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The right financial plan can help you minimise the bad, make the most of the good times and protect against the unexpected.
After you've spoken to a financial adviser, he or she will provide you with your plan in a document called a ‘Statement of Advice'. It sets out your situation, goals and your adviser's financial recommendations. The Statement of Advice will vary from person to person because it has been written with your individual circumstances in mind.
Financial advisers will help you to grow your wealth by explaining a number of investment strategies including shares, property and bonds . They'll also look at strategies to protect your family and your wealth if you were hurt or even in the event of your death, such as life insurance and income protection .
Working with a financial adviser doesn't mean you hand over control of your financial plan. You'll always have the freedom to make decisions that you feel most comfortable with. But you can rely on your financial adviser to offer strategies and professional advice to help you make the right decisions.
Once you have made your financial plan, it's not the end of the story. As BT's Bryan Ashenden says, ‘One of the most important things is that your adviser can work with you to make sure that your plan is adjusted over time as your circumstances change so that you have the best possible chance for success.'
If you're interested in making a financial plan, BT can help you find an adviser who is right for you.
Get moving and book a complimentary initial meeting with a financial adviser.
Imagine always having spare income to add to your investment so that your money is constantly working harder for you? According to Simple Savings’ Jackie Gower, it’s not a pipe dream with these common sense tips for cutting expenses.
Curtailing your spending is no easy feat, especially if you have a family. But there are some simple ways to cut back that may mean a bigger investment portfolio.
Food
Usually the biggest bill in any household, but luckily, it’s one of the easiest to diminish. As the TV chefs always say, cooking at home is the key. “We know of families who’ve reduced their weekly food bill by as much as 50% as a result of menu planning,” Jackie reveals. Also, look beyond the supermarket. “Taking the time to shop around your local butcher and greengrocer can result in valuable savings.
Utilities
The answer to saving here, Jackie says, is to review and compare. Do your research and check out deals from different providers. This is not the most exciting task, but Jackie estimates one to two hours on the phone or online could save you several hundred dollars a year.
Petrol
Potentially another large household expense. “The best way to cut-back on petrol is not to use it. Walk, ride or use public transport whenever possible. Car-pooling is also a great cost-saver. Make a list of your errands over a fortnight and try to get them done in the same area at once.
Entertainment
Everyone automatically reaches for their wallet here, but fun can be reasonably priced, or even free. Check out exhibitions, markets, walks and local fairs. Host a movie or games night, or pack a picnic and head to the beach or a national park. And, instead of buying new toys, join the local library or toy bank if available. The kids can play with exciting ‘new’ toys as often as they like - for free,” she adds.
More thrifty hints...
If you’re terrible with money, downloading an app to track spending could be your salvation. “One tried-and-true app is Track My Spend” our expert says.
Finally, if you really struggle with self-control, many banks offer accounts with online-only access, or require you to go in to make a withdrawal. This can prevent you going on mad sprees with your EFTPOS or credit card.
The important thing is to take the first step, as Jackie affirms, “Aim as big or small as you like. Any saving is a good saving.”
Disclaimer
Past performance is not a reliable indicator of future performance. The information and any advice in this publication does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. This article may contain material provided directly by third parties and is given in good faith and has been derived from sources believed to be reliable but has not been independently verified. It is important that your personal circumstances are taken into account before making any financial decision and we recommend you seek detailed and specific advice from a suitably qualified adviser before acting on any information or advice in this publication. Any taxation position described in this publication is general and should only be used as a guide. It does not constitute tax advice and is based on current laws and our interpretation. You should consult a registered tax agent for specific tax advice on your circumstances.
What are my retirement options?
Most of us look forward to retirement. It’s a chance to explore new horizons, do all the things we never had time for when we were raising a family or pursuing a career, or just a time to relax and enjoy life at a more leisurely pace.
In fact, retirement can be pretty much what you choose it to be. That may mean hanging up your work boots for good. Or you may prefer to gradually ease yourself in to retirement by dialling back your working week. It could even be a time to choose your own hours by shifting into a consulting role. It certainly makes retirement a golden stage of your life and that makes it worth planning for.
When would you like to retire?
You may have plans to retire at a certain age, by a set date or following a particular event.
However for some of us, retirement could come around sooner than expected because of ill health, an inability to continue in a physical role or the need to care for a loved one.
The key point is that it pays to make plans for your retirement long before you’re ready to leave; you never know what lies around the corner.
Enjoying your retirement
Making retirement a truly ‘golden’ period of your life can hinge on making the most of your time. That doesn’t have to mean travelling the world on regular vacations. It can be as simple as joining local community groups, undertaking new studies to broaden your knowledge or spending more time with family and friends.
