Viewing posts from: August 2017

Has your life changed recently?

All / 30.08.20170 comments

The busier we get the more we tend to put off the important things. Often the last subject we want to think about is our will or other estate planning requirements. Living life always seems to get in the way! Sometimes that’s not our fault, especially if there has been a crisis or major change in our lives. The irony is that’s exactly when these issues should take a higher priority.

If you or your family have recently (or not so recently) undergone a major life change, you need to update these important documents. A will should be reviewed every three to five years, or when circumstances change to ensure it still meets your needs.

If you have experienced any of the following, it’s time to act.

Marriage/Remarriage
Any existing will is automatically revoked by a marriage or new de facto relationship. For second or subsequent marriages, things can get complicated. Children, families and assets can create challenging estate planning situations.

Family additions
A good will anticipates future children and grandchildren, but you need to review any particular gifts, testamentary trust or guardianship arrangements to ensure the provisions remain current

Divorce
Separation will not revoke your will so it will remain in effect until you divorce. Depending on the state in which you live, your will is either revoked upon divorce or the section referring to your former spouse becomes null and void. As divorce is a major life change, you should seek professional advice as soon as possible.

Adult children
Marriage, separation, divorce, bankruptcy or a new business venture can each have implications for a gift left to an adult child. Would any of these affect your adult children differently?

Inheritance
Suddenly receiving a considerable inheritance in the form of money or property may change the way you want your estate to be distributed.

Executor
Your will doesn’t just involve you – if your executor is unable to handle the responsibility through illness or death, or you simply wish to appoint a different or additional person, make that change now.

Retirement
As one of the biggest changes in life, retirement often instigates considerable estate planning changes. As soon as you have settled your finances for this next stage, review and change your will.

Don’t keep putting this in the “too hard basket”; we can refer you to the appropriate professionals. Then you can get on with living life.

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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10 Tips to prepare for retirement

All / 25.08.20170 comments

Looking forward to retirement?

 Check out our top 10 tips to make sure you’re on track.

Tip 1: Take stock

How do you want to live in retirement? Now do the numbers. How much will it cost? How much have you saved? Do the figures meet your expectations? If not, what action do you need to take now?

Tip 2: Plan for the rest of your life

Most people are retired longer than they expect. While your health and family longevity will influence your life span, if you’ve survived life’s early risks, such as accidents or illnesses, you could easily live into your nineties or older. Plan for the long term, and don’t forget that you may need extra assistance or care as you get older.

Tip 3: Review your investments

For your savings to last the rest of your life, you need to invest for the long term. And that means getting the investment mix right, with a balance of income and capital growth. Diversifying your investments across cash, fixed interest, shares and property will help reduce risk and achieve smoother, more consistent returns over time.

Tip 4: Stick to your plan

Investments can quickly change in value. While it can be tempting to sell everything when the market falls and put all your money in cash, that’s often the worst thing you can do. It’s important to remain focused on the long term as the market usually recovers if given enough time.

Tip 5: Get the structure right

By changing the way you own investments and receive income, you may be able to reduce the amount of tax you pay while also increasing your Centrelink or DVA benefits. Even if you aren’t eligible for an Age Pension, you may be entitled to discounts and other benefits, which can save money over time.

 

Tip 6: Get your affairs in order

Estate planning allows you to pass on the right assets to the right people at the right time. The first step is putting a will in place, but you should also speak with your solicitor about an Enduring Power of Attorney and medical care directive. These can help your family fulfil your wishes if you’re not able to make decisions yourself. And remember to review your estate plan at least every three years.

Tip 7: Stay fit and healthy

If you stay mentally and physically active, you’re more likely to enjoy a long and healthy life. Take up a hobby, learn a new skill, keep working or volunteer in your community

Tip 8: Re-think the move

Some retirees have moved away from friends and family to their dream location only to realise it wasn’t what they hoped for. If the coast or bush is beckoning, try living there on a temporary basis first. It will give you time to work out if it’s the right move.

