tag:blogger.com,1999:blog-68638213443375563762024-03-08T16:38:28.793+11:00RiRi Financial PlanningWhile this blog mentions Superannuation, Life Insurance, Investments, Aged Care, Estate Planning, it does not consider your personal circumstances and is general advice only.
You must not act on anything that appears to be a recommendation without considering your personal needs, circumstances and objectives.
RIadvice-RetireInvest strongly recommends you obtain professional financial advice specific to your individual circumstances.
Planning is ImportantJorgohttp://www.blogger.com/profile/07076762361627206443noreply@blogger.comBlogger32125tag:blogger.com,1999:blog-6863821344337556376.post-26938115898516518422020-02-23T16:12:00.000+11:002020-02-23T16:13:06.658+11:00Past my 40s and not as secure as I'd like to be?Being in or past my 40s might involve a bit of soul-searching and the balancing different priorities. For example, I may need to care for my ageing parent, attempt to grow my career or business, or put up with the increasing demandingness of it, or if I'm a parent, attempt to helpfully support a child.<br />
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With all these responsibilities, it’s common to neglect my own financial well-being, including the building of my longer-term savings. Better securing my future might still be a choice. Here are some tips that might help me financially make the most of my 40s and beyond.<br />
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<b>I might consider making a plan </b><br />
It might be time to review my plan or time to get one. A financial plan may help me get and stay on MY track by identifying a longer-term goal of mine and a step I might choose to take to reach toward it. It helps to have it based on a specific need or priority of mine, and to have it as realistic as possible. Perhaps by working with a professional adviser, I may be a little better able to tailor a plan that optimizes my ability to invest and save for an important thing more tax and income efficiently.<br />
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<b>I might look to grow my savings and security</b><br />
My 40s and beyond might be my peak earning years. Data from the Australian Bureau of Statistics shows that in 2016, employees aged 45 to 54 earned $1,479.90 in average weekly total cash earnings, the highest of all age groups.<br />
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This may be a good decade then, subject to whatever other pressures are on me, to ramp up my savings by funneling some of my income into my superannuation through salary sacrifice, for instance. It will probably help me to do my homework and speak with a financial adviser to find out what my options might be - especially with regard to accessibility of funds.<br />
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<b>I might give my super a health check</b><br />
A quick super health check may help me increase my retirement savings. For example, by choosing a different investment option or risk level that actually suits me, I may be able to earn better returns on my super over the longer-term. If I have multiple super funds, consolidating my accounts may mean I could save on fees - being careful to consider the affects on my personal insurances in these supers.<br />
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Super can be a difficult subject to get my head around, so again a professional financial adviser might be better to help me bolster my super.<br />
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<b>I might attempt to avoid lifestyle creep</b><br />
As a HUMAN I might have a tendency to inflate my standard of living as I earn more and can afford more things like a better house or car, or more holidays.<br />
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While it’s only natural for me to want the finer things in life, it’s wise not to get caught in a cycle of upgrading my lifestyle with abandon. I’ll likely end up with little to no financial gain if my spending rises as quickly as my income. It might help a lot to stick to a plan I've developed with my financial adviser and stay a bit better focused on a financial goal of mine.<br />
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<b>I might, where possible, consider investing more</b><br />
My 40s onward may be a good time to invest more – or diversify my existing investments – to help me grow my long-term savings and work to stay ahead of inflation. Although leaving my money in a fixed-income vehicle like a term deposit may reduce my risk of losing money, inflation might erode the value of my capital.<br />
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When I decide to invest more, or more assertively, it might help a lot to keep in mind that it’s important to choose instruments that suit my risk appetite and time horizon. Developing a strategy with my financial adviser might make it less painful to achieve a return required to reach a financial goal of mine - understanding that no-one has a crystal ball.<br />
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My 40s onward is very likely to be a juggling act of different priorities, and they might also be a great opportunity to set up a new, healthy, financial habit. By putting a well thought out plan into practice, balancing a financial responsibility of mine may be that little bit less difficult.<br />
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<b>It might help me to seek advice</b><br />
Getting professional financial advice may help me optimize a 'windfall' of mine. Along with my adviser I might choose to review my finances, achievements to date, regardless of their size, lessons hard won, and work on a financial plan based on a need or priority of mine, and work toward achieving a goal of mine.<br />
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Call Hugh and Nick on 03 9471 0080<br />
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Australian Bureau of Statistics, May 2016, ‘Employee Earnings and Hours’. Accessible at: http://www.abs.gov.au/ausstats/abs@.nsf/mf/6306.0.<br />
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Jorgohttp://www.blogger.com/profile/07076762361627206443noreply@blogger.com0tag:blogger.com,1999:blog-6863821344337556376.post-72211050130396708752020-01-14T13:12:00.004+11:002020-01-14T13:12:53.525+11:00New Year, New Job – What’s your resolution?<span style="font-size: large;">New year is a common time for making a lifestyle change, however, for a resolution affecting your financial health, it’s often when starting a new job. If you aren't starting a new job, you might PRETEND you are.</span><br />
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<span style="font-size: large;">Along with a change to your daily routine that tends to come with a new job, it can help to put in place positive changes for your finances too. Here are some useful tips:</span><br />
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<b><span style="font-size: large;">Plan around your pay cycle</span></b><br />
<span style="font-size: large;">While most companies pay monthly, it may be at a different time to what you’re used to. Updating your direct debits and bill payments to reflect any change in pay dates is a good time to <b>look at what you’re actually paying for and whether savings can be found.</b></span><br />
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<span style="font-size: large;">If your new job pays fortnightly, this is a great opportunity to modify your mortgage repayments. <b>Paying half your monthly mortgage as a fortnightly repayment lets you squeeze in one extra monthly repayment each year</b> – potentially saving thousands in interest over the course of a loan.</span><br />
<span style="font-size: large;"><br /></span>
<b><span style="font-size: large;">Why waste a pay increase?</span></b><br />
<span style="font-size: large;">As a job change sometimes come with a pay increase, there is an opportunity to save more while maintaining the lifestyle you’ve become accustomed to. One of the most tax-effective investments might be making an additional concessional contribution into your super. Using your before-tax pay, it’s usually taxed at just 15 per cent instead of your marginal tax rate. </span><br />
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<span style="font-size: large;">Individuals may contribute up to $25,000 during 2019/20 as concessional contributions to super.</span><br />
<span style="font-size: large;"><br /></span>
<b><span style="font-size: large;">Check your Insurance</span></b><br />
<span style="font-size: large;">As you move through your career, priorities change and with a mortgage and children comes the need to protect your income. Changing jobs is a chance to check your insurance – inside and outside of super – and make sure it matches your financial situation.</span><br />
<span style="font-size: large;"><br /></span>
<b><span style="font-size: large;">Seek professional financial advice</span></b><br />
<span style="font-size: large;">A financial adviser can help with a new budget based on your new salary along with investment strategies to ensure your new job gives you a boost today, and in the future. The time you spend chatting might be a great investment.</span><br />
<span style="font-size: large;"><br /></span>
<b><span style="font-size: large;">Superannuation</span></b><br />
<span style="font-size: large;">With many people predicted to have more than 10 jobs in their lifetime, having a super fund that can move with you from job to job and into retirement has never been more important. After all, losing track of just one super fund can cost you thousands in retirement.</span><br />
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<span style="font-size: large;">Not all super funds can do this though, and once you’ve done your homework to find the fund that best suits your investment profile and insurance needs at the right cost – it’s often a good idea to stick with it. This gives you peace of mind throughout your working life that your retirement savings won’t get lost and you won’t be paying unnecessary tax and fees when the time finally comes to retire.</span><br />
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<span style="font-size: large;">There are other considerations, too, when looking at your super arrangements between jobs.</span><br />
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">Most plans have different default insurance. <b>If you roll your super from one fund to another, your existing insurance will usually lapse when you do so, while your new fund may not provide the cover you need or expect.</b></span><br />
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<span style="font-size: large;">There are transaction costs associated with selling and buying underlying investments, which you need to be mindful of when transferring to a new super plan.</span><br />
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">If you’re a 'Choice' member – that is, you’ve actively chosen where you want your super invested, changing funds may mean your previous options are no longer available, and this could have a significant impact on the growth of your super. </span><br />
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<span style="font-size: large;">For help with your super, savings and more, contact our professional financial adviser today on <b>03 9471 0080</b> or <a href="mailto:service@rireservoir.com.au">service@rireservoir.com.au</a>. </span><br />
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This editorial and the information within, including tax, does not consider your personal circumstances and is general advice only. It has been prepared without taking into account any of your individual objectives, financial solutions or needs. Before acting on this information you should consider its appropriateness, having regard to your own objectives, financial situation and needs. You should read the relevant Product Disclosure Statements and seek personal advice from a qualified financial adviser. From time to time we may send you informative updates and details of the range of services we can provide. If you no longer want to receive this information please contact our office to opt out. The views expressed in this publication are solely those of the author; they are not reflective or indicative of Licensee’s position, and are not to be attributed to the Licensee. They cannot be reproduced in any form without the express written consent of the author. RI Advice Group Pty Limited ABN 23 001 774 125, AFSL 238429<br />
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Jorgohttp://www.blogger.com/profile/07076762361627206443noreply@blogger.com0tag:blogger.com,1999:blog-6863821344337556376.post-57095265010222934202015-05-28T14:56:00.001+10:002015-05-28T15:37:03.047+10:00A Budget to get women into the PAID workforce<div class="MsoNormal">
Whether you’re a single woman, working mother or housewife,
there’s something in the Budget that affects you. We examine the key measures
below.</div>
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<o:p></o:p></div>
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<b><span style="color: #f58426; font-size: 12.0pt;">Key measures<o:p></o:p></span></b></div>
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<!--[if !supportLists]--><span style="font-family: "Calibri",sans-serif; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri;">-<span style="font-family: 'Times New Roman'; font-size: 7pt; font-stretch: normal; line-height: normal;">
</span></span><!--[endif]-->Restrictions on the government’s parental leave
pay scheme to stop new mothers ‘double dipping’<o:p></o:p></div>
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<!--[if !supportLists]--><span style="font-family: "Calibri",sans-serif; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri;">-<span style="font-family: 'Times New Roman'; font-size: 7pt; font-stretch: normal; line-height: normal;">
</span></span>A ‘Jobs for Families’
childcare package, incorporating a new means tested child care subsidy.
Designed to support working families and provide affordable access to
childcare, it will replace the Child Care Benefit, Child Care Rebate and Jobs,
Education and Training Child Care Fee Assistance (JETCCFA)<o:p></o:p></div>
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<!--[if !supportLists]--><span style="font-family: "Calibri",sans-serif; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri;">-<span style="font-family: 'Times New Roman'; font-size: 7pt; font-stretch: normal; line-height: normal;">
</span></span><!--[endif]-->Stay-at-home parents may lose access to
childcare subsidies under a tough new activity test<o:p></o:p></div>
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<!--[if !supportLists]--><span style="font-family: "Calibri",sans-serif; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri;">-<span style="font-family: 'Times New Roman'; font-size: 7pt; font-stretch: normal; line-height: normal;">
</span></span><!--[endif]-->Families with income of around $65,000 will
receive a subsidy of 85 per cent per child, up to an hourly fee cap<o:p></o:p></div>
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<!--[if !supportLists]--><span style="font-family: "Calibri",sans-serif; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri;">-<span style="font-family: 'Times New Roman'; font-size: 7pt; font-stretch: normal; line-height: normal;">
</span></span><!--[endif]-->A two-year trial program for nannies<o:p></o:p></div>
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<!--[if !supportLists]--><span style="font-family: "Calibri",sans-serif; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri;">-<span style="font-family: 'Times New Roman'; font-size: 7pt; font-stretch: normal; line-height: normal;">
</span></span><!--[endif]-->Additional funding for preschool programs.<o:p></o:p></div>
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Women shared the spotlight with small business in this
year’s Federal Budget. The centrepieces of the Budget were small business tax
cuts and a ‘Families package’, which included a mammoth investment in
childcare.<o:p></o:p></div>
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Women are still the primary carer of children while men
spend more time in the workforce, which explains why women generally have
smaller superannuation balances.<o:p></o:p></div>
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According to the Association of Superannuation Funds of
Australia, in 2011/12 the average female super balance was around $45,000 while
men had about $83,000. Women were retiring with around $105,000 compared to men
who had almost $197,000.<o:p></o:p></div>
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An analysis of 2014 ABS data shows that female workforce
participation rates had been steadily increasing until the last decade, when in
plateaued at around 60 per cent. The Government has seemingly indicated it is
cognisant of the increasingly important role women can play in driving economic
growth, which may have driven the Coalition’s decision to include a massive
investment in childcare in their second Budget.<o:p></o:p></div>
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A big impediment to higher female workforce participation is
affordable childcare.<o:p></o:p></div>
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At a time when the Australian economy is slowing as it
transitions from the mining boom to broader-based growth, Mr Hockey wants to
get women working :P (in paid employment – rather than a million things for
free)<o:p></o:p></div>
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<b><span style="color: #f58426; font-size: 12.0pt;">Affordable
access to childcare<o:p></o:p></span></b></div>
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If passed through Parliament, the Families package contained
in the Budget will primarily benefit low to middle-income families while
leaving higher income families relatively unscathed.<o:p></o:p></div>
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A simplified means-tested childcare subsidy will be
introduced from July 2017 which will see families earning between $65,000 and
$170,000, around $30 a week better off - or $1,500 better off each year.
