Viewing posts from: April 2017

6 Smart Ways To Build Savings

All / 28.04.20170 comments

The word “thrifty” is rarely thought of in a positive sense but that’s not fair because if we continually spend more than we earn, our debts will eventually catch up and other words such as “default” or “bankrupt” might become more familiar.

Being thrifty doesn’t mean doing without – quite the opposite. Here are six simple tips to build up your savings.

  1. Create a budget and stick to it

Before you can get your spending under control you need to know exactly what your income is compared to how much you spend. There are many free online budgeting tools available, such as the MoneySmart Budget Planner found at www.moneysmart.gov.au.

Recording every purchase as you get started is an interesting exercise. At the end of every month, add up all of your purchases and compare them to your budget. It could be surprising to see where your cash is actually going.

  1. Be debt smart

Make a list of your debts and organise them in order of annual interest rate. Those with the highest rates (most likely your credit cards) should be paid off first, especially as the debt is not tax-deductible. It rarely makes financial sense to invest money to receive 8% pa while you are paying credit card interest of 20% pa.

  1. Time for a mortgage check-up?

Like all things, mortgage products change – particularly with interest rates at record lows. If you are more than five years into your mortgage, it could be time for a review. Check with your lender to ensure you’re getting their best rate. You might be astonished at the deals lenders are prepared to do to keep your business.

  1. Get creative in the kitchen

Have you looked deep into your kitchen pantry lately? At least once a week gather up the household and get creative. Brainstorm how to use some of the existing ingredients from your pantry and fridge (those that are still edible!) in new and different ways. This creative exercise will not only be fun, but will save on your grocery bills.

  1. Switch and save

When was the last time you compared costs on your home/health/car insurance, phone plans, gas and electricity? By shopping around and negotiating a better deal you could save significant dollars on your monthly spend. There are helpful websites to make comparison shopping much easier but be aware that they only list providers who have paid to be promoted on their sites.

  1. Be organised!

Most people are amazed at how many gifts they buy each year, often at the last minute. By establishing a gift list and allocating a set budget for each recipient well ahead of time, you can progressively buy gifts on sale during the year. This will certainly help your cash flow and circumvent overspending by avoiding that last minute rush.

As you watch your bank balance increase, enjoy the feeling of being in control and knowing you can have whatever you want with just a little discipline.

For more information or to speak to one of our Financial Advisers please contact TNR Wealth Management on 02 6621 8544.

 

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.

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What do the financial headlines really mean?

All / 21.04.20170 comments

Headlines are designed to grab the readers’ attention and sell news but often don’t accurately reflect the content of the article. Financial headlines can result in misinformation and investor panic. This article explains why it’s important to seek professional financial advice before hitting the panic button.

I’m the first to admit I’m no expert when it comes to horse racing, so hopefully you’ll forgive my ignorance. During my daily read of the major newspapers, I came across this headline in a major Australian paper:

“Trailblazer equals Phar Lap’s winning streak with triumph at Flemington.”

Wow! I thought. After 80 years, the mighty Phar Lap has been equalled!

Phar Lap’s legend has been passed through every Australian generation. According to Melbourne Museum, his exhibit continues to be its most popular. Intrigued, I read the article.

Only then did I discover that Phar Lap’s record of 14 consecutive wins has been beaten many times – Trailblazer being the most recent in a string of successful horses, including the famous Black Caviar with 25 wins.

That newspaper headline cunningly grabbed my attention, yet having read it, I felt betrayed somehow… even foolish.

It reminded me of an urgent call I’d received recently from a client. Brett is one of those guys you speak to a couple of times each year to review his portfolio – until one day a couple of months back.

Brett had seen this headline on a national news site:

“Australian shares slump amidst global economic fears, $30 billion wiped out.”

He was in a bit of a panic so I immediately checked out the article.

Sure, global markets were in turmoil over political uncertainty, but the article explained Australian shares had, “…slumped to five-and-a-half week lows.”