Tip 9: Think about the “what ifs”

The last thing you need in retirement is for your finances to be affected if something unexpected happens. Review your personal insurance needs to make sure you are fully protected. Don’t forget health and travel insurance cover, especially if you plan to join the grey nomads.

Tip 10: Get help

Making financial decisions can be complex. Getting the right advice can make a big difference to your retirement.

 

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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Hitting an insurance home run

All / 18.08.20170 comments

Most people either cringe or yawn when the word insurance is mentioned but regardless of whether you find it scary or boring, managing risk is a necessity in the world in which we now live. Let’s cover all of the bases to help make your home run as easy as possible.

First Base – Income Protection

Considering that over 530,000 people in Australia suffered a work-related injury or illness in 2013/14, what would your future look like if suddenly you were unable to work?

For most of us, the ability to earn an income is our most valuable asset. Depending on your age, your future income may well be worth far more than a house and its contents, a couple of cars, a boat or caravan all combined. Yet few people properly insure their income, and if illness or injury prevents them from working, financial hardship often results. With around half of us likely to spend more than three months off work due to ill health during our working lives, Income Protection insurance should be the first item on the personal insurance list.

Income Protection or Salary Continuance insurance can pay you a regular amount, usually up to 75% of your normal income if you are unable to work due to illness or injury. Benefits are taxable, and commence after a waiting period. Payments continue to be made until you return to work or until the benefit period expires. The waiting period and the benefit period are selected at the time of application.

 

Second Base – Life & Permanent Disability

Life Insurance pays a lump sum benefit if the policyholder dies. But what happens if they don’t die and can never return to work in their chosen occupation? Total and Permanent Disability (TPD) insurance can help ease the financial burden caused by loss of income by providing a lump sum payment.

Most people underestimate the level of life insurance they need. The insured sum should be enough to clear net debt, cover future expenses such as school fees, and provide an adequate replacement for the income that the deceased would have earned through to their normal retirement age. For a breadwinner with young children, an appropriate amount may be well in excess of $1 million. This cover is also important for primary care givers to ensure the children are properly cared for.

Third Base – Trauma Cover

Trauma Insurance fills a gap between Income Protection, Life and TPD Insurance. It was designed by a doctor who found that his patients’ recoveries were hampered by their concerns over the financial burden caused by major illness. Trauma Insurance pays a lump sum benefit on the occurrence of a specified condition such as cancer, heart attack or stroke, which can strike at any age. It often provides a benefit when neither Income Protection nor TPD Insurance claims can be made.

Unlike Income Protection, where the benefit is paid if you are unable to work regardless of the nature of the illness, trauma payments are based upon the specific illness, not the degree of disability.

 

Trauma Insurance is designed to cover out-of-pocket medical expenses and other costs associated with major illness, and to allow recovery to take place without financial worry. It isn’t a replacement for the other types of personal insurance. A comprehensive insurance portfolio will include Life, TPD, Income Protection and Trauma Insurance.

Home Base – General Insurance

Most people insure their house and contents, motor vehicles and other possessions. The key here is to make sure that all possessions are covered for full replacement value. Insurance companies provide guides on their websites to determine an appropriate level of cover. Don’t forget valuables like jewellery, antiques or artwork, which often have to be separately noted in the cover.

A super way to insure

Most superannuation funds (and all industry funds) offer Life and Permanent Disability Insurance.

There are a number of advantages in holding life insurance inside your super fund.

Super funds can often negotiate wholesale insurance rates, so premiums for their life insurance are often lower than can otherwise be obtained as an individual. In addition, premiums are paid from your superannuation balance. Whilst this reduces your ultimate retirement benefit, the relative effect is usually small, and by relieving the strain on the household budget, you may be able to increase your overall savings. The main advantage of insurance held in super is that the premiums are tax-deductible to the fund, which ultimately reduces your cost of insurance.