Families earning over $170,000 may still receive a 50 per cent subsidy.<o:p></o:p></div>
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The new childcare subsidy, which will replace the Child Care
Benefit, Child Care Rebate and Jobs, Education and Training Child Care Fee
Assistance (JETCCFA), will be paid directly to approved care service providers
to dramatically lower the upfront cost of childcare.<o:p></o:p></div>
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Families earning up to $65,000 a year will receive 85 per cent
of childcare fees, up to an hourly fee cap. This is reduced to 50 per cent for
families earning $170,000 or more.<o:p></o:p></div>
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Families earning less than $185,000 per year will no longer
have a cap on the subsidy they receive. If the family’s income exceeds $185,000
a cap of $10,000 per child per year applies.<o:p></o:p></div>
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<b><span style="color: #f58426; font-size: 12.0pt;">Stay-at-home
mums<o:p></o:p></span></b></div>
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In a bid to boost workforce participation the Budget
introduces tough new work requirements in order for people to qualify for
childcare subsidies which may affect stay-at-home mums.<o:p></o:p></div>
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Families earning over $65,000 per annum with a stay-at-home
parent who isn’t working, looking for work, training, studying or undertaking
any other approved activity (such as volunteering) will lose access to
subsidies and will have to meet the full cost of childcare under changes
outlined in the Budget. Both parents must be undertaking these activities at
least eight hours a fortnight to qualify for subsidies.<o:p></o:p></div>
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<b><span style="color: #f58426; font-size: 12.0pt;">No ‘double
dipping’<o:p></o:p></span></b></div>
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The Budget has also tightened eligibility for the
government’s parental leave pay scheme. <o:p></o:p></div>
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New mothers who have access to an employer-funded paid
maternity leave scheme stand to lose around $11,500 of taxpayer funded
benefits, as part of moves to stop women ‘double dipping’ if these measures are
approved.<o:p></o:p></div>
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New mothers currently can receive the government’s 18 weeks’
of pay at minimum wage plus participate in their employer’s parental leave
scheme, if they have one.<o:p></o:p></div>
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However, new measures designed to stop parents from ‘double
dipping’ will see mothers forfeit any government benefits if their employer
offers a more generous scheme.<o:p></o:p></div>
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<b><span style="color: #f58426; font-size: 12.0pt;">What’s next?<o:p></o:p></span></b></div>
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Budget measures must pass through Parliament to be
legislated before they apply.<o:p></o:p></div>
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Labour and the Greens have already said they won’t support
cuts to family tax benefits announced in the 2014 Budget in order to fund the
new Families and childcare package. <o:p></o:p></div>
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If you think you might be affected by some changes, you
should speak to your financial adviser. <o:p></o:p></div>
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<span style="font-family: Helvetica, sans-serif; font-size: 8pt;">RI Advice Group Pty Limited (ABN 23 001 774 125), AFSL
238429. This editorial does not consider your personal circumstances and is
general advice only. It has been prepared without taking into account any of
your individual objectives, financial solutions or needs. Before acting on this
information you should consider its appropriateness, having regard to your own
objectives, financial situation and needs. You should read the relevant Product
Disclosure Statements and ALWAYS seek personal advice from a qualified financial
adviser.</span></div>
Jorgohttp://www.blogger.com/profile/07076762361627206443noreply@blogger.com0tag:blogger.com,1999:blog-6863821344337556376.post-55085392602123232952013-08-13T11:45:00.002+10:002013-08-13T11:45:17.089+10:00Taking control of your finances after a divorceWe are all acutely aware that people are usually prompted to focus on financial issues when they experience a significant life event such as a career or income change - which may spark a person’s interest in their finances.<br />
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A marriage may prompt a couple to consider longer term investment goals.<br />
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The birth of a child or taking out a mortgage may motivate others to do something about their life insurance.<br />
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Divorce is another such life event that prompts action and consideration about one's financial future.<br />
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While it is a far from pleasant life event, divorce presents a range of financial challenges that require thought and action in your personal financial planning.<br />
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The cost of divorce can be a huge financial drain, making it even more important to be focused on your finances and seek assistance to review them.<br />
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The eventual focus of a person is generally on getting finances moving forward after the divorce is settled.<br />
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If you or someone you know is going through divorce, a checklist of some of the issues to consider, may include some of the following.<br />
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Budgeting is critical:<br />
Day to day financial circumstances will inevitably be different for both parties after the divorce. Child support payments, a previously stay-at-home parent taking on paid employment, changes in accommodation and the need to run a household on less income may all come into play.<br />
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These factors highlight the importance of looking at personal budgeting and managing expenses in-line with available income.<br />
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Updating your Will and Estate Planning arrangements:<br />
It is exceptionally unlikely that the Will you had when you were married will reflect your post-divorce wishes.<br />
It is recommended you review your Will and other estate planning arrangements, such as your Power of Attorney, as soon as possible. It is essential your wishes are expressed in a formal way. This is a key area for seeking professional advice as it can be a complicated and emotional process.<br />
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Re-investing liquidated assets:<br />
In many cases major assets, such as a family home, will have been sold and proceeds divided. This may result in relatively large sums of money that need to be managed.<br />
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One of the big concerns facing many individuals after divorce is how to get back in to the property market and any related tax implications. These issues may have a major impact on your future financial health - this is an area you can benefit from some professional advice and the professionals who can assist in this specialist area.<br />
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Social security benefits:<br />
Now that household income is split, you may be entitled to social security benefits that were not previously available to you. Benefits such as Parenting Payment and Child Support need to be considered in order to boost your income.<br />
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Insurance:<br />
Another consideration is if any life insurance policies nominate your ex-partner as a beneficiary. Apart from resolving any such issues, you may need to review levels of cover to ensure you have sufficient insurance to cover your post-divorce requirements. Conversely, you may have too much cover in your new circumstances and therefore have the opportunity to scale down cover and divert funds to other spending or investment opportunities. Professional input is best sought.<br />
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Superannuation:<br />
Superannuation generally forms part of the overall property settlement in a divorce, so both parties need to re-assess their superannuation and retirement funding. Depending on your age, you may need to take decisive action on your retirement funding and how much super you will need. You will also need to urgently review your nomination of beneficiary – particularly any BINDING nomination.<br />
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An SMSF, or Self-Managed Superannuation Fund, is an incredibly financially dangerous vehicle to be in at this time - your roles, responsibilities, and the risk to your assets held in the fund must be urgently reviewed.<br />
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Investments:<br />
While divorce has an often large degree of emotional upheaval, it can be a beneficial time to re-focus on your future lifestyle goals, once the dust settles, and you have recovered a little. After some of the more fundamental issues are dealt with, you can then focus on a plan to re-build your well-being, health, wealth and financial independence. This is a useful time to consider engaging a financial adviser to discuss your options and opportunities.<br />
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A good time to lean on some sound advice:<br />
At times of significant challenge, many people find the advice and support of a financial adviser to be invaluable.<br />
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For further information, or to set up an obligation free consultation, contact Hugh* from RIadvice-RetireInvest on 03 9471 0080.<br />
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*Hugh Kilpatrick is an Authorised Representative of RI Advice Group Pty Limited (ABN 23 001 774 125), Australian Financial Services Licence 238429. This editorial does not consider your personal circumstances and is general advice only. You should not act on the information provided without first obtaining professional financial advice specific to your circumstances.<br />
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Jorgohttp://www.blogger.com/profile/07076762361627206443noreply@blogger.com0tag:blogger.com,1999:blog-6863821344337556376.post-74912318682429729672012-09-11T14:30:00.001+10:002012-09-11T14:30:34.554+10:00Fatal mistakes that new relationships make!<strong>Is this a second marriage or a new relationship after a breakdown?</strong><br />
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<u>Keep your financial situation separate:</u><br />
Generally it is better to keep your finances separate.<br />
Except for a joint bank account which is used to pay all the <u>budgeted</u> joint expenses.<br />
A sum of money from each party can be deposited into the joint account each month.<br />
This way the financial well being of both parties is maintained and the opportunity for fraud is reduced.<br />
If a person has a problem with this, RUN.....<br />
<br />
<u>Only own things together as "Tenants in Common."</u><br />
Always have a written agreement which states the proportion you each own - kept with your executor. This means that your share of the asset is always dealt with by you and your estate.<br />
In "Joint Tenants," the ownership of the asset automatically passes to the survivor on death of the other. It does not go through your Will, nor can you say what happens to it.<br />
<br />
<u>On sale of a "tenants in common" asset, hold your own share in a separate bank account.</u><br />
All too often, the money is put in a joint bank account, one of the parties dies, and the funds go to the other person immediately.<br />
It wont matter that you had "both must sign" on the account.<br />
<br />
<u>Always have a Will which states your wishes.</u><br />
Draft it with your beneficiaries involved, with legal help, making certain your partner is informed and aware.<br />
Avoid relying on your partners good nature - "if you die first, I'll make certain your kids get a share."<br />
It can work, but is imprudent to allow the potential for abuse.<br />
Consider how long the person can live in the common home before it must be sold.<br />
Probably better to consider 1, 3, 5 years, or whatever suits you both.<br />
It can create enormous ill-will and heartache when people are forced to wait for an estate.<br />
<br />
<u>Suit yourself, however be business-like.</u><br />
If you are older than 21, you may have had more than one relationship.<br />
In business, written agreements are the norm and potential conflict is discussed and reduced.<br />
Financial arrangements are business arrangements.<br />
Protecting your financial well being is protecting your life - it should be done thoroughly.<br />
If you play it like a game of chance, you stand to lose a huge amount.<br />
<br />
<u>Share a life together with joint decision making.</u><br />
People who understand that a person needs to be prudent, are perhaps the ones to get and hold onto.<br />
Bullying, pouting, pleading do not indicate the relationship will go far.<br />
Make decisions jointly, with all the factors considered. Participate.<br />
Certainly, you can now jointly afford that $1,000,000 mansion, but do you want to clean it?<br />
Perhaps a more modest home with travel would give you much greater pleasure.<br />
<br />
A new relationship can be a cause for optimism and pleasure.<br />
<br />
Be aware of your needs, and it will most likely remain a source of these things.Jorgohttp://www.blogger.com/profile/07076762361627206443noreply@blogger.com0tag:blogger.com,1999:blog-6863821344337556376.post-89340840361876513552012-09-10T13:48:00.000+10:002012-09-10T13:48:32.878+10:00Protecting your bread and butter - Buy/Sell<span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">If you own your own
business, chances are it’s your livelihood. But what if something happened to
you or your partner and you were unable to go on running your business?<o:p></o:p></span><br />
<br />
<div class="MsoNormal" style="margin: 0cm 0cm 0pt;">
<span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;"><o:p> </o:p></span></div>
<br />
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<span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">Having a buy-sell
agreement in place can be one of the best ways for small and medium business
owners to protect their livelihood against death, disability or trauma.<o:p></o:p></span></div>
<br />
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<span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;"><o:p> </o:p></span></div>
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<span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">A buy-sell agreement is
a legally binding contract between business partners, which facilitates the
sale of business ownership when certain ‘trigger events’ like death and
disability occur.<o:p></o:p></span></div>
<br />
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<span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;"><o:p> </o:p></span></div>
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<span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">While the purchase can
be funded personally, it is also commonly done through insurance, which can
provide ready capital and is often more cost-effective.<o:p></o:p></span></div>
<br />
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<span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;"><o:p> </o:p></span></div>
<br />
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<b style="mso-bidi-font-weight: normal;"><span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">But what are the chances?<o:p></o:p></span></b></div>
<br />
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<b style="mso-bidi-font-weight: normal;"><span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;"><o:p> </o:p></span></b></div>
<br />
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<span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">It can take years of
hard work to build up a successful business, however all this can be quickly
undone if you or your business partner die or suffer a serious illness or disability.<o:p></o:p></span></div>
<br />
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<span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;"><o:p> </o:p></span></div>
<br />
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<span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">While it’s
understandably not something you want to think about, unfortunately these
events are more common than you might think.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0cm 0cm 0pt;">
<span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;"><o:p> </o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0cm 0cm 0pt;">
<b style="mso-bidi-font-weight: normal;"><span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">For two business partners currently aged 45,
there is a 55% chance</span></b><span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;"> of death, total and permanent disability or trauma occurring before age
65. While for <b style="mso-bidi-font-weight: normal;">three business partners</b>
that number rises to <b style="mso-bidi-font-weight: normal;">70%</b> - for <b style="mso-bidi-font-weight: normal;">four business partners</b> that number is a
whopping <b style="mso-bidi-font-weight: normal;">80%</b><sup>1</sup>.<o:p></o:p></span></div>
<br />
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<span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;"><o:p> </o:p></span></div>
<br />
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<span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">Sadly, the more partners
you have, the more likelihood there is of a misfortune occurring to one of you.