Excuse me?

If the markets had slumped to say, five-and-a-half year lows, Brett’s concerns might be justified.

In fairness, the article elaborated, identifying sector fluctuations and quoting figures. Too late for Brett who was already spooked and suggested selling his shares to buy fixed interest assets before his losses became greater.

Brett is not alone. Time-poor, many people scan headlines and subsequently make financial – or other – decisions in haste.

Recently, I read this headline in the financial press:

“Capital gains tax increase set to push up property prices.”

My immediate concern was that I hadn’t realised Capital Gains Tax (CGT) was rising. Reading further, I discovered the article was speculative; talks were taking place to determine whether current tax breaks should be cut.

The headline had captured my attention, but the reality of the situation was not as worrying as I’d first thought.

It pays to get the facts, right?

Fortunately, Brett contacted me before taking action. I was able to calm him down by giving an overall picture of the global situation and relate it specifically to his investment portfolio and personal strategy.

Anyone with horse racing expertise would have laughed at my naïve conclusion about Phar Lap, and but for a temporary red face, I’d have recovered.

Conversely, had Brett not consulted me, and acted on his impulse of selling his shares, his outcome may have been quite different.

They say the devil’s in the detail, and it certainly holds true for most things in life which is why we see a doctor if we’re sick, or a mechanic if the car’s playing up.

Accordingly, we should never underestimate the value of professional financial advice.

For more information or to speak to one of our Financial Advisers please contact TNR Wealth Management on 02 6621 8544.

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.

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Is It Time for a Super Review

All / 13.04.20170 comments

Picture this… when you were 21 years old your well-meaning but financially inept uncle put $1,000 into an ordinary bank account for you with instructions to leave it there and let the bank’s interest turn it into a fortune. You followed his directions only to discover 34 years later when you reached 55 the balance of your “fortune” was just $13,690! What went wrong? Well, to put it frankly, you didn’t give it any attention.

This is a classic mistake that many Australians make when it comes to their superannuation.

How long has it been since you reviewed your superannuation to see if it’s on track to meet your retirement needs, regardless of whether your retirement date is two years away or twenty?

Here are some questions to ask yourself:

Do you know how your super is invested?

Have you ever made any changes to suit your own circumstances? If you’ve never made a change, you may still be invested in your employer’s default option, which may not be appropriate to your needs.

The following example explains when a default option should be reviewed…

Brian (59) and Ingrid (29) work for Some Such Corporation. Their employer pays their superannuation contributions into the company’s preferred fund, which has a default investment option with a high allocation to cash and fixed interest assets. This suits Brian as he doesn’t like risk and plans to retire in a few years. However, it does not suit Ingrid, who is unlikely to retire for a further 35 years and accepts short-term volatility to achieve higher returns in the long term.

Are you making personal contributions to super?

Making ‘salary sacrifice’ or non-concessional contributions to superannuation is one of the most effective ways to boost your retirement savings. You may also earn additional tax benefits or government co-contributions. On the other hand, if you are making regular contributions, are you sure that you’re staying within the set limits and won’t be penalised for contributing too much?

Who will receive your super when you die?

Have you nominated a beneficiary on your account, or want to make a change to your existing beneficiaries? Some binding nominations are valid for only three years. Is yours still current?

Does your super fund provide any insurance cover?

If it does, remember to check the level for which you are covered. You may find that your existing cover is now inadequate and it’s time for a top-up.

Aside from your own personal circumstances shifting, major changes are coming into effect this July, so it pays to review your super well before then. You don’t want to reach that long-awaited retirement date to find you don’t have as much as you had “hoped”. Give us a call.

Assumptions for calculation:

$1000 invested over 34 years averaging 8% interest with no additional contributions. Not including bank fees and charges.

For more information or to speak to one of our Financial Advisers please contact TNR Wealth Management on 02 6621 8544.


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.