When you join a superannuation fund you may be offered a minimum level of insurance. This is rarely enough to provide adequate cover and it’s up to you to request an appropriate level. Depending on your age, medical history and the level of cover you require, you may also need to undergo a medical examination.

When leaving a superannuation fund you should find out what happens to your insurance cover. You may be offered a “continuation option”, which is an ongoing policy provided by the insurance company. If you don’t take this up within the period that the offer covers, you may find yourself without insurance. If this happens, and if there has been a change in your health, it may be difficult and cost much more to obtain replacement cover in the future.

Find a Coach

Insurance is a complex area. Policies vary in their detail and insurance companies differ in their approach to processing both applications and claims.

Each type of insurance has a role to play and it is a job for an expert to work out the right amount of each type for you. You should also seek expert advice whenever you consider allowing a policy to lapse to ensure you are fully aware of the potential consequences.

We can analyse your insurance needs and recommend cover that’s right for you and your budget. After all, you don’t want to strike out before reaching first base.

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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Be different today so you can be different tomorrow

All / 09.08.20170 comments

Every generation thinks life will be different – and of course, each one is right – but when it comes to planning for the future, while we’re young we have a habit of thinking there is still plenty of time. After all, when you’re in your mid-thirties or even early forties, retirement is still decades away; later if the government decides so!

However, like anything forgotten too long, the years pass quickly and the time we could have used constructively has disappeared. For example, early Generation X is now on the countdown to retirement.

If you want to be different today, plan to be different tomorrow.

Start with your grandparents

What did their working life and retirement look like?

Let’s imagine your grandparents are both in their eighties. It’s likely that Grandad started working in his teens and stayed with one employer for most of his life. Structured superannuation was available to the very few. He retired at 55. Grandma may not have had much paid employment, if any. Their lives can be broken into three phases – education, work and leisure.

But they didn’t anticipate retirement being as long as it’s turned out to be. They’re still healthy, have outlived their savings and are relying solely on the age pension to fund their frugal lifestyle.

Then your parents…

What did their working life look like? How will their retirement be different?

We’ll envisage your parents are aged in their sixties – typical baby boomers. They were better educated than their parents and both worked; though Mum took years off to raise the kids. They accumulated quite a bit of superannuation; Dad has more than Mum.

Their lives can be broken into the same three phases. Education may have extended into their early twenties or they studied later during their working lives. They worked for a couple of employers and, thanks to technology, ended up in careers they never imagined in their youth.

Whilst they have long talked about retirement, now that it’s almost here they face it with some trepidation. They may consider moving to part-time work that will give them more freedom, keep their minds stimulated and still have enough to pay the bills. After all, now they are independent and the mortgage is paid off, life is cheaper.

It would be nice to have more time to travel and do the things they would like to do. They’re both fit and healthy and if they live as long as their parents that will be 20 or 25 years of leisure.

Will Mum and Dad have enough money to live a comfortable lifestyle for that long?

And what about you?

You and your siblings are not going to rely on one employer or one lifetime career. Balancing life and work is more important as you take time off to travel, do volunteer work or try new adventures earlier in life. And being so versatile, when you resume your career you simply re-train.

What this means is that you will have multiple periods of education-work-leisure in your life, and as you will probably be much healthier than previous generations you don’t see working longer as a problem.

But will you be able to afford 20 or 30 years with no income? That’s a sobering thought at any age.

It’s time to be different now.

Many social commentators class Generation X as stuck in between the two “noisier” and more well-known generations – Baby Boomers and Gen Y – but that doesn’t mean you should fade into insignificance. Be the first generation to truly take control of your retirement at a younger age. Stop the trend and talk to us about the many strategies available to give your retirement savings the boost it needs.

Be different today so you can be different tomorrow.

 

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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5 Key Steps of financial planning

All / 02.08.20170 comments

Financial Planning is for everyone and this Infographic outlines the 5 steps of the financial planning process

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