However, having a buy-sell agreement in place can protect the equity in your
business.<o:p></o:p></span></div>
<br />
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<span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;"><o:p> </o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0cm 0cm 0pt;">
<b style="mso-bidi-font-weight: normal;"><span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">Using insurance to fund the agreement<o:p></o:p></span></b></div>
<br />
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<b style="mso-bidi-font-weight: normal;"><span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;"><o:p> </o:p></span></b></div>
<br />
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<span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">There are many
advantages to using insurance to fund a buy-sell agreement. <o:p></o:p></span></div>
<br />
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<span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;"><o:p> </o:p></span></div>
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<span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">First, it can help to protect
your equity in the business if you suffer from accident, illness or death, as
you (or your estate) aren’t forced to try and sell your share of the business
in a difficult and stressful time.<o:p></o:p></span></div>
<br />
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<span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;"><o:p> </o:p></span></div>
<br />
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<span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">“Stressed sale” could
lead you to sell your share of the business for less than it’s worth, or worse
still, not be able to sell it at all.<o:p></o:p></span></div>
<br />
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<span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;"><o:p> </o:p></span></div>
<br />
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<span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">Equally, it also
protects the other business partners from having to work with your estate <b style="mso-bidi-font-weight: normal;">or an unwanted replacement business partner,
your executor,</b> or from having to suddenly come up with funds to pay you
out.<o:p></o:p></span></div>
<br />
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<span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;"><o:p> </o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0cm 0cm 0pt;">
<b style="mso-bidi-font-weight: normal;"><span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">But how exactly does a buy-sell agreement
through insurance work?<o:p></o:p></span></b></div>
<br />
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<span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;"><o:p> </o:p></span></div>
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<span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">Basically, partners sign
a legally binding agreement enabling the sale and purchase of business equity
in the event of death, disability or trauma.<o:p></o:p></span></div>
<br />
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<span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;"><o:p> </o:p></span></div>
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<span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">Each partner also takes
out an insurance policy, with the agreement stipulating that if a trigger event
occurs, the funds received from the insurance policy will be used to payout
their share in the business.<o:p></o:p></span></div>
<br />
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<span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;"><o:p> </o:p></span></div>
<br />
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<span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">This means you, or your estate,
would receive the payment, while the remaining partners would receive your shares.<o:p></o:p></span></div>
<br />
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<span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;"><o:p> </o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0cm 0cm 0pt;">
<b style="mso-bidi-font-weight: normal;"><span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">Are there any other options?<o:p></o:p></span></b></div>
<br />
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<b style="mso-bidi-font-weight: normal;"><span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;"><o:p> </o:p></span></b></div>
<br />
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<span lang="EN-US" style="color: #101d27; font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-bidi-font-weight: bold;">If you do not have a buy-sell
agreement in place and something happens to you or your partner, the business may
be forced to take one of the below options -
consider the questions raised and how ideal these would be for YOUR business: <o:p></o:p></span></div>
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<span lang="EN-US" style="color: #101d27; font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-bidi-font-weight: bold;"><o:p> </o:p></span></div>
<br />
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<b><span lang="EN-US" style="color: #101d27; font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial;">Buy-out the share holding:</span></b><span lang="EN-US" style="color: #101d27; font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-bidi-font-weight: bold;"> Do you have enough equity in
your business to do this at short notice? How will you determine the value?<o:p></o:p></span></div>
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<span lang="EN-US" style="color: #101d27; font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-bidi-font-weight: bold;"><o:p> </o:p></span></div>
<br />
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<b><span lang="EN-US" style="color: #101d27; font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial;">Partner’s estate maintains share holding:</span></b><span lang="EN-US" style="color: #101d27; font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-bidi-font-weight: bold;"> Are you
comfortable with your partner’s estate as a business partner?<o:p></o:p></span></div>
<br />
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<span lang="EN-US" style="color: #101d27; font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-bidi-font-weight: bold;"><o:p> </o:p></span></div>
<br />
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<b><span lang="EN-US" style="color: #101d27; font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial;">Sell the share holding: </span></b><span lang="EN-US" style="color: #101d27; font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-bidi-font-weight: bold;">Would the partner’s estate
receive a good price for their equity? Would the remaining partners get the
right business partner?<o:p></o:p></span></div>
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<span lang="EN-US" style="color: #101d27; font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-bidi-font-weight: bold;"><o:p> </o:p></span></div>
<br />
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<b><span lang="EN-US" style="color: #101d27; font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial;">Borrow funds to buy the share holding:</span></b><span lang="EN-US" style="color: #101d27; font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-bidi-font-weight: bold;"> Would
lenders still lend money despite the loss of a key person? Would private equity
be looking for a premium, making it more expensive?<o:p></o:p></span></div>
<br />
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<span lang="EN-US" style="color: #101d27; font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-bidi-font-weight: bold;"><o:p> </o:p></span></div>
<br />
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<span lang="EN-US" style="color: #101d27; font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-bidi-font-weight: bold;">In many cases, having a buy-sell
agreement via insurance should be considered as a sensible way to protect the
interests of all partners. However all businesses are unique so it’s important
to seek help from <a href="http://www.blogger.com/null" name="_GoBack"></a>qualified professionals in order to
find the right solution for your business.<o:p></o:p></span></div>
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<span lang="EN-US" style="color: #101d27; font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-bidi-font-weight: bold;"><o:p> </o:p></span></div>
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<span lang="EN-US" style="color: #101d27; font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-bidi-font-weight: bold;">For more information call Hugh
Kilpatrick* from </span><span lang="EN-US" style="color: #101d27; font-family: "Helvetica","sans-serif"; font-size: 11pt; mso-bidi-font-family: Arial; mso-bidi-font-weight: bold;">RIadvice-RetireInvest on <b>03
9471 0080</b>.<o:p></o:p></span></div>
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<span lang="EN-US" style="color: #101d27; font-family: "Helvetica","sans-serif"; mso-bidi-font-family: Arial; mso-bidi-font-weight: bold;"><o:p> </o:p></span></div>
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<span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 9pt; mso-bidi-font-family: "Times New Roman"; mso-bidi-theme-font: minor-bidi;">*Hugh
Kilpatrick is an Authorised Representative of RI Advice Group Pty Limited (ABN
23 001 774 125), Australian Financial Services Licence 238429. This editorial
does not consider your personal circumstances and is general advice only. You
should not act on the information provided without first obtaining professional
financial advice specific to your circumstances. <o:p></o:p></span></div>
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<span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 9pt; mso-bidi-font-family: "Times New Roman"; mso-bidi-theme-font: minor-bidi;"><o:p> </o:p></span></div>
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<span class="MsoFootnoteReference"><span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 9pt; mso-bidi-font-family: Arial;">1 </span></span><span lang="EN-US" style="font-family: "Helvetica","sans-serif"; font-size: 9pt; mso-bidi-font-family: Arial;">Australian Bureau of
Statistics, 2005 Australian Life Table.</span></div>
Jorgohttp://www.blogger.com/profile/07076762361627206443noreply@blogger.com0tag:blogger.com,1999:blog-6863821344337556376.post-66820577044347878942012-08-17T13:28:00.000+10:002012-08-17T13:28:25.359+10:00A SUPER start to the year.....<span style="font-family: "Helvetica","sans-serif"; font-size: 10pt; mso-fareast-language: EN-US;"><span style="font-family: Times New Roman; font-size: small;">W</span>ith the start of a new financial year just past,
now is perhaps the perfect time to talk to a financial adviser about strategies
to boost your superannuation. <o:p></o:p></span><br />
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<span style="font-family: "Helvetica","sans-serif"; font-size: 10pt; mso-fareast-language: EN-US;">There have been some changes to super rules
recently, but with so many tax concessions in place super can still be one of
the most effective ways to save for retirement.<o:p></o:p></span></div>
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<span style="font-family: "Helvetica","sans-serif"; font-size: 10pt; mso-fareast-language: EN-US;">The Government wants to encourage us to save
gradually rather than making a huge lump sum investment as we approach
retirement, however there are limits to how much we can tax-effectively
contribute to super each year. <o:p></o:p></span></div>
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<span style="font-family: "Helvetica","sans-serif"; font-size: 10pt; mso-fareast-language: EN-US;">These limits are called contribution caps.
Different contribution caps apply depending on the type of super contribution
you make and how much you have contributed to your super in the past. <o:p></o:p></span></div>
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<span style="font-family: "Helvetica","sans-serif"; font-size: 10pt; mso-fareast-language: EN-US;">Knowing what the contribution caps are will help
you make the most of your super savings and stop you from paying unnecessary
tax. If you exceed the limit you could potentially be taxed at penalty rates of
up to 78% on top of 15% you have already paid.<o:p></o:p></span></div>
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<span style="font-family: "Helvetica","sans-serif"; font-size: 10pt; mso-fareast-language: EN-US;">One of the best super saving strategies for many
people is salary sacrifice. Salary sacrifice can be a tax-effective way to
boost retirement savings with contributions to your super made from your
pre-tax income. This means the contributions are taxed at just 15%, rather than
your marginal tax rate.<o:p></o:p></span></div>
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<span style="font-family: "Helvetica","sans-serif"; font-size: 10pt; mso-fareast-language: EN-US;">If you aren’t able to set up a salary sacrifice
arrangement, have no employment income or are self-employed (earning less than
10% of your income from an employer), you may consider making a personal
contribution to super this year.<o:p></o:p></span></div>
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<span style="font-family: "Helvetica","sans-serif"; font-size: 10pt; mso-fareast-language: EN-US;">Not only will this boost your retirement savings,
but you may also be able count it as a tax deduction, meaning savings at tax
time.<o:p></o:p></span></div>
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<span style="font-family: "Helvetica","sans-serif"; font-size: 10pt; mso-fareast-language: EN-US;">Another
advantage of super can be the ability to pay </span><span style="font-family: "Helvetica","sans-serif"; font-size: 10pt;">insurance premiums from your
super, by purchasing insurance through your super fund - under insurance is a
major issue in Australia and up to 95 per cent of Australian families do not
have adequate levels of insurance cover.**<o:p></o:p></span></div>
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<span style="font-family: "Helvetica","sans-serif"; font-size: 10pt;">While most people would never
consider driving a car without motor insurance, many of us do not insure our
most important asset – our ability to earn an income. There are a range of
different types of insurance available that could help provide for you, or your
family, in the event of accident, illness or injury.<o:p></o:p></span></div>
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<span style="font-family: "Helvetica","sans-serif"; font-size: 10pt;">For example, you may be able to
buy adequate life and Total and Permanent Disability insurance cover through
your super</span><span style="font-family: "Helvetica","sans-serif"; font-size: 10pt; mso-fareast-language: EN-US;">.</span><span style="font-family: "Helvetica","sans-serif"; font-size: 10pt;"> The tax savings may be an advantage of this
strategy, plus your insurance premium may be cheaper because the super fund may
be buying the insurance in bulk at a discounted rate.<o:p></o:p></span></div>
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<span style="font-family: "Helvetica","sans-serif"; font-size: 10pt;">The rules around superannuation
can be complex and these strategies may not be appropriate for everyone, so it
is critically important to consult a financial adviser to get advice that is
specific to your circumstances.<o:p></o:p></span></div>
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<span style="font-family: "Helvetica","sans-serif"; font-size: 10pt; mso-fareast-language: EN-US;">Make it a super start to the year - by seeing a
financial adviser and putting a strategy in place now, giving you the peace of
mind of knowing that you are getting the most out of your super and insurance
this financial year. <o:p></o:p></span></div>
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<span style="font-family: "Helvetica","sans-serif"; font-size: 10pt; mso-fareast-language: EN-US;">Call </span><span style="font-family: "Helvetica","sans-serif"; font-size: 10pt; mso-bidi-font-family: "Times New Roman";">Hugh*
from RIadvice-retireInvest on 03 9471 0080 </span><span style="font-family: "Helvetica","sans-serif"; font-size: 10pt; mso-fareast-language: EN-US;">today.<o:p></o:p></span></div>
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<span style="font-family: "Helvetica","sans-serif"; font-size: 8pt; line-height: 115%;">*Hugh Kilpatrick is an
Authorised Representative of RI Advice Group Pty Limited (ABN 23 001 774 125),
Australian Financial Services Licence 238429. This editorial does not consider
your personal circumstances and is general advice only. You must not act on the
information provided without first obtaining professional financial advice
specific to your circumstances from a suitably trained and authorised
professional. <o:p></o:p></span></div>
<span style="font-family: "Helvetica","sans-serif"; font-size: 8pt; line-height: 115%; mso-ansi-language: EN-AU; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;">**</span><span style="font-family: "Times New Roman","serif"; font-size: 8pt; line-height: 115%; mso-ansi-language: EN-AU; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;"> </span><span style="font-family: "Helvetica","sans-serif"; font-size: 8pt; line-height: 115%; mso-ansi-language: EN-AU; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;">2010
Lifewise/NATSEM Underinsurance Report conducted for the Financial Services
Council.</span>Jorgohttp://www.blogger.com/profile/07076762361627206443noreply@blogger.com0tag:blogger.com,1999:blog-6863821344337556376.post-9981361420097335732012-07-24T11:11:00.001+10:002012-07-24T11:12:58.047+10:00Keep your Superannuation safe!Take your year of birth off your Facebook profile.<br />
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Never divulge your details over the phone or the net.<br />
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Only invest through licenced financial advisers in major organisations.<br />
<br />
<a href="http://www.afrsmartinvestor.com/p/howto/budgeting/how_to_keep_your_super_safe_from_H4qNPBjBAoXOBuuNfb7uTK" target="_blank">KEEP SUPER SAFE LINK</a>Jorgohttp://www.blogger.com/profile/07076762361627206443noreply@blogger.com0tag:blogger.com,1999:blog-6863821344337556376.post-18665140858187701742012-06-19T11:55:00.000+10:002012-06-19T11:55:27.208+10:00Time to re-think your cash savings?<span style="font-family: "Helvetica","sans-serif"; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">In light of all the
economic uncertainty we’ve experienced since the start of the global financial
crisis, it’s <b style="mso-bidi-font-weight: normal;">not surprising that many
investors, particularly those close to or in retirement, are settling for
low-risk options for their retirement savings</b>. It’s one of the main reasons
we’ve seen such a large transfer of money from shares to term deposits and
savings accounts in recent years.<o:p></o:p></span>
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<b style="mso-bidi-font-weight: normal;"><span style="font-family: "Helvetica","sans-serif"; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">This strategy may less attractive following the
Reserve Bank of Australia’s (<st1:stockticker w:st="on">RBA</st1:stockticker>)
recent cut to the official cash rate.<o:p></o:p></span></b></div>
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<span style="font-family: "Helvetica","sans-serif"; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">The <st1:stockticker w:st="on">RBA</st1:stockticker>’s rate cut of 0.50%, investors are likely to
see reduced returns from their term deposits and cash savings over the coming
months, and potentially longer. This is likely to concern many investors, <b style="mso-bidi-font-weight: normal;">particularly those who are relying on their
money to fund a retirement that could last up to thirty years or more.</b><o:p></o:p></span></div>
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<span style="font-family: "Helvetica","sans-serif"; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">The <b style="mso-bidi-font-weight: normal;">main issue for cash investors</b>, as interest rates reduce, is that <b style="mso-bidi-font-weight: normal;">their money becomes less effective at
protecting against inflation</b>.<o:p></o:p></span></div>
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<span style="font-family: "Helvetica","sans-serif"; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">Term deposits and cash
savings generally don’t keep up with inflation over time, so the purchasing
power of your money could reduce. <b style="mso-bidi-font-weight: normal;">This
might mean that you don’t end up with the money you need to achieve your
financial goals.</b><o:p></o:p></span></div>
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<span style="font-family: "Helvetica","sans-serif"; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">For that, you <b style="mso-bidi-font-weight: normal;">generally need some exposure to growth
assets such as property and shares</b>. While they are <b style="mso-bidi-font-weight: normal;">more volatile than cash</b>, they offer the <b style="mso-bidi-font-weight: normal;">potential for higher returns over the long term</b>.<o:p></o:p></span></div>
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<span style="font-family: "Helvetica","sans-serif"; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">Often investors have
this perception that investing in growth assets is inherently risky, but these days
there are investment options that allow cautious investors to earn competitive returns,
yet still be well-placed to take advantage of opportunities that arise as
markets recover.<o:p></o:p></span></div>
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<span style="font-family: "Helvetica","sans-serif"; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">For example, many
superannuation funds offer a viable alternative to term deposits in the form of
conservative investment options. Importantly, <b style="mso-bidi-font-weight: normal;">your money remains within the superannuation environment</b>, which is a
tax effective way of saving for retirement.<o:p></o:p></span></div>
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<span style="font-family: "Helvetica","sans-serif"; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">By investing
conservatively through superannuation or your pension <b style="mso-bidi-font-weight: normal;">you get the safety you’re looking for as well as a tax-effective return</b>.
