Case Studies
Carry Forward Concessional Contributions
There are many ways individuals can contribute to superannuation. One of these is by making concessional contributions. Concessional contributions commonly include contributions made for you by your employer, salary sacrifice contributions and personal contributions that you claim as a personal tax deduction. [Read More]
Want To Build Your Superannuation and Need A Tax Deduction?
Make sure you maximise your concessional contributions before 30 June 2020.
Concessional contributions are those that are made into superannuation on a pre-tax basis. This includes employer contributions, any salary sacrifice contributions, and any personal contributions deposited into superannuation, for which a tax deduction is claimed. [Read More]
Work Test Exemption for Recent Retirees
From 1 July 2019, new legislation came into force which provides a one-year work test exemption for eligible retirees that enables them to make superannuation contributions. The measure has been designed to give individuals with lower superannuation balances more time to make contributions into superannuation after they have retired.
Under previous legislation, individuals aged 65 – 74 must satisfy the work test to make voluntary superannuation contributions including personal non-concessional, personal concessional, salary sacrifice and spouse contributions made by the member’s spouse. [Read More]
Residential Aged Care
All too often, we procrastinate over financial decisions and panic when the event occurs. This is an all too common scenario for aged care. A move into aged care usually happens in a hurry and with emotional turmoil, but planning can help to improve the situation.
Individuals are often faced with making decisions for a parent or other elderly relative. Good quality financial advice is a crucial element of these decisions. Aged care is a growing issue for many Australians, and the correct advice is of critical importance. [Read More]
New Means Test Treatment of Lifetime Income Streams
On 14 February 2019, the Government passed legislation amending the means testing of lifetime income streams commenced on or after 1 July 2019.
The changes are intended to encourage people to use their retirement savings in a way that supports their needs and helps manage the risk of running out of money as they get older. [Read More]
DOWNSIZERS CONTRIBUTIONS
Effective from 1 July 2018, if you are aged 65 or over, and you sell your principal home, you could be eligible to make a downsizer contribution of up to $300,000 ($600,000 combined for a couple) into your superannuation account.
The key benefit of the downsizer contribution is the ability to invest the sale proceeds of a primary residence into the concessionally taxed super environment when over age 65 without having to meet the work test or contribution caps. [Read More]
DON’T LEAVE SAVING FOR RETIREMENT TOO LATE!
More often than not, when people begin to consider their retirement plans, they usually have a five-year time frame in mind. While five years may seem like a lot of time when thinking about your future working arrangements, given the ever reducing contribution caps over the last few years, this is not a significant amount of time to maximise your retirement savings. [Read More]
THE $1.6 MILLION TRANSFER BALANCE CAP – DO I LEAVE THE EXCESS FUNDS IN SUPERANNUATION OR NOT?
Prior to 1 July 2017, an individual could have an unlimited amount of money invested in superannuation and if running a pension, pay no tax on any income or realised capital gains.
This created an attractive investment vehicle, especially when comparing the taxation rates in other entities, such as an individual’s personal taxation rate or company taxation rates.[Read More]
TRANSITION TO RETIREMENT PENSIONS – ARE THEY STILL WORTH IT?
Like the name suggests, Transition to Retirement (TTR) Pensions are a form of income stream commenced from superannuation funds, with the intention of assisting a person to move from full time to part time employment without forgoing any loss of income.[Read More]
SEQUENCING RISK
Our superannuation system is based on Australians building up funds during our working lives and then drawing down on it in retirement. For young accumulators, when the level of savings is small, maximising returns matter the most as you are able to weather market fluctuations over the long term. However, as your accumulated funds grow larger as you approach retirement, there is a greater focus on the short-term because unfavourable market conditions can lead to catastrophic results.[Read More]
THE ADVANTAGES OF TRANSFERRING ASSETS INTO A SELF MANAGED SUPER FUND
In the May 2016 edition of Trade Secrets, we discussed the benefits of transferring assets held in your personal name, to a Self-Managed Superannuation Fund (SMSF).
The ability to transfer assets into an SMSF is a unique advantage that SMSFs have over most public-offer and retail funds. There are restrictions on the types of assets held in a person’s name which can be transferred into superannuation. However, the most commonly transferred asset from a person’s name to their SMSF is listed shares.[Read More]
YOUR ASSETS AND CENTRELINK’S ASSET TEST
As you may recall, there are two tests that Centrelink apply, when determining a person’s Age Pension entitlements. They are the Asset Test and the Income Test. The amount of Age Pension that a person will receive is determined by the test that produces the lowest Age Pension entitlement. [Read More]
DEEMING OF ACCOUNT BASED PENSIONS AND THE IMPACT TO THE AGE PENSION
As you may be aware, when determining a person’s Age Pension entitlements, Centrelink apply two tests – an Asset Test and an Income Test. In true government style, the test that produces the lowest entitlement dictates how much Age Pension a person will receive.
On 1 January 2015, a legislated change in the assessment of a person’s superannuation Account Based Pension (ABP) under the Income Test, came into effect. No change was made to the assessment of ABPs under the Asset Test. [Read More]
TIMING YOUR RETIREMENT
Many of our clients often ask us the question: When is the best time to retire?
To the extent that you are able to “plan” your retirement, this can depend on a range of complex and competing factors, many of which resolve around taxation and the ability to contribute to superannuation. [Read More]
THE COST OF NOT GETTING GOOD FINANCIAL ADVICE
Michael and Glenys were referred to our firm recently as Michael was about to turn 55.
We explained to Michael and Glenys there are a range of strategies they should consider. Whilst complex, this is a perfect example of the potential cost of not getting good advice. [Read More]
WHAT YOU REALLY NEED TO FOCUS ON IN RETIREMENT
This is a case study regarding a potential new client that was referred to us in the early months of 2008, just before the GFC really set in.
When we reviewed the portfolio, we concluded that it was of fairly poor quality and not suitable for someone in the retirement phase. There wasn’t enough focus on income generation, and the portfolio was poorly diversified.
We believe that if you focus your attention on income generation, and don’t worry about capital movements, up or down, it’s only on paper, and you only lose money if you sell at a price lower than your purchase price. [Read More]
INSURANCE INSIDE SUPERANNUATION
Two of the more common types of insurance that can be used to provide financial protection for you and your family are Life and Total and Permanent Disability (TPD) insurance. These insurances can be held either inside or outside superannuation. This case study investigates whether it is better to own life and TPD insurance inside of superannuation. [Read More]
THE NON CONCESSIONAL CONTRIBUTIONS CAP
The non-concessional contributions cap was introduced to place a limit on the amount of after-tax contributions an individual can make into superannuation each Financial Year without incurring excess contributions tax. However, the non-concessional contributions cap still provides some flexibility, including for some individuals the opportunity to maximise their contributions to superannuation through the use of the bring-forward provisions. This case study discusses the strategies to maximise non concessional contributions. [Read More]
THE RE-CONTRIBUTION STRATEGY
As the name suggests a re-contribution strategy involves the withdrawal of your superannuation benefits and the contributing of these benefits back into your super fund. Why would you go about this process you may ask? The objective of the re-contribution strategy is to maximise the tax free component of your super income stream and/or your super death benefit. This case study investigates the benefit of a super re contribution strategy. [Read More]