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Plan For The Unexpected Now

All / 13.04.20170 comments

 

We all hope that bad things won’t happen to us, but what if they did? These people held the same belief until…

Jordan started his own business servicing computers after working for a major IT company for many years. At age 38, he was enjoying the freedom and control it gave him. Unfortunately his car collided with a truck on the way to see a client and Jordan suffered a severe whiplash injury. He couldn’t work for two months and the loss of income made life hard for his young family.

He didn’t think to arrange income protection insurance to replace the workers’ compensation cover he’d had with his former employer.

By their late 40s, James and Jenny had worked hard to reduce their mortgage and used some of the equity in their home for a loan to buy an investment unit. It was tenanted and had the potential for long-term capital growth. Sadly, James died suddenly after a massive stroke. On a reduced income Jenny couldn’t afford to keep paying the interest on the investment loan. The unit had to be sold quickly at a loss.

They didn’t think to increase James’s life insurance when they borrowed for the unit.

At 42, Sara is a successful business owner and prides herself in managing her personal finances well. She has a diversified portfolio of property and shares. Last year she contracted breast cancer and her work was disrupted with tests and hospital treatment for five months. She has now recovered but the medical bills made a severe dent in her finances so she was forced to sell a big chunk of her share portfolio at short notice.

Sara didn’t know that trauma insurance may have paid her a lump sum if she was diagnosed with a critical illness.

Three important lessons can be learned from these cases.

Firstly, the unexpected can happen to anyone.

Secondly, take the time to review your insurance arrangements at least once every year. If there are changes in your circumstances – new job, new loans, family changes, etc. – you may need to make adjustments to your cover.

Thirdly, talk to an expert. There are many different choices of insurance and it pays to have a specialist analyse your needs and find the most cost-effective solution for your circumstances.

Review your insurance policies

The last few years have seen reduced profits for insurance companies due to lower investment returns and rising claims. This has caused premiums on most types of policies to dramatically increase.

Each time you review your insurance, check your coverage and make sure you have told the insurer all of the information they need to know. The last thing you need when making a claim is to discover that you’re not covered or you didn’t fully disclose the facts.

Checklist

  • Does your income protection policy still reflect the income you are currently earning?
  • Will your life insurance pay off all your current debts and be able to support your dependants if you can’t work?
  • Have you taken up a “high risk activity” such as skydiving which could affect your life cover?
  • Will your house insurance pay out enough to rebuild your house if it is destroyed?
  • Have you recently installed security devices on your home that could reduce your premium?
  • Have you bought an expensive work of art and forgotten to add it to your contents policy?
  • Has your vehicle been modified in any way that could affect your motor vehicle policy?

This list is by no means complete but it’s enough to start you thinking. If it’s time to arrange a review for a complete analysis of your insurance needs contact your licensed adviser.

For more information or to speak to one of our Financial Advisers please contact TNR Wealth Management on 02 6621 8544.

 

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.

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Working With the New Super Rules

All / 13.04.20170 comments

 

As a large majority of working and retired Australians already know, in late 2016 a raft of changes to the superannuation rules was legislated. Most come into effect from 1 July 2017. The greatest impact will be on high-income earners and individuals with large superannuation balances. If this is you, read on.

Let’s begin with the key modifications:

  • A new cap of $1.6 million on the amount that can be transferred into tax-free pensions.
  • The income threshold, including concessional (pre-tax) superannuation contributions, at which contributions are taxed at 30% will reduce from $300,000 to $250,000 per annum.
  • The non-concessional (post-tax) contributions limit falls from $180,000 to $100,000 per annum, or $300,000 within three years.
  • The cap on concessional contributions reduces from $30,000 (or $35,000 for over-50s) to $25,000 per annum.

These changes further restrict the amount of money that can be built up within the low-tax superannuation environment, spurring the search for alternative, tax-advantaged investment structures. So, what are the options?