Superannuation earnings are taxed at a maximum of 15% and earnings on pension
assets are tax free.<o:p></o:p></span></div>
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<span style="font-family: "Helvetica","sans-serif"; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">Of course, super is only
suitable for retirement savings as your money cannot be accessed until you meet
a condition of release such as permanent retirement, but there are also
non-super options.<o:p></o:p></span></div>
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<span style="font-family: "Helvetica","sans-serif"; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">Other conservative
investment options can include <b style="mso-bidi-font-weight: normal;">defensive
share funds that target high regular income with lower volatility</b> than the
overall sharemarket. This approach helps to provide better capital protection
should the sharemarket fall.<o:p></o:p></span></div>
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<span style="font-family: "Helvetica","sans-serif"; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">These options may be
welcome news for investors who are concerned about volatility but keen to get
more out of their investments. <b style="mso-bidi-font-weight: normal;">Everyone’s
situation is different so it’s important to get financial advice that’s
relevant to your specific needs and objectives.</b><o:p></o:p></span></div>
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<span style="font-family: "Helvetica","sans-serif"; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">Ultimately, the right
strategy will come down to <b style="mso-bidi-font-weight: normal;">how much money</b>
you need to <b style="mso-bidi-font-weight: normal;">enjoy your retirement</b>,
how <b style="mso-bidi-font-weight: normal;">long you have to invest</b> it and
how much <b style="mso-bidi-font-weight: normal;">risk you are willing to take</b>.
A<b style="mso-bidi-font-weight: normal;"> financial adviser can help you
understand the various strategies available to reduce the impact of volatility
whilst still focusing on growth opportunities and quality returns.</b><o:p></o:p></span></div>
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<b style="mso-bidi-font-weight: normal;"><span style="font-family: "Helvetica","sans-serif"; mso-bidi-font-family: Arial; mso-fareast-language: EN-AU;">For further information
contact Hugh Kilpatrick from RIadvice-RetireInvest on 03 94671 0080.<o:p></o:p></span></b></div>
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<span style="font-family: "Helvetica","sans-serif"; font-size: 7pt; mso-bidi-font-family: Arial;">*Hugh Kilpatrick is an Authorised Representative of
RI Advice Group Pty Limited <st1:stockticker w:st="on">ABN</st1:stockticker> 23
001 774 125, AFSL 238429. This editorial does not consider your personal
circumstances and is of a general nature only. You must not act on the
information provided without first obtaining professional financial advice
specific to your circumstances.</span><span style="font-family: "Helvetica","sans-serif"; mso-bidi-font-family: Arial;"><o:p></o:p></span></div>Jorgohttp://www.blogger.com/profile/07076762361627206443noreply@blogger.com0tag:blogger.com,1999:blog-6863821344337556376.post-78948700895837587722012-06-19T11:25:00.000+10:002012-06-19T11:25:04.127+10:00Should your SMSF be working harder?<span style="font-family: "Helvetica","sans-serif"; mso-fareast-font-family: Calibri; mso-fareast-language: EN-AU;">Self Managed Super
Funds (SMSFs) are rapidly becoming the vehicle of choice for many who want more
control over how their retirement savings are invested, but given the economic
uncertainty we’ve experienced since the start of the global financial crisis,
it’s <b style="mso-bidi-font-weight: normal;">understandable that many SMSF
members are opting to stay in cash investments</b>.<o:p></o:p></span>
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<span style="font-family: "Helvetica","sans-serif"; mso-fareast-font-family: Calibri; mso-fareast-language: EN-AU;">By the end of the
2011 financial year the self managed super sector had ballooned to 456,000
funds with 867,000 members and $418 billion in assets. Contributions amount to
nearly $35 billion a year, making it the fastest growing sector of the
Australian superannuation industry, with almost double the growth in assets of
the industry as a whole.<span style="font-size: x-small;"><sup>1.</sup><o:p></o:p></span></span></div>
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<span style="font-family: "Helvetica","sans-serif"; mso-fareast-font-family: Calibri; mso-fareast-language: EN-AU;">This phenomenal
growth reflects the attraction SMSFs hold for many business owners and income
earners. The concept of having greater control over decisions and investment
choices may strike a chord with those who want to take a proactive interest in
their future prosperity; <b style="mso-bidi-font-weight: normal;">however an SMSF
may not be a suitable solution for everybody.</b> <o:p></o:p></span></div>
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<span style="font-family: "Helvetica","sans-serif"; mso-fareast-font-family: Calibri; mso-fareast-language: EN-AU;">With greater freedom comes greater responsibility
and there are administrative and compliance demands when running a fund and <b style="mso-bidi-font-weight: normal;">as an SMSF trustee you must keep up to date
with the rules and regulations affecting super and importantly develop a sound
investment strategy to suit your needs</b>. Interestingly, the desire for
greater choice and freedom over investment strategy seems to be <b style="mso-bidi-font-weight: normal;">contradicted by a heavy weighting of SMSF
investments in cash.</b><o:p></o:p></span></div>
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<span style="font-family: "Helvetica","sans-serif"; mso-fareast-font-family: Calibri; mso-fareast-language: EN-AU;">Over 60% of all
SMSF assets are directly invested in the narrow confine of either Australian
listed shares or cash and term deposits.<span style="font-size: x-small;"><sup>1.</sup><o:p></o:p></span></span></div>
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<a href="" name="Content"></a><a href="" name="top"></a><span style="mso-bookmark: Content;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: "Helvetica","sans-serif"; mso-fareast-font-family: Calibri; mso-fareast-language: EN-AU;">Any investment must
be consistent with your fund's written investment strategy</span></b></span><span style="mso-bookmark: Content;"><span style="font-family: "Helvetica","sans-serif"; mso-fareast-font-family: Calibri; mso-fareast-language: EN-AU;"> and while troubled
investment markets in recent years may have driven many to seek the security
that cash investments offer, it may be a good time to start questioning the
wisdom of that approach. <o:p></o:p></span></span></div>
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<b style="mso-bidi-font-weight: normal;"><span style="font-family: "Helvetica","sans-serif"; mso-fareast-font-family: Calibri; mso-fareast-language: EN-AU;">The recent <st1:stockticker w:st="on">RBA</st1:stockticker>
rate cut of 0.50% means that funds held in cash investments and term deposits,
are likely to have reduced returns.</span></b><span style="font-family: "Helvetica","sans-serif"; mso-fareast-font-family: Calibri; mso-fareast-language: EN-AU;"> This should be of
concern to SMSF investors who are relying on their money to fund a retirement
that could last up to thirty years or more. As interest rates reduce, their
money becomes less effective at protecting against inflation. <o:p></o:p></span></div>
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<span style="font-family: "Helvetica","sans-serif"; mso-fareast-font-family: Calibri; mso-fareast-language: EN-AU;">There will always
be a place to have some proportion retained in the cash and fixed interest
sectors, but the recent interest movements should be sending a strong signal
for SMSF investors to reconsider their position.<o:p></o:p></span></div>
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<span style="font-family: "Helvetica","sans-serif"; mso-fareast-font-family: Calibri; mso-fareast-language: EN-AU;">These days there
are investment options that allow cautious investors to earn competitive
returns, yet still be well-placed to take advantage of opportunities that arise
as markets recover.<o:p></o:p></span></div>
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<b style="mso-bidi-font-weight: normal;"><span style="font-family: "Helvetica","sans-serif"; mso-fareast-font-family: Calibri; mso-fareast-language: EN-AU;">Ultimately, the right investment strategy will come
down to how much you need, how long you have to invest and how much risk you believe
suits you - so it’s important to get financial advice that’s relevant to your
specific needs, objectives and investment timeframes.<o:p></o:p></span></b></div>
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<span style="font-family: "Helvetica","sans-serif"; mso-fareast-font-family: Calibri; mso-fareast-language: EN-AU;">If you have an
SMSF, now is an ideal time to speak to your adviser about how you can take full
advantage of the freedom you have to be creative with your investment strategy
within your fund.<o:p></o:p></span></div>
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<b><span style="font-family: "Helvetica","sans-serif"; mso-fareast-font-family: Calibri; mso-fareast-language: EN-AU;">For further information, or to speak to an Adviser,
contact Hugh Kilpatrick* from RIadvice-RetireInvest on 03 9471 0080.<o:p></o:p></span></b></div>
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<span style="font-family: "Helvetica","sans-serif"; font-size: 7pt;">*Hugh Kilpatrick is an Authorised
Representative of RI Advice Group Pty Limited (<st1:stockticker w:st="on">ABN</st1:stockticker>
23 001 774 125), Australian Financial Services Licence 238429. This editorial
does not consider your personal circumstances and is general advice only. You
should not act on the information provided without first obtaining professional
financial advice specific to your circumstances. <o:p></o:p></span></div>
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<span style="font-family: Arial;"><sup><span style="font-size: 8pt; mso-bidi-font-family: Arial; mso-bidi-font-weight: bold; mso-fareast-language: EN-AU; mso-font-kerning: 18.0pt;">1.</span></sup><span style="font-size: 8pt; mso-bidi-font-family: Arial; mso-bidi-font-weight: bold; mso-fareast-language: EN-AU; mso-font-kerning: 18.0pt;">Australian Tax Office - Self-managed superannuation
funds: A statistical overview 2009-10, April 2012</span></span></div>
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<br /></div>Jorgohttp://www.blogger.com/profile/07076762361627206443noreply@blogger.com0tag:blogger.com,1999:blog-6863821344337556376.post-48026994313430860162012-05-31T14:57:00.000+10:002012-05-31T14:57:24.753+10:00The five key questions on aged care<i style="mso-bidi-font-style: normal;"><span style="mso-bidi-font-weight: bold;"><span style="color: #393939;"><span style="font-family: Helvetica;">If you are considering aged care for someone
close to you, there are five questions you need answered to ensure the best
care at the most reasonable cost. <o:p></o:p></span></span></span></i>
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<span style="color: #393939; font-family: Helvetica;">It's a fact of life that many of us will need to one day
face the daunting task of seeking aged care for someone close to us. At first
the complexity of dealing with the personal, practical and financial issues may
seem overwhelming, but there are positive ways to address these issues and
there is help available to navigate through them.</span></div>
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<span style="mso-bidi-font-weight: bold;"><span style="color: #393939;"><span style="font-family: Helvetica;">A specialist in the
field of aged care advice<i style="mso-bidi-font-style: normal;"> </i>can help
people work through the aged care maze.<i style="mso-bidi-font-style: normal;"><o:p></o:p></i></span></span></span></div>
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<span style="mso-bidi-font-weight: bold;"><span style="color: #393939; font-family: Helvetica;">Sooner or later many
of us need to deal with a relative who is no longer able to manage independently
in their own home. Health and mobility deterioration will eventually lead to a
need for alternative care arrangements. For the relative who is trying to
facilitate this life change, it is often quite a shock when they come up
against the complexity of the transitional and financial issues involved.</span></span></div>
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<span style="color: #393939; font-family: Helvetica;">To help people gain some perspective and identify what the
priorities should be, a focus on <b style="mso-bidi-font-weight: normal;">five
key questions on aged care</b> may help.</span></div>
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<b><span style="color: #393939;"><span style="font-family: Helvetica;">Question 1 – what are the aged care options?<o:p></o:p></span></span></b></div>
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<span style="color: #393939; font-family: Helvetica;">The degree of care needed is evaluated by an Aged Care
Assessment Team (ACAT). ACAT comprises health professionals and social workers
and their role is to assess if the person needs assistance services at home or
if a move to residential care is needed. In-home care can be arranged through
the Department of Health in the form of Home and Community Care (HACC),
Community Aged Care Packages (CACPs) and Respite Care Services. </span></div>
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<span style="color: #393939;"><span style="font-family: Helvetica;">If it appears that independent living is too much of a
challenge then they may recommend <b style="mso-bidi-font-weight: normal;">residential
aged care</b>. <span style="mso-bidi-font-weight: bold;">T</span>here are two
main types of residential care available - <b style="mso-bidi-font-weight: normal;">hostels
and nursing homes</b>. <b style="mso-bidi-font-weight: normal;">Hostels provide
assistance with daily living needs</b>, such as meals, laundry and cleaning as
well as a degree of nursing care. <b style="mso-bidi-font-weight: normal;">Nursing
homes offer more intensive support for higher level of care</b>, including full
time nursing care. When deciding on a facility i<span style="mso-bidi-font-weight: bold;">t is helpful to take a look first hand - to get a feeling for the
standard of care available and to start comparing the pros and cons of
different aged care homes.<o:p></o:p></span></span></span></div>
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<b><span style="color: #393939;"><span style="font-family: Helvetica;">Question 2 – what costs are involved?<o:p></o:p></span></span></b></div>
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<span style="color: #393939;"><span style="font-family: Helvetica;"><span style="mso-bidi-font-weight: bold;">It has been identified
that the costs of residential care can be the most confronting aspect for the
uninitiated.</span><i> </i>While the <b style="mso-bidi-font-weight: normal;">cost
of care is partly funded by the government</b>, there can still be significant
costs to residents which are partly based on their level of assets and income. <b style="mso-bidi-font-weight: normal;">It may well be that the resident is
required to contribute toward an entry fee plus ongoing daily care fees.</b></span></span></div>
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<span style="color: #393939; font-family: Helvetica;">Hostels and nursing homes each use different structures to
calculate entry fees. <b style="mso-bidi-font-weight: normal;">Hostels ask for an
up-front bond</b>, from which <b style="mso-bidi-font-weight: normal;">they will
take interest earnings plus an annual deduction of the bond amount</b>. <b style="mso-bidi-font-weight: normal;">Nursing homes</b> do not require a bond,
but will instead <b style="mso-bidi-font-weight: normal;">charge their entry fee
as a daily amount</b>. In both cases the <b style="mso-bidi-font-weight: normal;">resident's
assets may be assessed by Centrelink</b> to determine the level of fee and the
degree of subsidy made by the government.”</span></div>
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<span style="color: #393939;"><span style="font-family: Helvetica;"><b style="mso-bidi-font-weight: normal;"><span style="mso-bidi-font-style: italic;">B</span>oth hostels and nursing homes also