Talk to friends and family members for ideas on how they are spending time in retirement. Remember, these can be some of the most productive years you may ever have enjoyed.
Planning for a change in retirement
You may be thinking about a change of location or even moving overseas for your retirement.
While this may be the dream of a lifetime, be sure to think through any major moves – and not just from a financial perspective. Friends and family are very important as we age and it may not be easy to make new connections outside of a familiar community.
If you’re set on the idea of relocating, it can be worth renting for a year or so to be sure the reality lives up to your expectations.
Working out the cost
No matter what your plans for retirement, the reality is that it can involve something many people don’t have enough of – money.
Making some plans in advance for how much income you’re likely to have in retirement and how much your preferred lifestyle will cost is a key step in relishing your senior years.
A good starting point in planning retirement is determining your financial position. It’s a lot easier than it sounds. You may wish to start thinking about the value of your assets and liabilities.
Will the age pension be enough? Will you be comfortable with ‘comfortable’?
Many Australians aspire to have at least a ‘comfortable’ retirement. But what kind of annual income will you need to enjoy ‘comfortable’ by your standards? And how much does that mean you'll need at retirement?
According to the ASFA Retirement Standard for the June quarter 2017published by the Association of Superannuation Funds of Australia (ASFA), in order to enjoy a ‘comfortable’ retirement, singles at retirement (aged 65) will need an annual income of $43,696. Couples at retirement will need an annual income of $60,063. These figures assume the retiree(s) own their own home and do not pay rent or make mortgage payments.
By ASFA’s standards, a ‘comfortable’ retirement means you can go on one annual holiday in Australia, you can eat out regularly and afford bottled wine. See what else a comfortable retirement means. Looking at the list, you can see whether your definition of ‘comfortable’ matches with the ASFA’s standards. Planning to rely on the age pension could see your retirement dreams cut short. The pension is designed to support a very basic standard of living.
Plan your retirement out
If you’re considering retirement, it makes perfect sense to discuss it with us before stepping down permanently from the workforce. We can suggest strategies to give your super savings a last minute boost as well as advising you on investments to help maximise your retirement income.
Disclaimer
Past performance is not a reliable indicator of future performance. The information and any advice in this publication does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. This article may contain material provided directly by third parties and is given in good faith and has been derived from sources believed to be reliable but has not been independently verified. It is important that your personal circumstances are taken into account before making any financial decision and we recommend you seek detailed and specific advice from a suitably qualified adviser before acting on any information or advice in this publication. Any taxation position described in this publication is general and should only be used as a guide. It does not constitute tax advice and is based on current laws and our interpretation. You should consult a registered tax agent for specific tax advice on your circumstances.
You probably have a good idea of who you’d like to give your hard-earned assets when you’re gone. Making a will can help ensure your assets are distributed the way you want.
Many people see making a will as something to do when they have children or other dependents to worry about. After all, they want to make sure in the worst case scenario, their loved ones are well cared for. But what if that isn’t your life? What if you are single, or if you are in a relationship that may not be classified as de facto or a spouse relationship? Do you still need a will and what should it look like?
Where there’s a will, there’s a way
A will is a legal document setting out your wishes for distribution of your assets after you die and who you would like to be responsible for carrying out your wishes. Typically, it needs to be a written document which you’ve signed, had witnessed by two people and you need to be aged over 18 years old and considered to have the mental capacity to understand what you are doing for it to be considered valid. You should check whether your state or territory has any specific additional requirements to be valid.
You can write a will yourself using a kit – you can find a range online varying in price – or use a solicitor. Bear in mind, just because you’ve written a will and had it witnessed doesn’t guarantee it will be considered a valid document if it doesn’t meet legal requirements. Given the complexities, speaking to a solicitor may be helpful to ensure that your will meets the necessary criteria to be considered valid and that you’ve accounted for everything you need to.
No will left behind
The process and laws vary slightly from state to state if you die without leaving a will (known as dying intestate). Typically, the Supreme Court appoints an administrator (often your next of kin) to arrange your funeral, collect your assets, establish a family tree using certificate evidence and distribute the assets across your next of kin after paying any debts and taxes.
Your assets are distributed across your next of kin based on a specific formula. If you don’t have a legally recognised partner or children, the order of priority is usually your parents, your siblings (or their children), grandparents, aunts and uncles then first cousins. In some instances, others can lay claim to your assets. For example, if you regularly volunteered at a charity or regularly donated, they may be able to petition the court for a portion of your estate.