Don’t dismiss super

While continuous changes make it natural to be wary about super, it’s still worth utilising its concessional tax rates up to the limits allowed. For example, if you have an existing tax-free pension with a balance of more than $1.6 million on 1 July 2017, the surplus will need to be rolled back into the accumulation phase or withdrawn from super. While earnings in the accumulation phase are taxed at 15% (10% for capital gains on assets held for over 12 months), that’s substantially lower than the tax rates that apply to alternative investment vehicles, and depending on other income, may be below your marginal tax rate.

As for the additional 15% tax on contributions for those earning $250,000 pa or more, remember that the subsequent earnings on those contributions are only taxed at 15%. That means it may still be worthwhile to maximise concessional contributions within permitted limits.

What about insurance bonds?

Once you’ve hit the limits for concessional and non-concessional super contributions you might take a look at insurance bonds. These are managed investments that are taxed within the product at the company tax rate, currently 30%. That’s a 19% saving off the top marginal tax rate of 49% (including Medicare and Budget Repair levies), or a 9% saving for taxpayers with a taxable income between $80,000 and $180,000 pa.

To get the full tax benefit of an insurance bond it must be held for at least 10 years. However, regular contributions can be made to the bond without resetting the start date. After 10 years no additional tax is payable on earnings, with some tax concessions available after 8 years. As tax is handled internally within the bond, provided no withdrawals are made, the earnings do not need to be declared from year to year.

Upgrade the family home

Many would argue the family home is not an investment. Nonetheless, while it’s not an income-producer, a principle residence could still generate attractive, tax-free capital gains. Whether it’s through extensions and renovations or upsizing to a new home, investing in the roof over your head can sometimes be a financially viable strategy.

Trusts and companies

Family trusts and private companies can provide opportunities to:

  • Split income with family members on a lower marginal tax rate.
  • Allow funds to accumulate in a lower tax environment.
  • Defer some tax, possibly until beneficiaries or members are on a lower marginal tax rate (e.g. after retirement).

Whether trusts or companies are suited to a particular investor depends very much on personal circumstances and on whether the benefits outweigh the complexities and associated costs.

Advice is essential

The latest changes do nothing to simplify the superannuation system while introducing additional pitfalls for the unwary. Expert advice and forward planning is essential, so don’t delay in talking to your financial adviser about how best to respond to the new rules.

For more information or to speak to one of our Financial Advisers please contact TNR Wealth Management on 02 6621 8544.

 

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.

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The Foundations of Successful Investing

All / 13.04.20170 comments

Establishing an investment portfolio can be likened to building a home. The most destructive, yet unpredictable predator to the structure of a home is the weather. Even in these most technically advanced days, we are still unable to accurately predict the weather.

And so too, a man is a fool if he thinks he can successfully predict the future of the global economy. Like the weather it can be the most unpredictable and destructive threat to your investment earnings. But with a carefully built portfolio based on sound foundations, you have a much better chance of weathering any financial storm.

Investment principles

The foundations of a strong portfolio rely on four key ‘pillars’ or investment principles… quality, value, diversity and time.

We are probably all tiring of the old line, “don’t put all your eggs into one basket” – meaning to diversify your portfolio – but that is only one pillar on which to rely. The other three are equally important. Forget about just one and you are setting yourself up for a very bumpy ride!

Let us briefly explain why all four pillars are crucial to your investing success…

If we look at the first two pillars, quality and value, it’s obvious this means to look for assets that are expected to provide
higher returns relative to their risks. Applying this to shares, quality companies will have a sound basis to their operations and growth; that is, their earnings are not driven by fads. This however, might mean they take time to deliver. Remember that investing in the share market is generally a long-term strategy.

Quality and value don’t always go hand in hand. Quality stocks may trade at such high prices that they offer low initial value or it could be that expectations for these companies are sometimes too high. The key here is quality… the expectation is that they will be around for a long time, not just a good time.