charge daily care fees on top of the entry fee</b>. The basic daily care fee is
generally payable by all residents, whereas <b style="mso-bidi-font-weight: normal;">the income tested fee is based on the resident’s level of income</b>. At
the very least, the daily care fees will be a large proportion of the age
pension, but they can be significantly higher if a person’s assessable income
is over a certain level. </span></span></div>
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<span style="color: #393939; font-family: Helvetica;">While all these costs may seem difficult to digest, it is <b style="mso-bidi-font-weight: normal;">vital to seek some advice on strategies to
minimise them through correct structuring of assets</b>. There are ways and
means to limit fee liabilities so that aged care doesn't end up costing more
than is necessary.”</span></div>
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<span style="color: #393939;"><span style="font-family: Helvetica;"><b>Question 3 -</b> <b>What will happen to the family home?<o:p></o:p></b></span></span></div>
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<span style="color: #393939; font-family: Helvetica;">In many cases, <b style="mso-bidi-font-weight: normal;">the
family home will be the major asset</b> involved and once the reality of the
costs of aged care start to become apparent, it may seem inevitable that the
family home needs to be sold to fund these costs - <b style="mso-bidi-font-weight: normal;"><span style="mso-bidi-font-style: italic;">t</span>he situation with the
family home needs to be carefully considered</b>.</span></div>
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<span style="color: #393939;"><span style="font-family: Helvetica;"><b style="mso-bidi-font-weight: normal;">If a spouse still
remains at home then the value of that home is not assessable for entry fee
purposes and this will serve to reduce the fee contribution required by the
aged care facility.</b> If the home is left vacant, however, then it is
assessable. The question here is <b style="mso-bidi-font-weight: normal;">whether
it is better to sell the home or to retain it and rent it out</b> - there is no
simple answer to this; as it requires a careful analysis of the resident's
other assets and income. This is one area where an adviser is often able to
relieve clients of the worry of making the wrong decision, by providing an
objective analysis of where the home can fit into the overall plan for
minimising fees and maximising income.”</span></span></div>
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<b style="mso-bidi-font-weight: normal;"><span style="color: #393939;"><span style="font-family: Helvetica;">Question 4 – what are
the impacts on the age pension?<o:p></o:p></span></span></b></div>
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<span style="color: #393939; font-family: Helvetica;">Maintaining age pension entitlements can be <b style="mso-bidi-font-weight: normal;">a very sensitive area for many people</b>.
If selling the family home is being considered, then it is important to factor
in how this may affect pension levels, as the value of the home should fall
under the assets test once sold. </span></div>
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<span style="color: #393939; font-family: Helvetica;">It may well be possible to keep the home, rent it out and
use the income from this to fund the entry fees. By doing this, both the value
of the home and the rental income generated may still be exempt from the assets
and income tests respectively. Again, there are no simple answers here; it will
depend on individual circumstances. The pension may only be one component of
income, so it is <b style="mso-bidi-font-weight: normal;">vital to consider the
total income picture</b> and not just the pension in isolation.</span></div>
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<b style="mso-bidi-font-weight: normal;"><span style="color: #393939;"><span style="font-family: Helvetica;">Question 5 – how can
ongoing income be maximised?<o:p></o:p></span></span></b></div>
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<span style="color: #393939; font-family: Helvetica;">Optimising ongoing income for the aged care resident can be
quite a challenge once all the complexities of the aged care regime are taken
into account. The need to minimise fees, maximise the age pension, deal with
the family home and structure other financial investments will all have an
impact on what ongoing income can be generated.</span></div>
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<span style="color: #393939;"><span style="font-family: Helvetica;"><b style="mso-bidi-font-weight: normal;"><span style="mso-bidi-font-style: italic;">A</span>nalysing all these issues and structuring
the most effective solution takes some skill to organise.</b> There is a real
risk of poor decisions being made if someone unfamiliar with the aged care
environment either puts these issues in the too hard basket or fails to
properly assess how all the factors interrelate. Anyone in this situation is strongly
advised to seek professional advice from a qualified financial planner to find
the right answers to these five critical questions.</span></span></div>
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<b style="mso-bidi-font-weight: normal;"><span style="color: #393939;"><span style="font-family: Helvetica;">For further
information, contact Hugh Kilpatrick* from RIadvice-RetireInvest on 03 9471
0080.<o:p></o:p></span></span></b></div>
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<span style="color: #393939; font-family: Helvetica; font-size: xx-small;">*Hugh Kilpatrick is an Authorised Representative of RI Advice
Group Pty Limited (ABN 23 001 774 125), AFSL 238429. This editorial does not
consider your personal circumstances and is general advice only. <b style="mso-bidi-font-weight: normal;">You should not act on any information
without considering your personal needs, circumstances and objectives.</b> We strongly
recommend you obtain professional financial advice specific to your own circumstances.</span></div>Jorgohttp://www.blogger.com/profile/07076762361627206443noreply@blogger.com0tag:blogger.com,1999:blog-6863821344337556376.post-11730194875670797132012-03-19T11:18:00.001+11:002012-03-19T11:19:01.882+11:00Should investors look at the small picture?<div class="MsoNormal" style="margin: 0cm 0cm 0pt;">
<span style="font-family: Calibri;">By Matthew Sherwood, Head of Investment Market Research,
Perpetual</span></div>
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<span style="font-family: Calibri;">This week’s <b>economic data in Australia</b> has confirmed
what <b>Australia’s company reporting season</b> has been telling us; there is
only modest growth momentum in both the economy and earnings at present. There
were low expectations heading into the February 2012 reporting season, but
large cap stocks had difficulty clearing even these hurdles, whereas <b>small
cap stocks (particularly mining services and consumer discretionary) did much
better</b>. Companies exposed to resource volumes and the Capex cycle did
reasonably well, whereas the remainder struggled in the wake of soft revenue
growth, sticky cost pressures and the high Australian dollar, which culminated
in margin pressures being the prominent theme. </span></div>
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<span style="font-family: Calibri;">The number of <b>positive earnings surprises (64)</b> was similar
to the number of <b>negative surprises (62)</b>, and overall FY12 earnings per
share growth declined to around 2%. However, the downgrades-to-upgrades ratio
bottomed (from 0.3x in mid-January 2012) and is now starting to recover (0.8x
in late February), which indicates that almost as many stocks are being
upgraded as downgraded. This is the best result for a year. Although earnings
growth was modest during the season and there was little in the way of capital
management (only Westfield and Telecom New Zealand announced notable buybacks
plans), <b>the market experienced some very positive price reaction to their
respective results</b>. Clearly the market was priced for bad news on many
fronts and <b>stock prices rose when the results were a bit better</b>. </span></div>
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<span style="font-family: Calibri;">Consequently, two smaller themes have become prominent in
the prevailing market environment. The first is ‘<b>value</b>’, which allows <b>oversold
companies to experience price growth</b> even though the macroeconomic
environment may not improve. The second is ‘<b>quality</b>’, with firms that
have <b>a good earnings profile, strong balance sheets and that can provide
income growth</b>, being highly prized by investors. </span></div>
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<span style="font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">A number of headwinds remain for investors. Next
Wednesday, the December quarter 2012 national accounts are released and recent
data has indicated that the result is likely to be soft, even though current
market expectations are for a 0.7% quarterly rise. Recent data on investment,
credit, housing and consumer spending, have suggested that the balance of risks
to this result is to the downside. However regardless of the result, investors
should not be a too perturbed, as any growth weakness likely reflects the
exchange rate rising before the mining boom arrives. This is just a timing
issue – investment in mining equipment may be a bit soft in Decemeber 2011, but
it is expected to rise by 36% in 2012 and by another 36% in 2013. The problem
is that <b>it is entirely mining based</b>. Indeed, <b>there are almost no
plans to boost Capex outside mining anytime soon</b> and the Reserve Bank
recently noted that ‘the import intensity of current mining investment projects
is also higher than in earlier years…range of inputs…that have historically
been sourced locally are now often being imported.’ </span>Jorgohttp://www.blogger.com/profile/07076762361627206443noreply@blogger.com0tag:blogger.com,1999:blog-6863821344337556376.post-3672205287130583122012-01-18T11:19:00.000+11:002012-05-31T14:57:24.736+10:00Smoother sailing on the investment high seas<div class="MsoNormal" style="margin: 0cm 0cm 6pt; mso-layout-grid-align: none;">
<span lang="EN-US" style="font-family: "Arial","sans-serif"; mso-ansi-language: EN-US; mso-bidi-font-family: Cambria; mso-bidi-language: HI; mso-fareast-language: EN-AU;">There is no doubt that 2011 was a tough year with many
investors finding volatility in the sharemarkets woefully challenging – the US
debt debate, revolts in the Middle East, Greece’s near economic collapse, the
European debt crisis, the threat of another recession in the US and fears of a
Chinese slowdown all played a part in making the year a <u>very</u> bumpy ride.</span></div>
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<br /></div>
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<span style="font-family: Helvetica;">So is 2012 a good year to invest? Choosing the best time to
invest is notoriously difficult. Even the world's best economists don’t always know
when markets are heading up or down.</span></div>
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<br /></div>
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<span style="font-family: Helvetica;">There may be a way to safeguard yourself from investing your
money at the worst possible time - it's called “dollar cost averaging.”</span></div>
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<br /></div>
<div class="MsoNormal" style="margin: 0cm 0cm 6pt; mso-layout-grid-align: none;">
<span style="font-family: Helvetica;">Dollar cost averaging is simple strategy with a lot of power
- basically, all you have to do is invest a set amount of money at regular
intervals, for example $100 at the start of each month.</span></div>
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<br /></div>
<div class="MsoNormal" style="margin: 0cm 0cm 6pt; mso-layout-grid-align: none;">
<span style="font-family: Helvetica;">This takes the stress out of trying to time the market by
smoothing out your investment over time.</span></div>
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<br /></div>
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<span style="font-family: Helvetica;">One month you may buy $100 worth of shares at $10 each, the
next month the price could be $9.50, and the next month $9. This means you attempt
to mitigate the risk of buying all your shares at an inopportune time.</span></div>
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<br /></div>
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<span style="font-family: Helvetica;">With this strategy you can worry less about investment
prices day-to-day and chopping and changing your plan based on investment tips
from neighbours and taxi drivers.</span></div>
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<br /></div>
<div class="MsoNormal" style="margin: 0cm 0cm 6pt; mso-layout-grid-align: none;">
<span style="font-family: Helvetica;">While this may sound like a simple, almost intuitive
concept, when left to their own devices most investors appear to have the seemingly
bad habit of buying more shares when prices are high, and less when prices are
low.</span></div>
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<br /></div>
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<span style="font-family: Helvetica;">This might be human nature. When markets are booming and
investors are happy, everyone wants a piece of the action. But when markets are
falling, people panic and tend to want to put their money somewhere 'safe'
while markets recover.</span></div>
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<br /></div>
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<span style="font-family: Helvetica;">Unfortunately this “human nature” means many investors miss
out on the opportunity to buy shares when they are effectively on sale, and
even worse miss out on the big gains that can be made when markets recover.</span></div>
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<br /></div>
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<span style="font-family: Helvetica;">Dollar cost averaging cuts out the emotional element to
investing - replacing irrational spur of the moment decisions with a thoughtful
long-term investment plan that will see you building wealth consistently over
time.</span></div>
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<br /></div>
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<span style="font-family: Helvetica;">With market volatility high and so much noise in the press
about the state of the economy, now is the perfect time to take the emotional
elements out of investing and get your investment plans back on track – whether
that’s setting yourself up for your ideal retirement or lifestyle goals such as
buying a new house.</span></div>
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<br /></div>
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<b><span style="font-family: Helvetica;">For more information about dollar cost averaging and
getting your financial wellbeing on track, call Hugh Kilpatrick* on 03 9471 0080
today.</span></b></div>
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<span style="font-family: Helvetica;"><span lang="EN-US" style="font-size: 9pt; mso-ansi-language: EN-US; mso-fareast-font-family: "MS ??";">*<span style="font-size: x-small;">Hugh
Kilpatrick is an Authorised Representative of RI Advice Group Pty Limited (<st1:stockticker w:st="on">ABN</st1:stockticker> 23 001 774 125), Australian Financial Services
Licence 238429. <span style="mso-bidi-font-weight: bold;"><strong>This article does not
consider your personal circumstances and is general advice only.</strong> You should not
act on the information provided without first obtaining professional financial
advice specific to your circumstances.</span></span></span></span></div>Jorgohttp://www.blogger.com/profile/07076762361627206443noreply@blogger.com0tag:blogger.com,1999:blog-6863821344337556376.post-85897487681295432972012-01-18T10:13:00.001+11:002012-01-18T10:16:40.493+11:00Financial markets in 2012 and a sound investment strategy<span style="font-size: 11.5pt;"><span style="font-family: Arial;">I trust you had an enjoyable
Christmas break and wish you a very Happy New Year! <o:p></o:p></span></span><br />
<br />
<span style="font-size: 11.5pt;"><span style="font-family: Arial;">There is no doubt that 2011 was
a tough year with many investors finding the heightened volatility challenging.