3 reasons to write a will
There are a number of reasons to write a will.
1. Choose where your assets go and who executes your will
Maybe you wanted your best friend to have your collection of art or your furniture go to a particular charity. Or you were happy to have your assets divided amongst family but wanted a cousin to inherit the bulk to help with their medical bills. If you leave it to the legal process, it’s less likely that any of these wishes will come to light unless your family specifically know of them and are happy to forgo their legally allocated shares to make it happen.
Dying intestate (without a will) also means a court-appointed administrator for your assets and organising your funeral. When you have a legally binding will, you can make sure the person organising your funeral and distributing your assets is someone you trust to carry out what you wanted. Where this can be important is in situations where there is a strained family relationship. Or you might feel a particular member is better suited to the pressure of managing grief and organising your estate than the person a court might choose to appoint. Not having a will at very least can delay the distribution of your estate, which could be difficult depending on costs that may be incurred from your death - such as the funeral.
2. A clear picture of your assets
This is something that can actually be useful to you right now. Taking the time to write a will can help you get across all your assets and debts – ranging from finances and investments to physical possessions. Understanding the complete picture can help you plan ahead for your own life (not just your death) and also manage any areas which might be a concern for you through a strategy.
Part of this might also include considering how any debts you’ve accrued would be paid in the event of your death. Usually, your assets are used first to pay any debts before being distributed to your beneficiaries. Depending on your debts, there might be proceeds left for your loved ones – or not. Any remaining debt after your assets have been used to cover debt does not pass onto your beneficiaries unless the debt is a joint one (in which case, the joint partner to the debt would have to manage it). A financial adviser can help you evaluate this and whether there are strategies, like life insurance, you could consider to manage your debts and keep your assets for beneficiaries.
3. Lessen the stress for your loved ones
A court process is stressful but combine that with the pressures of grief. Making a legally binding will can take some strain off your loved ones in a very difficult time for them – losing you. And it might give you the opportunity to offer some comfort beyond the grave where you’ve chosen to make certain bequests.
However you choose to approach writing a will, make sure it meets your hopes for distributing your assets and remember it’s okay to change your mind at any stage and many times through your life and write a new will. As part of this, don’t forget your superannuation might not always fall under your legally written will, so you might need to nominate any beneficiaries directly with your superannuation provider.
Disclaimer
Past performance is not a reliable indicator of future performance. The information and any advice in this publication does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. This article may contain material provided directly by third parties and is given in good faith and has been derived from sources believed to be reliable but has not been independently verified. It is important that your personal circumstances are taken into account before making any financial decision and we recommend you seek detailed and specific advice from a suitably qualified adviser before acting on any information or advice in this publication. Any taxation position described in this publication is general and should only be used as a guide. It does not constitute tax advice and is based on current laws and our interpretation. You should consult a registered tax agent for specific tax advice on your circumstances.
On 8 May 2018, the Government delivered the 2018-19
Federal Budget, and it would be reasonable to say that this Budget starts to
lay a foundation for the next Federal election.
The focus of the budget was building a stronger economy by creating jobs and guaranteeing essential services. As most households have had to tighten their budgets over the past few years, the Treasurer has announced that the Government must also live within its means. He said the Government has made real progress in getting the budget back on track and that it has stayed on track for a surplus for six successive budget updates.
From a pure financial planning and wealth perspective, the positive news from this year’s Budget is that the changes are minimal in number compared to prior years, and largely positive in nature. With changes to personal taxation thresholds and tax offsets from 1 July 2018 over a seven year period, measures to reduce possible erosion of super balances, particularly for low balance accounts, and allowing Age Pensioners to earn more before their pension is reduced, there is something for nearly everyone in this Budget.
As is always the case, these measures will need to pass through the legislative process before they become law, and may change during that process.
Following is a summary of some of the major proposals and how they may affect you.
Taxation
The major plank of taxation reform centres on the Government’s proposed “Personal Income Tax Plan”. Under this proposal, income tax relief will progressively be provided over a seven year period commencing 1 July 2018.
The main focus for the first four years from 1 July 2018 is the introduction of a new “Low and Middle Income Tax Offset”, the will provide a tax offset valued at up to $530. The maximum benefit will flow to those with taxable income ranging from $48,000 to $90,000, but there is some possible benefit if your taxable income is below $48,000 and also if it is up to $125,333.
In conjunction with this, changes will progressively be made to the marginal tax rate thresholds, with the ultimate goal of removing the 37% tax rate altogether. These changes are reflected in the table on the next page:
Resident marginal tax rates and thresholds (excluding Medicare levy)