This takes us back to diversity. Diversity acts like the scales in a portfolio, providing balance. True diversity in a portfolio gives the investor the opportunity to take advantage of “hot stocks” or asset classes, whilst balancing out the risk with quality stocks and asset classes. It can provide a buffer against mistakes in assessing value because nobody gets it right all of the time. A well-balanced portfolio can cope with occasional losses.

And finally, one of the most important pillars is time because it applies to all three, giving you the best chance of success. Every market will suffer periodic downturns, however over time the upturn will always triumph. The golden rule is don’t panic and refrain from getting caught up in the fear and greed cycle.

For more information or to speak to one of our Financial Advisers please contact TNR Wealth Management on 02 6621 8544.


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.

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Super in Your 20’s. Boring? Doesn’t Have to Be!

All / 13.04.20170 comments

Superannuation is for the oldies, right? In some ways that’s true, but even in your twenties there are good reasons to take a bit more interest in your super. The average 25-year-old has around $10,000 in super, but the decisions you make now, even with relatively small sums of money, could earn you hundreds of thousands of extra dollars over your working life.

Are you getting any?

Earn more than $450 in any given month (excluding overtime, bonuses and some allowances)? Then every three months your employer should be paying 9.5% of that into your super fund. Usually you can choose your fund; if you don’t, it gets paid into a super fund of your employer’s choice. But that doesn’t mean you don’t get a say in how it’s invested.

If you don’t know if your super is being paid, or the fund it’s being paid into, ask your employer. If you think you’re missing out, search ‘unpaid super’ on the tax office website (ato.gov.au) to see what you can do. This is your money.

Where have you got it?

Had more than one job? If you have a lot of little super accounts the money can disappear in a puff of fees and insurance premiums. Simple fix – combine your super into one account.

What about insurance?

If you don’t have any dependents, your super fund could be paying for insurance you don’t really need just yet. Cancelling unnecessary life insurance leaves more money in your account to boost your savings. On the other hand, if you do need life or disability insurance, then doing it through super could be a better option.

Is it working for YOU?

Your money is going to be stuck in super for a long time, so you want it to be working hard for you. Most funds offer a range of investment choices and some will do better than others.

Imagine your income and super contributions follow a particular pattern over the next 42 years[i]. Your fund earns 5% per year, and when you retire it is worth $1,037,154. Now change just one thing – you choose an investment option that earns 8% each year. Now your balance could grow to over $2,000,000! That’s nearly a million bucks extra, just for ticking a different box on your super fund application form!

There’s a bit more to it. An investment choice that is expected to produce higher returns over the long term can bounce up and down in value. Some years it may even go backwards in value. However, “safer” investment options usually produce lower long-term returns.

What do you want?

Buying a new car. Travelling, Having fun. Let’s face it, there are lots more exciting things to do with your money than sticking it into super. The choice is yours but think about this:

  • If Mum and Dad retired this year, they would need a minimum of around $59,000 per year to enjoy themselves [ii]. If that doesn’t sound like much now, by the time YOU retire inflation could have pushed that annual amount to around $204,000[iii]. That means you will need to have at least $3.5 million[iv] in savings! Sure you’ve got 40-plus years but that’s still a lot of money to save up! It can be done if you start early enough – and you don’t need to miss out on enjoying life now.
  • Fact: you’re going to live much longer than your parents and grandparents. Can you imagine living another 30 years without earning an income? A sound investment plan designed to make your super work hard while you’re employed will be the difference between enjoying those decades and scraping by on a measly pension.
  • Starting early and adding a bit extra when you can makes a big difference. Let’s work on another 40 years before you can retire. If you start now by making an extra post-tax contribution of just 1% of your annual income to super, ($350 from a $35,000 salary – and the government could add to that with a co-contribution[v]) at an 8% investment return could add an extra $149,000 to your retirement fund. If you wait 20 years before starting to make that extra contribution, you’ll only get a boost of $49,000. $100,000 less! Continuing this small extra contribution as your salary increases will turbo boost your super fund balance. Imagine your retirement party?!