Market volatility was driven by a number of events – the US debt debate,
revolts in the Middle East, Greece’s near economic collapse, the European debt
crisis, the threat of another recession in the US and fears of a Chinese
slowdown. Or more correctly, the sensationalizing of these things.<o:p></o:p></span></span><br />
<br />
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<span style="font-size: 11.5pt;"><span style="font-family: Arial;">This update is designed to
highlight some of the important themes at play for financial markets in 2012
and emphasise the importance of retaining a sound investment strategy during
uncertain times. <o:p></o:p></span></span></div>
<br />
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<span style="font-family: Arial;"><b><span style="font-size: 11.5pt;">The market will continue to
focus on economic news… </span></b><span style="font-size: 11.5pt;"><o:p></o:p></span></span></div>
<span style="font-size: 11.5pt;"><span style="font-family: Arial;">Volatility over the past year
can be largely attributed to the market’s reaction to the daily economic news
flow out of Europe, the US and China. While we expect 2012 to be no different,
we do see tentative signs of improvement as we head into the New Year. <o:p></o:p></span></span><br />
<br />
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<span style="font-size: 11.5pt;"><span style="font-family: Arial;">While the situation in Europe
could indeed worsen, should policymakers be able to avoid the worst case
scenario – <i>that is, a complete collapse of the banking system </i>– the rest
of the world should be able to continue its recovery and/or growth trajectory.<o:p></o:p></span></span></div>
<br />
<div class="Default" style="margin: 0cm 0cm 0pt;">
<span style="font-size: 11.5pt;"><span style="font-family: Arial;">Importantly, global growth has
been less reliant on European economic growth over the last couple of decades.<o:p></o:p></span></span></div>
<br />
<div class="Default" style="margin: 0cm 0cm 0pt;">
<span style="font-size: 11.5pt;"><span style="font-family: Arial;">Therefore, if the issues in
Europe can be contained and avoid a full blown recession, the US should be able
to resume its moderate recovery, and for emerging markets the process of
urbanisation and the growth of the middle class consumer.<o:p></o:p></span></span></div>
<br />
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<span style="font-size: 11.5pt;"><span style="font-family: Arial;">In Europe, policymakers also
start the New Year with a greater willingness to acknowledge the core problems
facing the region. This follows the appointment of more
economically-disciplined leaders in Italy, Spain and Greece.<o:p></o:p></span></span></div>
<br />
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<span style="font-size: 11.5pt;"><span style="font-family: Arial;">In Australia, while it is true
that the economy has slowed – <i>particularly in the non-resource side of the
economy </i>– policymakers have plenty of “ammunition” in the form of further
cuts to interest rates and increased government spending.<o:p></o:p></span></span></div>
<br />
<div class="Default" style="margin: 0cm 0cm 0pt;">
<span style="color: black; font-family: "Arial","sans-serif"; font-size: 11.5pt;">The medium and long-term drivers for the Australian economy also
remain firmly intact. These factors should see record levels of infrastructure
spending over the next decade. Deloitte-Access Economics puts the amount of
“mega-projects” at approximately $400bn as at October 2011 – equal to
approximately a third of total GDP!<o:p></o:p></span></div>
<br />
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<span style="font-family: Arial;"><b><span style="font-size: 11.5pt;">Sharemarkets: some
attractive fundamental attributes</span></b><span style="font-size: 11.5pt;"><o:p></o:p></span></span></div>
<span style="font-size: 11.5pt;"><span style="font-family: Arial;">Global sharemarkets were mostly
lower over the year – but what may come as a surprise is that <b style="mso-bidi-font-weight: normal;">the US was one of the best performing
markets</b>. The S&P500 ended the year flat, while the Dow Jones was up
more than 5%.<o:p></o:p></span></span><br />
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<span style="font-size: 11.5pt;"><span style="font-family: Arial;">This was despite the extreme
levels of volatility and negative news flow from the media.<o:p></o:p></span></span></div>
<br />
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<span style="font-size: 11.5pt;"><span style="font-family: Arial;">Over the same period, the
Aussie market recorded a decline of almost 15%. The weak relative performance
can be attributed to the poor performance of our two dominant sectors – <i>resources
and financials. </i>Most of these concerns reflected the potential impact from
a slowdown in the Chinese economy.<o:p></o:p></span></span></div>
<br />
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<span style="font-size: 11.5pt;"><span style="font-family: Arial;">The divergence in performance
between the Australian and US markets highlights the importance of geographical
diversification in an investment portfolio.<o:p></o:p></span></span></div>
<br />
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<span style="font-size: 11.5pt;"><span style="font-family: Arial;">Looking ahead, despite
expectations for continued high levels of volatility, we are comforted by a
number of attributes for the market both here and offshore – <i>valuations</i>,
<i>dividend yields </i>and <i>corporate balance sheets</i>.<o:p></o:p></span></span></div>
<br />
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<span style="font-size: 11.5pt;"><span style="font-family: Arial;">Valuations are at levels that are
considered low on a historical basis, indicating that the market has factored
in some of the worst possible eventualities. This is despite the continued
moderate recovery in the US and recent European efforts to resolve the debt
crisis.<o:p></o:p></span></span></div>
<br />
<div class="Default" style="margin: 0cm 0cm 0pt;">
<span style="font-size: 11.5pt;"><span style="font-family: Arial;">Dividend yields are also
attractive on many measures. The Australian market is trading on a grossed up
dividend yield of approximately 7% to 8%, which is attractive on a relative basis
to both cash and inflation.<o:p></o:p></span></span></div>
<br />
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<span style="color: black; font-family: "Arial","sans-serif"; font-size: 11.5pt;">Sustainability of these dividends should be well supported by
generally strong corporate balance sheets, low debt, high cash levels, and for
some sectors low historic percentage of earnings paid to shareholders in
dividends.<o:p></o:p></span></div>
<br />
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<span style="font-family: Arial;"><b><span style="font-size: 11.5pt;">Performance of best
performing sectors unlikely to be repeated… </span></b><span style="font-size: 11.5pt;"><o:p></o:p></span></span></div>
<span style="font-size: 11.5pt;"><span style="font-family: Arial;">The best performing traditional
asset class over the past 12 months was the fixed interest sector on a “flight
to safety” as investors sold riskier assets such as equities (shares).<o:p></o:p></span></span><br />
<br />
<div class="Default" style="margin: 0cm 0cm 0pt;">
<span style="font-size: 11.5pt;"><span style="font-family: Arial;">The extent of this risk
aversion was no clearer than in sovereign bond markets where the US 10-year
treasury yield sunk below 2.0%, while in Australia the equivalent touched 3.6%
- a record low.<o:p></o:p></span></span></div>
<br />
<div class="Default" style="margin: 0cm 0cm 0pt;">
<span style="font-size: 11.5pt;"><span style="font-family: Arial;">Looking ahead, we would caution
against chasing last year’s winners. With treasury yields already at record low
levels it is very difficult to repeat last year’s gains – interest rates cannot
fall indefinitely!<o:p></o:p></span></span></div>
<br />
<div class="Default" style="margin: 0cm 0cm 0pt;">
<span style="font-family: Arial;"><b><span style="font-size: 11.5pt;">Focus on your investment
strategy and long-term investment goals </span></b><span style="font-size: 11.5pt;"><o:p></o:p></span></span></div>
<span style="font-size: 11.5pt;"><span style="font-family: Arial;">While dealing with market
volatility is often difficult and investors with short term investment goals
may need to consider how market changes will affect them, it is during these
periods that the market provides a number of opportunities for patient and
disciplined investors with long term investment goals.<o:p></o:p></span></span><br />
<br />
<div class="Default" style="margin: 0cm 0cm 0pt;">
<span style="font-size: 11.5pt;"><span style="font-family: Arial;">Altering a long-term investment
strategy should also be considered against the negative implications of
frequent and undisciplined changes. Missing just a few of the best months in
equity markets may substantially reduce your overall return.<o:p></o:p></span></span></div>
<br />
<div class="Default" style="margin: 0cm 0cm 0pt;">
<span style="font-size: 11.5pt;"><span style="font-family: Arial;">Lastly, very few people have
increased their wealth by selling low and buying high. Unfortunately, this is a
typical response due to the psychology of investing. Markets reward those with
patience and discipline.<o:p></o:p></span></span></div>
<br />
<div class="Default" style="margin: 0cm 0cm 0pt;">
<span style="font-size: 11.5pt;"><span style="font-family: Arial;">Hugh Kilpatrick<o:p></o:p></span></span></div>
<span style="font-family: Arial;"><b><span style="font-size: 11.5pt;">RI Advice Adviser </span></b><span style="font-size: 11.5pt;"><o:p></o:p></span></span><br />
<span style="font-size: 11.5pt;"><span style="font-family: Arial;">*Authorised Representative <o:p></o:p></span></span><br />
<br />
<div class="MsoNormal" style="margin: 0cm 0cm 0pt;">
<span style="font-family: Calibri;"><span style="font-size: 8pt;">*Authorised Representative of
RI Advice Group Pty Limited ABN 23 001 774 125, AFSL 238 429. This information
does not consider your personal circumstances and is general advice only. You
should not act on this information without first obtaining professional
financial advice specific to your circumstances.</span></span></div>Jorgohttp://www.blogger.com/profile/07076762361627206443noreply@blogger.com0tag:blogger.com,1999:blog-6863821344337556376.post-16377888433260728942011-12-15T13:14:00.001+11:002012-01-18T10:20:19.755+11:00Ten Tips for Managing Debt (with a little bit of interest)<div class="WordSection1">
<div class="MsoBodyText2">
January is often a month when you look at the credit card statement and after a quick panic decide to do something about your debt position. To get you off to a good start here are ten quick and easy tips. <o:p></o:p></div>
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<span style="mso-list: Ignore;">1. </span><b><u>Draw up a budget:</u></b> It seems an obvious step, but few people do it effectively. Knowing what you <b>spend</b> and what you <b>earn</b>, <b>and the difference between the two</b> is a real leveller. Detail essential and non-essential expenditure. Decide how much you will save and how often. If you fall short on meeting bills and debt repayments, you'll know something's got to give on the outgoing side. Start to <b>cut back on the non-essential expenditure</b>. The reduction may only be for a limited period of time, until your debts get under control.<o:p></o:p></div>
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<span style="mso-list: Ignore;">2. </span><b><u>Keep some emergency money aside:</u></b> While you may be juggling your finances to meet all of your commitments, make sure you have <b>a small cash reserve</b>, usually <b>two months expenses</b> <b>at least</b>, for unforeseen circumstances. This will protect you from being forced to accept costly, short-term lending arrangements. It is widely held that an adequate emergency cash reserve should be in the order of $10,000. This could be held in your mortgage as advance payments if it was <b>immediately available on demand</b>.<o:p></o:p></div>
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<span style="mso-list: Ignore;">3. </span><b><u>Use a Cash Management Trust:</u></b> Set up your income flow, including your salary, interest and dividends from investments and rental income, to be paid into the one CMT. Organise then for <b>all debts to be paid from the account automatically</b>. Most CMT's can cater for this. It takes the worry out of paying things on time. The CMT may require an initial $5,000; but then you can’t let the balance drop below $1,000. You’ll pay the manager a fee of the net value of the funds, but the net interest you’ll receive will be much higher than that offered on most standard deposit accounts.<o:p></o:p></div>
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<br /></div>
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<span style="mso-list: Ignore;">4.<span style="font-family: "Times New Roman"; font-size-adjust: none; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> </span></span><b><u>Use taxation benefits:</u></b> While tax alone is the wrong reason on which to base investment decisions, it should certainly be a consideration, particularly in light of recent Government initiatives to encourage saving and investment by Australians. The change in the treatment of capital gains tax is one way investors can increase returns after <b>holding an investment for at least 12 months</b>. Increased after-tax returns can help repay debt.<o:p></o:p></div>
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<br /></div>
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<span style="mso-list: Ignore;">5. </span><b><u>Be smart with lump sums:</u></b> You may be tempted on receiving a lump-sum payment like <b>a tax return, inheritance or windfall gain</b> to take that much-deserved holiday, new wardrobe or buy the latest Lotus. Don't. The short-term satisfaction won't last, particularly with debt collectors at your door. Use the money to <b>reduce your debt to more manageable levels or invest half for the longer term</b>.<o:p></o:p></div>
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<span style="mso-list: Ignore;">6. </span><b><u>Pay your debts automatically:</u></b> Talk to your employer to see whether you can <b>have your salary paid into multiple accounts</b>, including your debt accounts. The obvious benefits here are that your income flows will be better managed and the money disappears before you get it, thus reducing the temptation to spend more instead of repaying debt. Alternatively, have <b>set amounts deducted from a nominated account</b> to automatically pay outstanding debts. The essential point here is to make sure you have enough money in the account when the deduction falls due, otherwise your bank will hit you with a nasty fee for dishonouring the arrangement. Banks normally have a minimum account balance of, say, $500. Below this an account-keeping fee is charged.<o:p></o:p></div>
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<span style="mso-list: Ignore;">7. </span><b><u>Get smart with credit:</u></b> If used wisely, credit cards and lines of credit can get you ahead at a low interest cost. <b>Pay all of your income into your line of credit mortgage</b> and use your credit card to pay all your bills and outgoings. Then, just before the interest-free period on the card ends, draw down from your line of credit to pay the card bill. The <b>danger</b> here, of course, is that you <b>spend too freely</b> on clothes, restaurant meals and other non-essentials, and you effectively pay for it with equity from your home. Even though the interest rate is low, such behaviour could put you years behind in paying off your house and building an investment portfolio. <b>Budget your money!</b><o:p></o:p></div>
