Is There A Realistic Pathway To $1.6m In Superannuation For Everyone?

From a purely academic perspective, achieving $1.6m in superannuation or something close to it, primarily depends on a range of factors including but not limited to contributions, earnings (net of fees) and the timeline to retirement.

The mistake many make is that they do not start taking action on their superannuation contributions or retirement planning until it is far too late.  Don’t let this happen to you!

To benefit from what Albert Einstein referred to as the eighth wonder of the world (compound interest), there is a need to start saving as early as possible and with additional tax effective contributions earning solid and consistent long term net returns.  You must definitely not make the mistake of starting too late with additional contributions or having poor net returns over the life of your investments.

The Australian Securities & Investment Commission (ASIC) publish a very useful calculator where you can play around with some scenarios associated with saving in superannuation for retirement and also funding a pension from your superannuation in retirement.  The calculators will hopefully shock you and spur you into action!

While there are some who suggest the current 9.5% Superannuation Guarantee is enough, we strongly disagree.  By simply relying on a handout from your employer as part of your total employment package you really are just setting yourself up for an underwhelming experience in retirement.

Retirement planning and superannuation are no different to many other important things in life: your personal contribution and efforts often determine in a very significant way the level of success.  If you do not make a meaningful contribution to the important things in life the outcomes will often be disappointing.

HOT TIP: Seize the moment, take control and make sure you have a goal for your superannuation and retirement.

#retirementgoals #superannuationsavings #netsuperannuationreturns #superannuationfees #superannuationgoals #financialadvicecanberra #financialadvisercanberra #financialplannercanberra

Disclaimer: The information in this post is of a general nature only and has been provided without taking account of your objectives, financial situation or needs.  No representation is given, warranty made or responsibility taken about the accuracy, timeliness or completeness of the information. Because of this, we recommend you consider, with the assistance of a financial adviser, whether the information is appropriate in light of your particular needs and circumstances.


Boosting Women’s Superannuation Is Extremely Easy But It May Require Some Pillow Talk!!

It is a well known fact that women often accumulate less superannuation than men over their working life due to many reasons including lower salaries and working less hours due to family commitments.

Any future initiatives by Government to boost women’s superannuation will be applauded but there are a few simple things that couples can already do every year to boost the superannuation balance of their spouse.

Salary sacrifice to superannuation is a very powerful tool that can be used to boost superannuation and a couple can determine who is best placed to initially implement this strategy.  A change in Legislation last year introduced an opportunity for anyone who is eligible to contribute to superannuation to consider a deductible super contribution.  This might initially benefit the higher income earner in the relationship but wait: there’s more!

After making salary sacrifice or deductible superannuation contributions, Superannuation Legislation allows members to consider splitting concessional superannuation contributions with their spouse in the following financial year.  There are a few conditions and the maximum that can be split is 85% of the previous year’s concessional superannuation contributions up to the cap.

Concessional superannuation contributions are superannuation guarantee, salary sacrifice and deductible contributions.

If you or your spouse are concerned about your superannuation balance, have a think about whether it makes sense to contribute and split concessional superannuation contributions each year to boost and equalise superannuation balances.  Additionally, for low income earners, look into and consider other contribution options such as spouse contributions, and personal non contributions to potentially qualify for the Government co-contribution to boost your superannuation balance further.

In summary, if you are looking at your superannuation contribution options, think holistically and make sure you consider if there are ways for you to tax effectively increase your current contributions and don’t forget to see if you can reduce your superannuation fees.

Unfortunately, superannuation is far more complicated that it needs to be so you will need to consider if you need advice.  This is a really big decision so give it plenty of thought before you choose a financial adviser.

What should you do next?  As its your super for your retirement, a good place to start is for you to get involved and take an interest.

#womenssuper #womenssuperannuation #financialadvicecanberra #financialadvisercanberra #financialplannercanberra #financialadvicedickson #financialadviserdickson #financialplannerdickson

Disclaimer: Do not trust what you read on the web.  Always seek professional advice before making investment decisions.