So, still find super boring? That’s okay; you’re not alone. But instead of finding the time to organise all this yourself, contact a licensed financial adviser who will review your current super, any insurance required, the investment choices and prepare a strategy to get your super into shape – then you can get back to enjoying life!

For more information or to speak to one of our Financial Advisers please contact TNR Wealth Management on 02 6621 8544.

 

[i] Starting salary $50,000 pa increasing at 4% pa over 42 years. Super contributions fixed at 9.5% of salary and taxed at 15%. Investment returns before inflation but after tax and fees.
[ii] Income required to provide a couple with a “comfortable” level of income as calculated by The Association of Superannuation Funds of Australia (ASFA) (December 2016)
 [iii] Value of $58,922 today in 42 years at 3% inflation.
 [iv] Sum required to fund an annual income of $204,000 for 30 years at a return of 4% pa after inflation, fees and tax, disregarding any age pension.
 [v] The government makes a co-contribution to super for low income earners under $51,021pa (2016/17).

  

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.

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4 Ways to Manage Risk Later In Life

All / 07.04.20170 comments

A health crisis can occur at any time of life, but the risks obviously increase as we age. Unfortunately, due to this increased risk of illness or injury the cost of insurance for those over 50 can be high. As a result, people in this age group are tempted to drop their insurance cover altogether just when the need is at its greatest.

If age 50 is looming, or recently passed by, it’s even more important to continue to protect both your income-earning ability and the financial security of any dependants. Here are some solutions to consider:

  • Review your level of insurance. As your investments and superannuation increase, you may be able to reduce your cover and still provide for your beneficiaries.
  • Life and disability insurance can be arranged through most superannuation funds. Premiums can be lower and are paid from the superannuation balance thereby reducing strain on the household budget.
  • For income protection insurance, if you have accrued adequate annual or sick leave, you might want to increase the waiting period which may reduce your premiums. Depending on circumstances, this may allow you to retain an important benefit at a more affordable price.
  • Pay in advance. Prepaying 12 months’ worth of income protection policy premiums before 30 June may allow you to bring forward a tax deduction for next year into the current year. This can potentially reduce your taxable income and the tax you pay this financial year.

Everyone is different so there might be other solutions not mentioned here. If you’re not sure what to do, always talk to a licensed financial adviser before you make any adjustments to your insurance cover. We can help you achieve the right balance for your needs.

For more information or to speak to one of our Financial Advisers please contact TNR Wealth Management on 02 6621 8544.

 

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.

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  • Switch and Save

    Switch and Save When developing a budget, it’s easy to think that you have no control over costs for essential items such as electricity, particularly when every bill seems to be higher than the last. But if you look closely at your energy usage at home and make a few small changes to reduce your […]

  • If you think you’d never fall for a scam, read this…

    If you are over 50, male, highly educated, financially literate and manage your own super, beware. You’re at a higher risk of being the target (and victim) of organised investment fraud. This isn’t necessarily because your demographic is particularly gullible. Rather, it’s because you’re more likely to control higher levels of wealth, perhaps as the […]

  • Salary sacrifice vs personal contributions to super

    Amongst the changes made to superannuation effective 1 July 2017 was the welcome and sensible move to give everyone who makes a personal contribution to super the option of claiming a tax deduction for it. Prior to this date, tax deductions on personal contributions could only be claimed by the “substantially self-employed”. The upshot is […]

  • Invest for the future not the past

    Investing bears no resemblance to gambling and, unfortunately past ‘form’ seldom provides an indication of future performance. Many investors are tempted to look at the best performing sector over the past year and then switch their investments accordingly. Beware this can be a recipe for disaster. In many cases, last year’s poor performer can turn […]

  • When was your last financial review?

    The months seem to fly past in a blink of an eye and although it feels like we were celebrating Christmas just a few months ago, it’s looming on the horizon again – another year gone! Almost every year we see changes to our superannuation system, interest rates, the stock market and the property market. […]

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