binding death benefit nominations, you can elect to have your superannuation paid to your legal personal representative. The money will then be distributed as instructed by your Will. Alternatively, you can instruct your fund trustees to pay your death benefit to one or more of your ‘dependents’. Under superannuation law these are: Your spouse (includes same-sex and de facto partners) Children A financial dependent People you had an interdependency relationship with Without a binding nomination, your super fund’s trustees decide which dependents will receive the death benefit. They will be guided, but are not bound by, any non-binding nomination. How do I make the most of my super? Superannuation remains, for most people, the best vehicle within which to save for their retirement. However, it can be complicated and there are numerous rules to navigate. That creates challenges, but it also generates opportunities, many of which can add thousands of dollars per year to your retirement income.   The information provided in this article is general in nature only and does not constitute personal financial advice.

Make this year a financially healthy one

Make this year a financially healthy one

Updated on Budgeting

Another year is over. Did you achieve everything you’d hoped? Are you better or worse off financially than you were this time last year? With a new year in front of you, what can you do to make the most of every moment? January to March Make a start by turning wishes into goals. Some might be long-term like becoming debt-free, saving a home deposit, or retiring in a few years’ time. What can you do this year to support those goals? Write it all down and give it a name. At the same time, don’t forget living for now. Prepare a month-by-month budget that makes room for the fun times – holidays and celebrations – as well as covering the necessities. Anticipate spikes in your spending. Do your car, home and life insurance premiums all seem to be due at the same time putting pressure on your cash flow? Investigate monthly premium payments or spreading renewal dates across the year. April to June It’s time to prepare for the end of financial year (EOFY). By June 30 you will want to have made any intended additional superannuation contributions (make sure you stay within relevant limits) and finalised donations to your favourite charities. Is there any other tax-deductible expenditure you can bring forward? June is also the month for EOFY sales – an opportunity to grab some bargains on early Christmas shopping and birthday gift purchases. Don’t forget to include these in your budget. July to September If you’re expecting a tax refund for the financial year just finished, lodge your tax return early. What are you going to do with the windfall? Whether you put it toward one of your goals or blow it on a big night out is up to you. Just make sure it’s part of the plan. With your tax return out of the way, the third quarter is a good time to start a bit of financial spring-cleaning. Review your super and savings, insurance and Will, loans and credit cards, Power of Attorney, and overall financial strategy. Is everything up to date? How’s your super doing? Would salary-sacrificing help? Can you consolidate debt or refinance at a lower rate? October to December Into the final quarter and how are you tracking? Are you ‘on plan’? Maybe the plan you came up with back in January wasn’t realistic. It’s not too late to adjust both your strategy and your expectations. If things are looking good, it’s important to stay focused. Christmas is looming with its temptations to over-spend. Once the turkey and plum pudding have settled, it’s time to review the year just gone and to give yourself a pat on the back for what you’ve achieved. Then take a deep breath, check your goals, and update the plan for the coming year.   The information provided in this article is general in nature only and does not constitute personal financial advice.

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