The new superannuation changes came into effect on 1 July 2017 and for members of Defined Benefit Superannuation schemes like CSS and PSS these changes are significant.

One area that has some complexity is the area of salary sacrifice. It is an area that many members of CSS and PSS ignore to their detriment but for those who are serious about improving their financial situation in retirement it is very important to thoroughly understand the new rules.

The cap for concessional contributions was reduced to $25,000 on 1 July 2017. At the same time a notional amount was included in the new concessional contribution cap for members of Defined Benefit Superannuation schemes like CSS and PSS.  Additionally, for members of the Defined Benefit Superannuation schemes like CSS and PSS, there is also Productivity component that needs to be factored into the concessional contribution cap calculation.

A final and important change to concessional contributions relates to the removal of a restriction that previously prohibited employees from making deductible superannuation contributions. This change in Legislation has created a new and simpler way for employees to tax effectively contribute to superannuation to boost their retirement savings through the making of deductible superannuation contributions.

At The Financial Advice Shop we enjoy assisting CSS and PSS members to ensure they are on track to maximise and optimise their total superannuation entitlements and we do this through a cost effective Financial Advice Health Check. As part of a Financial Advice Health Check we will discuss the importance of you optimising your superannuation contributions to improve your final retirement position in a range of scenarios.

If you take the time to visit The Financial Advice Shop home page it will not take you long to realise we are a superannuation expert in many areas. You will also be able to access links to our dedicated CSS and PSS web pages that offer a range of tips and traps that CSS members and PSS members might like to consider. If you have questions, we have the answers.

If you, or someone you know requires further assistance, please feel free to contact us and we will see how we can help.

www.financialadviceshop.com.au

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Why Is The PSS Contribution Rate So Important For A Successful Retirement?

The PSS rules allow contributing members to contribute at 0% or between 2% and 10% but few people truly understand the financial implications of contributing at the wrong rate. The reality is that the wrong contribution rate can ruin your retirement because the employer contributes less.  This is great news for the employer but a disaster for the PSS member.

At The Financial Advice Shop we are determined to assist PSS members to ensure they are on track to maximise their PSS entitlements and we do this through a cost effective PSS Financial Advice Health Check. By maximising your PSS entitlements you will be making sure your employer has to maximise their contributions on your behalf.

Our dedicated PSS webpage has a range of tips and traps that PSS members might like to consider. If you have questions, we have the answers.

If you, or someone you know needs further assistance, please feel free to contact us and we will see how we can help.

http://www.pssfinancialadvice.com/pss-tips—traps.html

#pssfinancialadvice #pssretirementplanning #psstransferbalancecap #psssuperannuation

 

Use Lower Fees To Combat The Negative Effects Of The New $1.6m Transfer Balance Cap!

The new superannuation changes came into effect on 1 July 2017 and for wealthy superannuation investors and members of some Defined Benefit Superannuation schemes these changes are significant.

As the Australian Taxation Office starts to notify individuals that they have exceeded their Transfer Balance Cap, there is a steady trend developing. Breaches of the Transfer Balance Cap are a major issue for a range of retirees and members of defined benefit superannuation schemes like CSS and PSS.  It is also a major issue for senior long serving members of MSBS and DFRDB.

With all changes there are however opportunities. In the last five years the cost of superannuation investments have been falling but unfortunately superannuation members have not all been making changes to benefit from fee savings that are now available.

If you have exceeded your $1.6m Transfer Balance Cap then it is not all bad news. While a significant restructure of your investments may be required and you may end up paying some additional tax on earnings for the future, an excellent way to minimise the effects of the additional tax is to make sure you explore every opportunity to save fees on your superannuation investments.

Let’s consider a hypothetical example where an investor has superannuation investments of $2,000,000 and you could save 0.5% p.a. on fees ($10,000 p.a.). The fee savings in this example will likely more than compensate for an increased 15% tax on earnings for the $400,000 in excess of the $1.6m Transfer Balance cap.  A typical $400,000 portfolio earning 6% per annum could equate to around $3,600 p.a. in tax if taxed at 15%.

The latest superannuation changes are potentially really good news if you take the opportunity to seek a second opinion on your current superannuation arrangements and financial planning strategy.

With all of this complexity, isn’t it great to know that our business, The Financial Advice shop, has expertise available to help you make sense of all this and can provide assistance where required. If you feel you might benefit from a Financial Advice Health Check, a review of your Transfer Balance Cap situation or a second opinion on your current superannuation and financial planning strategy as a result of the latest superannuation changes, contact us without delay.

In a complex world, there has never been a better time to contact us to see how your financial situation could be improved.

http://www.financialadviceshop.com.au/financial-advice-second-opinion.html

 

What Are Notional Employer Contributions To Superannuation All About?

The new superannuation changes take effect from 1 July 2017 and for members of some Defined Benefit Superannuation schemes these changes are significant.

If you are a member of a Defined Benefit Superannuation Scheme and do not know what the implications of a Notional Employer Contribution are, you need to get some urgent advice as it is important for a number of reasons.

