Don’t be broke before Christmas

No time like Spring time to get in a quick Spring Clean – and this is no different for your finances.

So, to ensure you can get a jump on Your Financial 2017, Perron are sharing 6 super simple tips for getting your finances ready for Summer and making 2017 the best year yet. Check out the First two here and check in for upcoming tips.

Claim your Super Money – You worked for it

According to the ATO there are over 5.7 million super accounts lying around#. Even crazier – these accounts are holding over $14 Billion of super!

The problem with lost accounts is that your super could simply disappear over time – account fees, insurance premiums and taxes all reduce your account.

Did you know?find my super

  • While super funds receive concessional tax treatment, your account is still subject to taxation – potentially both income tax and capital gains tax. Just like it is important to understand the fees you pay in your super account, you should consider how much tax you pay.
  • If you want to live a comfortable retirement*, you will need to have assets that can provide an annual income of $59,808 pa (for couples) or $43,538 pa for a single person. How much income do your assets generate for you today?
  • A small percentage difference in fees can have a Massive impact on the amount of money you can draw from your super fund at retirement – according to Money Smart a 1% increase in fees could see a 20% decrease in your account balance over 30 years! To see the difference yourself, you can try the government Money Smart Retirement calculator**.

What to do?

  1. If you can’t find your old super statements lying around, why not do a lost super search using the ATO super tool.
  2. Once you’ve found your super, find out the fees you pay, the insurances you hold and the type of investments you are invested in.
  3. Once you’ve obtained this info, consider consolidating your funds. So you can keep track of your accounts and ensure you aren’t paying too much on fees and insurances, it might be worthwhile rolling all of your funds into one account. Just make sure you understand how your accounts are setup first.
  4. If this seems daunting or you aren’t sure of what you are doing, you can always speak with financial planner, who can do the whole lot for you.
    The great thing is, you might be able to pay your financial planner using some of the superannuation money you have found.

Get your Affairs in Order

Wills, beneficiary nominations, medical directives – these are really important documents to have in place should you pass away or be unable to make decisions for ourselves. Unfortunately, to many people wait too late to get these things in order.

What do they do?estate-planning

  • Wills: A Will outlines who should receive your assets and other possessions should you pass away. A Will can also outline who should look after your children and how your remains should be treated.
  • Medical Directive: This expresses how you would like to be treated, should you be unable to provide direction yourself. Say you are in a coma and you have suffered severe trauma to your brain – would you want to continue to live on life support or would you prefer you didn’t? Without a medical directive someone else may make that decision for you.
  • Beneficiary nomination: In your super fund you can request who will receive your superannuation benefits should you pass away. However, there are important rules around who can receive your super and the type of nominations you can make.

What to do?

  1. Talk to your close ones. It can be helpful to talk through your decision with your loved ones, especially if they are going to be beneficiaries. It also helps to explain your medical directive choices with your family – after all, these decisions are not often taken lightly.
  2. Talk to a professional. A solicitor who specialises in Estate Planning is a great place to start. You may be advised to see a GP for a medical directive and a financial planner can assist you in understanding who to pick as a valid superannuation beneficiary.
  3. Implement and update. Some of these documents need to be updated on a regular basis – some beneficiary nominations expire after three years, others should probably be reviewed every couple years or when you have a significant change in your life – such as a Will. The important thing is to ensure your documents are up to date and in line with your wishes.

 

First 2 Tips done! Easy right? Keep your eyes peeled for next month’s Tips. If you have any questions, feel free to give us a call or send us an email. We’d love to hear from you.

Sources 

These links have been provided for information purposes only and will take you to external websites, which are not connected to Perron Financial Group  or Charter Financial Planning in any way.

Note: Perron Financial Group  and Charter Financial Planning does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

#ATO Report “Super accounts data overview” Last modified 15 August 2016. The article can be seen Here

*AFSA Retirement Standard As at December Quarter 2016. This can be seen Here

^Money Smart “Super Fees” Available Here

**Caution: These calculators are provided byMoneySmart and are not provided, approved or endorsed by Charter Financial Planning. Using these calculators may provide a useful starting point.  However, they are guides only and do not constitute expert, licensed financial advice. Calculators should not be used as the basis for any financial or investment decision. You can build a full understanding of your financial position by working with a qualified financial planner to develop a plan based on your personal situation. Contact us for advice tailored to your goals and needs.

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