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.

#cssfinancialadvice #cssretirementplanning #cssredundancy #csstransferbalancecap #csssuperannuation #csssalarysacrifice #pssfinancialadvice #pssretirementplanning #pssredundancy #psstransferbalancecap #psssuperannuation #psssalarysacrifice

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.


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!

#CSSTransferBalanceCap #PSSTransferBalanceCap #DFRDBTransferBalanceCap #TransferBalanceCap #excesstransferbalance

The Effects Of The New Superannuation Rules Are Complex And Should Not Be Underestimated!!

On 23 November, the Australian Parliament passed the Super measures announced in the 2016 Federal Budget.

There are a number of significant changes being made to superannuation and a summary of some of the major changes is available via the following link:

The effects of the new superannuation rules are complex and should not be underestimated, but fortunately there are things you can do to minimise the effects. It is important that you take the time to understand the new rules and immediately make appropriate changes where required. It could be that urgent action is required before 30 June 2017 to ensure you are not disadvantaged.

If you are starting to think about your superannuation and retirement, or know you should be planning for your retirement, it is time to start taking action with a trusted financial planning advice discussion to “see what’s possible”. Perhaps you also know someone else who should be talking to us?

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 get things started, we offer a very cost effective Financial Advice Health Check discussion to ensure you can access our experience to understand all of your fees and future superannuation investment strategy options.

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

#1.6mcap #1.6milliondollarcap #superannuationcaps #superannuationchanges #retirementplanningcanberra

Don’t Be An April Fool: There’s Only Three Months Until The End Of Financial Year And You Have Plenty Of Things To Think About!

So what are some of the things you might need to think about before the end of the financial year?

April is a great month to review your salary sacrifice contributions and make sure you are on track to maximise the opportunity in the current financial year. If you have not made any salary sacrifice contributions in the current financial year, you still have time to make a solid start.  If you have been salary sacrificing and could do more, now might be a good time to think about ramping it up.

When it comes to tax effective superannuation contributions, there are a number of very simple strategies involving a drawdown from other assets to help you tax effectively contribute more than you might otherwise be considering.

April is also a great month to be thinking about splitting superannuation with your partner. Reasons to split super can vary but common reasons include equalising super balances or an age difference that means one of you is much closer to retirement.  You have until the end of June this year to split 85% of last financial year’s concessional superannuation contributions.

There are also personal contributions for the Government co-contribution and spouse contributions for the spouse rebate that might be worthy of further consideration depending on your circumstances and eligibility.

If you have sold an investment property or another asset and have triggered a capital gain, don’t forget you may be able to use superannuation contributions to assist with managing any capitals gains tax liability. You still have plenty of time to seek advice and think, plan and act.

There might also be things to prepay or purchase to bring forward a tax deduction in the current financial year. Make sure you start the conversation with your tax adviser before it is too late.

If you are self employed, don’t leave it to the last minute to plan and make your superannuation contributions. If you are planning a superannuation contribution, make sure it is received in your superannuation account well before the end of June.  We’ve seen it far too often where a contribution is delayed by an electronic transfer and the contribution ends up counting towards next year’s contribution limit and that can really stuff things up.

If you are thinking about superannuation contributions, don’t forget to review your superannuation fund fees. Believe it or not, there are options available that are more cost effective than the industry funds but few advisers will present them to you.

Finally, the 2016 Budget will be handed down on 10 May and it is difficult to predict how it might affect future investment decisions. There is a case for superannuation investors to bring forward their investment decisions in the hope that they can lock in some existing entitlements.  Time will tell if this approach has merit.

HOT TIP: Don’t turn into an April fool because you are time poor, lazy or disorganised.  As a minimum, take a moment to get some sound advice and plan your course of action for the three remaining months in the current financial year!

#superannuationadvice #superannuationcontributions #financialadvice