For members of the Commonwealth Superannuation Scheme (CSS) and the Public Sector Superannuation (PSS) Scheme, things are about to change significantly, and for the worse. Until 30 June 2017 the unfunded portion of employer contributions to the CSS and PSS for contributing members are ignored for the purpose of determining their Concessional Contribution Cap, but that is about to change from 1 July 2017.

From 1 July 2017 a notional employer contribution for CSS and PSS members will be reported to the Australian Taxation Office and with the associated reduction in the annual Concessional Contribution Cap to $25,000, salary sacrifice contributions may need to be scaled back significantly. For PSS members, the Notional Employer Contribution is also affected by the member’s personal contributions which also have a significant effect on final retirement benefits.

For members of the CSS and PSS, the calculation to determine the maximum amount that can be salary sacrificed to superannuation is about to become more complicated. CSS and PSS members who are currently maximising their salary sacrifice entitlements will also need to account for the fact that their last payday for this financial year falls on 29 June 17.  There is therefore a real risk that the last salary sacrifice payment from this financial year may be received by their superannuation after 30 June and count towards next year’s concessional contribution cap of $25,000.

With all of this complexity, isn’t it great to know that our business has experts available to help you make sense of all this and can provide assistance where required. If you feel you might benefit from a Financial Advice Health Check in preparation for the latest round of superannuation changes that commence on 1 July 2017, contact us without delay.

A Financial Advice Health Check for members of the PSS is particularly important as it has been our experience that many members are not maximising their entitlements. In this situation, a Financial Advice Health Check has the potential to add tens of thousands of dollars to a member’s final retirement entitlements.

In a complex world, there has never been a better time to contact us to see how your financial situation could be improved.

http://www.financialadviceshop.com.au/latest-superannuation-changes.html

It’s Time For Public Servants In The CSS And PSS To Take Notice Of The Latest Superannuation Changes!

The new superannuation changes take effect from 1 July 2017 and for members of some defined benefit superannuation schemes these changes are significant.

For members of the Commonwealth Superannuation Scheme (CSS) and the Public Sector Superannuation (PSS) Scheme things are about to change significantly, and for the worse. Currently the unfunded portion of employer contributions to the CSS and PSS for contributing members are ignored for the purpose of determining their Concessional Contribution Cap, but that is about to change!

From 1 July 2017 a notional employer contribution for CSS and PSS members will be reported to the Australian Taxation Office and with the associated reduction in the annual Concessional Contribution Cap to $25,000, salary sacrifice contributions may need to be scaled back significantly.

For members of the CSS and PSS, the calculation to determine the maximum amount that can be salary sacrificed to superannuation is about to become more complicated. CSS and PSS members who are currently maximising their salary sacrifice entitlements will also need to account for the fact that their last payday for this financial year falls on 29 June 17.  There is therefore a real risk that the last salary sacrifice payment from this financial year may be received by their superannuation after 30 June and count towards next year’s concessional contribution cap of $25,000.

With all of this complexity, isn’t it great to know that our business, The Financial Advice Shop, has experts available to help you make sense of all this and can provide assistance where required. If you feel you might benefit from a Financial Advice Health Check in preparation for the latest round of superannuation changes that commence on 1 July 2017, contact us without delay.

In a complex world, there has never been a better time to contact us to see how your financial situation could be improved.

http://www.financialadviceshop.com.au/latest-superannuation-changes.html

 

Perhaps There Really Is A Simple Way For First Home Buyers To Access Their Super That Makes Sense?

If we think outside the square a little bit and consider using super as an investment for first home buyers rather than a deposit, then perhaps some different approaches could be seriously considered?

A lot of the discussion to date has been aligned with using super as a deposit. One of the main problems with this approach is that it is very inconsistent with the purpose of super.

If we were to consider the use of super as an investment it might make more sense?

Consider the following example:

A first home buyer couple have $50,000 in their super and they use these funds as an investment in their first home which they purchase for $500,000. The super proceeds represent a 10% initial investment and is registered accordingly.

If a framework was Legislated that stipulated that the super fund proceeds (in this example representing the 10% investment) must be repaid to the couple’s super accounts, in proportion, when the property is eventually sold then perhaps the whole idea might make sense? This idea could be integrated into other first home buyer initiatives and might for example encourage first home buyers to salary sacrifice to super in preparation for buying their first home?

In this example, if the property was eventually sold for $600,000 then $60,000 would be returned to the couple’s superannuation accounts.

Clearly some changes in super Legislation would be required but the first home buyers could benefit from having access to more money to buy their first home, it might encourage them to stay in their first home for longer and their super eventually gets a material boost as long as the property is sold for a profit.

Unfortunately this idea does have some downside as it would increase demand from a wider pool of desperate first home buyers in a property market that is already overheated in some areas.

There can, however, be no doubt that creating a generation of Australian’s who cannot get into the property market is bad for our society on a range of levels.

www.financialadviceshop.com.au

 

10 Important Reasons Why Financial Advice Decisions Should Always Involve A Second Opinion

Our dedicated web page will give you an insight into Financial Advice and provides 10 major reasons why a second opinion from us could change your life.

To read more, click on the link below:

www.financialadviceshop.com.au/financial-advice-second-opinion.html