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

 

The Latest Superannuation Cap Changes Are Terrible News For Defined Benefit Pensioners!!

The new rules for superannuation and pension Transfer Balance Caps will reshape the way some Defined Benefit Pensioners approach their personal superannuation contributions and overall superannuation entitlements. Some will even have the right to make personal contributions to superannuation taken away from them forever!

The Government has chosen to use a very large multiple to apply to Defined Benefit Pensions when determining the amount recorded against the Transfer Balance Cap. Some consider the multiple used is extravagant and when other pension and superannuation accounts are included it is quite easy for Defined Benefit Pensioners to reach and breach the $1.6m Transfer Balance Cap.  Some senior executives will breach the $1.6m Transfer Balance Cap with only their Defined Benefit Pension and tax penalties will apply.

More than ever before, current and former Defined Benefit Pension recipients (such as CSS, PSS, DFRDB, MSBS and many others) need to look carefully at their situation when it comes to contributions, superannuation accounts and entitlements but they should not leave it until the last minute if they are likely to be affected. The new rules take effect on 1 July 2017 and penalties can apply for breaches but fortunately there are strategies to be considered to improve the situation.

The Government and Australian Taxation Office are expecting affected Defined Benefit Pensioners to take all necessary actions with all of their superannuation entitlements before 1 July 2017 to avoid financial penalties.

If you are a current or former member of the CSS, PSS, DFRDB or MSBS who is not sure what the latest superannuation Transfer Balance Cap changes might mean to you and all of your superannuation entitlements, you should consider contacting us. New client places are strictly limited but to get things started, we can offer a very cost effective Financial Advice Health Check discussion to ensure you can potentially access our experience to understand all of your future superannuation investment strategy options.

HOT TIP: The need for honest, transparent and practical financial planning advice has never been greater, so contact The Financial Advice Shop without delay to see how we can help you.  We enjoy working with people who want to be successful and will do all we can to make your success a reality.

We have never had anyone say that our Financial Advice Health Check wasn’t value for money and we won’t deal with anyone where we can’t add value! If you are referred by someone we know, you will even get a discount!

www.financialadviceshop.com.au

#CSSTransferBalanceCap #PSSTransferBalanceCap #DFRDBTransferBalanceCap #TransferBalanceCap #excesstransferbalance

The Latest Superannuation Cap Changes Are Terrible News For Defined Benefit Pensioners!!!

The new rules for superannuation and pension Transfer Balance Caps will reshape the way some Defined Benefit Pensioners approach their personal superannuation contributions and overall superannuation entitlements. Some will even have the right to make personal contributions to superannuation taken away from them forever!

The Government has chosen to use a very large multiple to apply to Defined Benefit Pensions when determining the amount recorded against the Transfer Balance Cap. Some consider the multiple used is extravagant and when other pension and superannuation accounts are included it is quite easy for Defined Benefit Pensioners to reach and breach the $1.6m Transfer Balance Cap.  Some senior executives will breach the $1.6m Transfer Balance Cap with only their Defined Benefit Pension and tax penalties will apply.

More than ever before, current and former Defined Benefit Pension recipients (such as CSS, PSS, DFRDB, MSBS and many others) need to look carefully at their situation when it comes to contributions, superannuation accounts and entitlements but they should not leave it until the last minute if they are likely to be affected. The new rules take effect on 1 July 2017 and penalties can apply for breaches but fortunately there are strategies to be considered to improve the situation.

The Government and Australian Taxation Office are expecting affected Defined Benefit Pensioners to take all necessary actions with all of their superannuation entitlements before 1 July 2017 to avoid financial penalties.

If you are a current or former member of the CSS, PSS, DFRDB or MSBS who is not sure what the latest superannuation Transfer Balance Cap changes might mean to you and all of your superannuation entitlements, you should consider contacting us. New client places are strictly limited but to get things started, we can offer a very cost effective Financial Advice Health Check discussion to ensure you can potentially access our experience to understand all of your future superannuation investment strategy options.

HOT TIP: The need for honest, transparent and practical financial planning advice has never been greater, so contact The Financial Advice Shop without delay to see how we can help you.

We have never had anyone say that our Financial Advice Health Check wasn’t value for money and we won’t deal with anyone where we can’t add value! If you are referred by someone we know, you will even get a discount!

www.financialadviceshop.com.au

#CSSTransferBalanceCap #PSSTransferBalanceCap #DFRDBTransferBalanceCap #TransferBalanceCapDefinedBenefit #TransferBalanceCap #excesstransferbalance