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<span style="mso-list: Ignore;">8. </span><b><u>Consolidate:</u></b> Pool all of your debts into one. The benefits here are that the <b>overall interest cost may be lower</b> than the interest cost you may be paying on some individual debts. This would certainly be the case if you used a line of credit facility. If the facility was attached to your mortgage, however, you may be eating into the equity on your home, which is an unwise strategy. See previous.<o:p></o:p></div>
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<span style="mso-list: Ignore;">9. </span><b><u>Be wary of “interest-free” offers:</u></b> These are broadly offered on electrical goods and furniture but can be a trap because the interest rates you may be required to pay at the end of the interest-free period are <b>usually extremely high</b>. Before buying into such an offer, make sure you have adequate cash flows to enable you to make high regular repayments with a view to <b>paying off the loan before the end of the interest-free period</b>.<o:p></o:p></div>
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<span style="mso-list: Ignore;">10. </span><b><u>Be wary of short-term lending facilities:</u></b> Money exchange services are an example, and they can be <b>very costly</b>. A new generation of credit providers in Australia, known as “pay day lenders”' operate national distribution networks and specialise in short-term, high-cost loans to consumers experiencing a cash crisis. Such facilities should never be used.<o:p></o:p></div>
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As “rules of thumb;” <b><u>Never</u> buy anything on credit</b>. <b>Spend <u>less</u> than you earn</b>. <b>Make a budget item for the <u>amount you will save</u></b>. <b>Put your savings somewhere where it is <u>harder to get out</u></b>. <o:p></o:p></div>
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<b><u>Stick to your goals more often than you do not.<o:p></o:p></u></b></div>
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For help, call Hugh Kilpatrick* of RIadvice Group on 03 9471 0080<o:p></o:p></div>
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<span lang="EN-US" style="font-size: x-small;">*Hugh Kilpatrick is an Authorised Representative of RI Advice Group Pty Limited (ABN 23 001 774 125), Australian Financial Services Licence 238429. This editorial does not consider your personal circumstances and is general advice only. You should not act on any recommendation without considering your personal needs, circumstances and objectives. We recommend you obtain professional financial advice specific to your circumstances.</span><span style="font-family: "Calibri","sans-serif"; font-size: 11pt;"><o:p></o:p></span></div>
</div>Jorgohttp://www.blogger.com/profile/07076762361627206443noreply@blogger.com0tag:blogger.com,1999:blog-6863821344337556376.post-47395489467918344672011-11-07T13:20:00.001+11:002012-01-18T10:15:24.167+11:00A helping hand when you need it - Aged Care<div class=WordSection1><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span style='font-family:"Helvetica","sans-serif"'>With Australia’s ageing population growing at a rapid rate, more and more people are facing the challenge of making aged care decisions for themselves or their loved ones. <o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span style='font-family:"Helvetica","sans-serif"'>This can be an extremely difficult time for everyone involved, and <b>the financial decisions you make now could have a significant impact on you or your loved one’s future</b>. So it’s important to get professional advice to ensure you understand the big picture, before you make any long-term decisions.<o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span style='font-family:"Helvetica","sans-serif"'>Realising your loved one is unable to support themself can be a deeply emotional time and with so many things to consider, it can be difficult to know if you’re making the right decisions.<o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span style='font-family:"Helvetica","sans-serif"'>To begin with, you may need to determine <b>whether your loved one needs a little extra help around the house</b>, or <b>needs to move into an aged care facility</b>.<o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span style='font-family:"Helvetica","sans-serif"'>Before making any decisions, your loved one will <b>need to be assessed by an Aged Care Assessment Team (ACAT)</b> to determine what level of care they require.<o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><b><span style='font-family:"Helvetica","sans-serif"'>Options</span></b><span style='font-family:"Helvetica","sans-serif"'> include <b>community care programs and support</b> for older Australians who wish to stay at home, <b>short-term or respite care</b>, low level care such as <b>a hostel</b>, or high level care in <b>a nursing home</b>.<o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span style='font-family:"Helvetica","sans-serif"'>If your loved needs to move into an aged care facility, there will be a lot of things to consider such as <b>whether to sell the family home</b>, how to <b>fund accommodation expenses</b> and <b>daily care fees</b>, and <b>how to invest the money</b> for your loved one’s future as well as future generations.<o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span style='font-family:"Helvetica","sans-serif"'>In many cases, to enter an aged care facility your loved one will be required to <b>pay daily care fees</b> and either <b>an accommodation bond or annual accommodation charge</b>, depending on the level or care required.<o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span style='font-family:"Helvetica","sans-serif"'>These expenses are <b>subject to asset and income testing</b>, so whether or not you sell <b>the family home will have a huge impact</b> on how much you’re likely to pay, and of course your Centrelink entitlements.<o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span style='font-family:"Helvetica","sans-serif"'>A <b>financial adviser is a calm voice</b> at this difficult time and can help you to understand the accommodation bonds, annual charges, the implications of selling the family home, and arrange your finances to help put you in the best overall financial position. They can also be <b>a useful </b></span><b>objective observer</b> <span style='font-family:"Helvetica","sans-serif"'>should there be any family disagreements on the best course of action. <o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span style='font-family:"Helvetica","sans-serif"'>Additionally, we can also help you with <b>enduring powers of attorney</b>, adjusting <b>your Will</b> to reflect your changing living arrangements and other estate planning strategies.<o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span style='font-family:"Helvetica","sans-serif"'>Moving a loved one into an aged care facility can be a difficult time, both emotionally and financially. That’s why it makes sense to seek help from a financial adviser, preferably early before a trigger event occurs. That way your loved one can still be involved in financial decisions, and you can ensure you make the right decisions for their future.<o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><b><span style='font-family:"Helvetica","sans-serif"'>For more information on aged care or a helping hand to make the right decisions for your<a name="_GoBack"></a> family, call Hugh Kilpatrick* on 03 9471 0080 today.</span></b><span style='font-family:"Helvetica","sans-serif"'><o:p></o:p></span></p><p class=MsoNormal><span style='font-size:9.0pt;font-family:"Helvetica","sans-serif"'>* Authorised Representative of RI Advice Group Pty Limited ABN 23 001 774 125, AFSL 238429. This editorial does not consider your personal circumstances and is general advice only. You should not act on the information provided without considering your personal needs, circumstances and objectives. We recommend you obtain professional financial advice specific to your circumstances.</span><span style='font-family:"Calibri","sans-serif"'><o:p></o:p></span></p></div>Jorgohttp://www.blogger.com/profile/07076762361627206443noreply@blogger.com0tag:blogger.com,1999:blog-6863821344337556376.post-78703017850355806542011-10-24T17:17:00.001+11:002012-01-18T10:15:04.002+11:00Terminal illness and superannuation - Estate planning and testamentary trusts - Debts and Centrelink assessment<div class=WordSection1><p class=Default><b><span style='font-size:13.0pt'>Terminal illness and superannuation </span></b><span style='font-size:13.0pt'><o:p></o:p></span></p><p class=Default><span style='font-size:11.0pt'>One of the most difficult periods in a person’s life is when they are diagnosed with a terminal illness. As personal issues become the main focus, it’s easy to lose sight of one’s financial situation. However, with prudent planning, the financial burden can be eased and assets can be maximised for surviving beneficiaries. <o:p></o:p></span></p><p class=Default><span style='font-size:11.0pt'>One of the key assets to consider upon terminal illness is superannuation. A member of a super fund with a terminal medical condition can generally access their superannuation benefits as a tax free lump sum. The lump sum may be required for immediate medical or personal reasons. Although it may be tempting to cash the entire super balance as a lump sum, it may be advantageous to leave a portion in the fund particularly where a spouse or children are beneficiaries. <o:p></o:p></span></p><p class=Default><span style='font-size:11.0pt'>Following death, a number of strategies can be used with the super fund. Certain beneficiaries of a lump sum are eligible for a boost to the super benefit, known as the anti-detriment payment. This payment represents a refund of the tax paid in the account. Furthermore, tax effective income streams can be paid to certain beneficiaries to meet ongoing needs. <o:p></o:p></span></p><p class=Default><span style='font-size:11.0pt'>It’s important to seek financial advice if you suffer a terminal illness as the best financial planning strategy depends on your personal situation and objectives.<o:p></o:p></span></p><p class=Default><span style='font-size:11.0pt'><o:p> </o:p></span></p><p class=Default><b><span style='font-size:13.0pt'>Estate planning and testamentary trusts </span></b><span style='font-size:13.0pt'><o:p></o:p></span></p><p class=Default><span style='font-size:11.0pt'>A testamentary trust can be an effective estate planning tool, providing asset protection, flexibility and the tax effective distribution of wealth. A testamentary trust can be set up by an appropriate clause in the Will and is set up following death using estate assets. You can also use superannuation and insurance proceeds to fund the trust. <o:p></o:p></span></p><p class=Default><span style='font-size:11.0pt'>Testamentary trusts are normally discretionary trusts, offering flexibility. The trustee can vary the income distributions each year depending on the beneficiaries’ circumstances. This can generate tax savings, particularly if there are a significant number of children or grandchildren in the family. Minors who are beneficiaries of a testamentary trust pay tax on trust income at normal marginal tax rates. Given the low income tax offset, individual taxpayers can receive income up to $16,000 in the 2011/12 financial year without paying tax (excluding other tax offsets). <o:p></o:p></span></p><p class=Default><span style='font-size:11.0pt'>A testamentary trust could be used to provide greater control over the distribution of the estate assets. For example, a beneficiary may only become entitled to capital from the trust upon attaining a certain age. <o:p></o:p></span></p><p class=Default><span style='font-size:11.0pt'>There are some considerations with testamentary trusts. Firstly, the estate may be delayed until grant of probate is completed. This further delays the establishment of the trust. Secondly, the estate may be contested, so the trust may have reduced assets available for beneficiaries. <o:p></o:p></span></p><p class=Default><span style='font-size:11.0pt'>Testamentary trusts could be used to provide for your beneficiaries. Furthermore consider how your parents could use a testamentary trust to effectively transfer wealth to you and your beneficiaries. Financial and legal advice is important when considering your estate plan, including the need for a testamentary trust.<o:p></o:p></span></p><p class=Default><span style='font-size:11.0pt'><o:p> </o:p></span></p><p class=Default style='page-break-before:always'><b><span style='font-size:13.0pt'>Debts and Centrelink assessment </span></b><span style='font-size:13.0pt'><o:p></o:p></span></p><p class=Default><span style='font-size:11.0pt'>If you receive (or are about to receive) a Centrelink payment you should understand the rules for assessment of debts. Generally, the value of an asset under the assets test is reduced by any outstanding charge or debt over that asset. For example, a margin loan of $70,000 on a $100,000 investment reduces the assets test value to $30,000. <o:p></o:p></span></p><p class=Default><span style='font-size:11.0pt'>A charge or debt cannot reduce an asset’s value where it is secured against an exempt asset, for example, the family home. So let’s say $300,000 is borrowed using the principal residence as security to purchase an investment property. The entire amount of the investment property is assessed under the assets test, with no reduction for the amount of debt. Where the lender permits, you may be able to use the investment property as security, rather than the principal residence. In this case, the $300,000 debt reduces the market value of the investment property and consequently Centrelink payments may increase. <o:p></o:p></span></p><p class=Default><span style='font-size:11.0pt'>Unsecured loans can only reduce an asset’s value if you can provide evidence that the loan was obtained specifically for the purchase of that asset. Unsecured loans obtained for general purposes or for purposes other than the purchase of the asset (eg. for an overseas holiday) do not reduce the value of a person’s assets.<o:p></o:p></span></p><p class=Default><span style='font-size:11.0pt'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:8.0pt;font-family:"Arial","sans-serif";color:black'>RI Advice Group Pty Limited ABN 23 001 774 125, AFSL 238429. This information does not consider your personal circumstances and is general advice only. You should not act on any information without obtaining professional financial advice specific to your circumstances.</span><o:p></o:p></p></div>Jorgohttp://www.blogger.com/profile/07076762361627206443noreply@blogger.com0tag:blogger.com,1999:blog-6863821344337556376.post-39931927668723487402011-10-11T18:36:00.001+11:002012-01-18T10:15:50.125+11:00Taking control of your estate during divorce<div class=WordSection1><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><b><span style='font-family:"Helvetica","sans-serif"'>Breaking up is hard to do</span></b><span style='font-family:"Helvetica","sans-serif"'>, as the song says – <b>emotionally, spiritually and <a name="_GoBack"></a>financially</b>. If you’re going through a divorce, the last thing you probably feel like thinking about is the possibility of something happening to you. <o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span style='font-family:"Helvetica","sans-serif"'>However, if you’re going through or even contemplating a divorce, finding out <b>what would have happened to your worldly possessions,</b> if you <b>had died or been disabled yesterday</b>, should be looked at as <b>a matter of priority</b>.<o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span style='font-family:"Helvetica","sans-serif"'>Although you may be separated from your spouse, in perhaps body and or soul, <b>in the eyes of the law you are still legally married until a judge signs the divorce papers</b>. <o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span style='font-family:"Helvetica","sans-serif"'>This means if something were to happen to you and you died or became incapacitated, <b>your estranged partner could still have control over your estate</b> – not a thrilling prospect for most people.<o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span style='font-family:"Helvetica","sans-serif"'>For example, if you <b>did not have a Will in place</b> and you died during a divorce, your <b>estranged spouse would automatically be entitled to control your estate</b>, and depending on whether or not you have kids, <b>would most likely be entitled to at least half, if not all, of your assets</b>.<o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span style='font-family:"Helvetica","sans-serif"'>So if you’re going through a divorce or separation, <b>it’s important to review and revise your Will as soon as possible</b>.<o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span style='font-family:"Helvetica","sans-serif"'>It’s not just your Will you need to worry about, at this time.<o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span style='font-family:"Helvetica","sans-serif"'>It’s also considerations such as how to <b>ensure debts are covered in the event of your death or incapacity</b> while leaving enough for the ones you care about, making sure your <b>have <u>nominated beneficiaries</u> for your insurance policies</b>, <b>superannuation</b> and <b>pensions</b>, the tax implications and how any assets would be reallocated if a beneficiary were to die before you.”<o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span style='font-family:"Helvetica","sans-serif"'>After all, you’ve worked hard to build wealth so you want to <b>make sure that your wishes would be handled in the way that you intended</b> when you’re gone. Or at least they are more likely to be respected.<o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span style='font-family:"Helvetica","sans-serif"'>Of course, it’s not just your divorce that could have a huge impact on your family succession planning, but also any other changes in marital status for you or your beneficiaries.<o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span style='font-family:"Helvetica","sans-serif"'>For example, one day you may <b>decide to remarry</b> – and it is to someone who has also been married previously.<o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span style='font-family:"Helvetica","sans-serif"'>Or perhaps <b>one of your children will separate</b>, or decide to marry someone at <b>risk of bankruptcy</b> or with <b>a gambling problem</b>.<o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span style='font-family:"Helvetica","sans-serif"'>If this happens you’ll want a plan in place to ensure your final wishes are met.<o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span style='font-family:"Helvetica","sans-serif"'>These days with more and more people getting divorced, remarrying and starting blended families, <b>estate planning is becoming increasingly complicated so financial advice is crucial</b>.<o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span style='font-family:"Helvetica","sans-serif"'>A professional adviser can work closely with your solicitor to help you cut through the legal jargon and find out what is most important to you. That way you can rest assured if anything happens to you, <b>your final wishes will still be met</b>.<o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span style='font-family:"Helvetica","sans-serif"'>Without a good plan, particularly with the added complexity a divorce can bring, there can be very sad consequences: from family squabbles and legal wrangling to unanticipated tax losses.<o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><b><span style='font-family:"Helvetica","sans-serif"'>For help to working through your estate planning issues following a divorce contact *Hugh RI Advice - RetireInvest on 03 9471 0080 today.<o:p></o:p></span></b></p><p class=MsoNormal><span lang=EN-US style='font-size:11.0pt'>*Hugh Kilpatrick is an Authorised Representative of RI Advice Group Pty Limited (ABN 23 001 774 125), Australian Financial Services Licence 238429. This editorial does not consider your personal circumstances and is general advice only. You should not act on any recommendation without considering your personal needs, circumstances and objectives. We recommend you obtain professional financial advice specific to your circumstances.</span><span lang=EN-US style='font-size:11.0pt;font-family:"Calibri","sans-serif"'><o:p></o:p></span></p></div>Jorgohttp://www.blogger.com/profile/07076762361627206443noreply@blogger.com0tag:blogger.com,1999:blog-6863821344337556376.post-6182352043251007772011-10-04T15:54:00.003+11:002011-10-04T15:58:18.200+11:00We are continuing to live longerAccording to recent statistics released from the Australian Bureau of Statistics, there is a continuing trend for Australian men and women to live longer.<br /><br />A baby boy born in 2007-2009 is expected to live, on average, 79.3 years. A baby girl born over the same period is expected to live, on average 83.9 years. Over the decade to 2009, this represents an increase for males of 2.7 years and for females 1.9 years. Females are still expected to live longer but males are catching up.<br /><br />A similar trend appears in the residual life expectancy at age 65. Females age 65 in 2007-2009 are expected to live another 21.8 years to age 86.8 (an increase of 1.4 years) and males another 18.7 years to age 83.7 (an increase of 1.9 years).<br /><br />Our increased life expectancies have been attributed to improvements in aged care management, medical advances resulting in a decline in the number of deaths from chronic health conditions (e.g. heart disease, cancer and strokes) and behavioural changes such as improvements in diet and lower rates of smoking.<br /><br />Although it is good news that we are expected to live longer, it does have financial planning implications. If we are living longer in retirement, our retirement funds need to last longer. This issue is magnified just because you are a member of a couple as both of you are expected to live longer.<br /><br />Whether you are saving for retirement, about to retire or already retired, a financial planner can assist you in meeting your retirement income needs. Professional financial advice could be the difference between supplementing your retirement income with the Age Pension and entirely relying on the Age Pension to meet all of your income needs.<br /><br /><strong>Mortgage stress</strong><br /><br />In Australia, the proportion of household disposable income dedicated to interest payments (known as the debt servicing ratio) is quite high at 12%. In comparison, the previous high was 9% just prior to the 1990’s recession.<br /><br />Given the high debt servicing ratio, the global financial crisis and the rising cost of living it is no surprise that an increasing number of Australian households are facing mortgage stress. <br />In the first half of this year, the big four banks reported an increase in the value of loans considered to be 90 days in arrears. Westpac reported an increase of 35% since September 2010.<br /><br />If you have outstanding debt you may be at risk of mortgage stress. It is important you can identify the signs of mortgage stress early and act as soon as possible.<br /><br />If you are worried or experiencing mortgage stress you should speak to your financial adviser. Your financial adviser can assist you in creating a budget or in some cases, help you access your superannuation savings to help alleviate mortgage stress.<br /><br />Legal Aid NSW has produced a Mortgage Stress Handbook which can be accessed from the Legal Aid NSW website, www.legalaid.nsw.gov.au and search for ‘Mortgage Stress Handbook’.<br /><br /><strong>Social Security pension payments increase</strong><br /><br />If you are receiving an income support payment from Centrelink or the Department of Veteran’s Affairs, your payment increases from Tuesday the 20th September. Pensions increase by up to $19.50 per fortnight for singles and $29.60 per fortnight for couples. <br />This pension increase reflects changes to the Pension and Beneficiary Living Cost Index of 2.7% for the 6 months to June 2011.<br /><br /><strong>What is the Pension and Beneficiary Living Cost Index (PBLCI)?</strong><br /><br />The Pension and Beneficiary Living Cost Index (PBLCI) measures the change in disposable income of households whose received mainly from government pensions and benefits. This differs from the Consumer Price Index (CPI) which measures price inflation for the household sector as a whole. Since the PBLCI began in the June quarter of 2007 it has risen 16.2% compared to 13.2% for CPI. For the June quarter 2011, the most significant price rises were for food (+1.4%), transportation (+1.7%) and household contents and services (+1.2%).<br /><br />Given the increased relative cost of living for pensioners combined with fluctuating sharemarkets, many pensioners are questioning the adequacy of their retirement plan. Some retirees have even returned to casual or part-time employment. If you are feeling the pinch of rising living costs, are worried about the longevity of your retirement savings or are currently retired but considering returning to casual or part-time employment, then you should be speaking to your financial adviser.<br /><br />RI Advice Group Pty Limited ABN 23 001 774 125, AFSL 238429. This information does not consider your personal circumstances and is general advice only. You should not act on any information without obtaining professional financial advice specific to your circumstances.Jorgohttp://www.blogger.com/profile/07076762361627206443noreply@blogger.com0tag:blogger.com,1999:blog-6863821344337556376.post-68078718196939591322011-09-08T17:07:00.002+10:002011-09-08T17:13:35.249+10:00Term deposits on the menu?Since the Global Financial Crisis, there has been <strong>a flood of money into term deposits</strong>, with many people, especially those in or close to retirement, concerned about the increased level of volatility in markets.<br /><br /><strong>“Investment Platforms” are ways to invest your money inside Superannuation or outside of superannuation</strong> – they give cost effective access to an extensive range of investments. An investment platform is an administration service that enables more efficient management of your investment portfolio.<br /><br />These days platforms are one of the most common ways to invest your money, giving you access to a range of investments <strong>including those normally only available on a wholesale basis</strong>, consolidated reporting, and a convenient, holistic view of your investments’ performance.<br /><br />But did you know there is now <strong>a new safe way to park your cash</strong> on your investment platform – giving you quick and convenient access to your money when you want to reinvest? <strong>A term deposit on platform!</strong><br /><br />While for most, cash certainly <strong>isn’t the answer to meeting long-term financial goals</strong>, given recent market volatility it’s understandable many retirees and people close to retirement are <strong>keen to invest a greater portion of their money into cash</strong>. <br /><br />For those people term deposits can make a lot of sense and give a degree of comfort. They are widely available, offer competitive returns and are easy to understand. You simply put your money in the bank and are paid interest at the end of the term.<br /><br />However rather than rushing off to your nearest bank, it may be worthwhile talking to your adviser about <strong>the possibility of a term deposit on your investment platform</strong>.<br /><br />Putting your cash on a platform alongside your other investments will give you good overall picture of your financial circumstances, and <strong>once you regain confidence in the market will allow you to switch to other asset classes quickly and easily</strong>.<br /><br />The other advantage is that they <strong>offer consolidated tax reporting, saving you a lot of time and effort</strong> when it comes to tax time.<br /><br />The problem with traditional term deposits is that your money is locked in for a predetermined period, making it difficult to adapt to changing conditions.<br /><br />Often when markets recover they do so quickly and without warning. So if you’re locked into a fixed term, you’re likely to miss out on any gains when markets bounce back.<br /><br /><strong>Term deposits on platforms are usually more flexible</strong>, giving you the opportunity to switch quickly and conveniently, sometimes even overnight.<br /><br />Although traditional term deposits and term deposits on platform offer comparable rates, investors should beware of banks offering honeymoon rates.<br /><br />Often banks will entice customers with an attractive interest rate, only to drop that rate after a short period. Then, when it comes time to rollover your cash into another term deposit, you find your return is no longer competitive – you may also have missed opportunities elsewhere.<br /><br /><strong>Overall the most important thing to remember is to take an approach that suits your needs as an individual</strong> – this will include, usually, short, medium and long term investing.<br /><br />While investing in a term deposit can be a worthwhile approach for retirees and pre-retirees who want to reduce anxiety and safeguard a portion of their portfolio in the short-term, focusing on cash investments over the long-term <strong>could mean you won’t end up with enough money to achieve your financial goals.</strong><br /><br /><strong>For advice on using cash options, including how to utilise term deposit solutions on a platform, or to review your portfolio in light of the changing investment climate contact Hugh Kilpatrick* of RI Advice today, on 03 9471 0080</strong>.<br /><br />*Hugh Kilpatrick is an Authorised Representative of RI Advice Group Pty Limited (ABN 23 001 774 125), Australian Financial Services Licence 238429. This article does not consider your personal circumstances and is general advice only. You should not act on any recommendation without considering your personal needs, circumstances and objectives.Jorgohttp://www.blogger.com/profile/07076762361627206443noreply@blogger.com0tag:blogger.com,1999:blog-6863821344337556376.post-541034632094648282011-08-17T16:20:00.003+10:002011-09-08T17:19:02.124+10:00Time to seek professional assistance is when...Any change in financial goals/priorities, such as:<br />Awareness of new investment structure/opportunity<br /><strong>Birth of a child</strong><br />Buying a car<br />Buying/selling investment assets<br />Career break or change planned<br />Change in Government assistance payments<br />Change in risk appetite<br />Decrease/increase in living expenses<br /><strong>Divorce</strong><br />Financial needs of family change (e.g. parent)<br /><strong>Home purchased or new home purchased</strong><br /><strong>Increase in Income</strong><br />Investment recommendation from a friend<br />Investments overweight in one asset class or type<br /><strong>Marriage</strong><br />Moving to part time work<br />Personal loan/credit card paid off<br />Receiving a bonus<br /><strong>Receiving an inheritance</strong><br />Renovating the house<br /><strong>Retirement</strong><br /><strong>Second or subsequent marriage (essential to seek guidance re asset ownership)</strong><br />Selling business assets<br /><strong>Starting a business</strong><br />Super beneficiaries change/dependency status changes<br />Temporarily incapacitated<br />Travelling overseas<br />Undertaking study<br />Unhappy with current super fundJorgohttp://www.blogger.com/profile/07076762361627206443noreply@blogger.com0tag:blogger.com,1999:blog-6863821344337556376.post-60722292734594869282011-08-08T14:47:00.002+10:002011-09-08T17:20:16.937+10:00Time for women to bridge the super gap!While the women's movement has delivered many successes over the last 50 years, <strong>the area of financial independence still lags behind</strong>. The retirement savings gap between men and women, in particular, is a key area that needs to be addressed.<br /><br />Many women are exposed to <strong>a substantial risk of poor retirement living standards</strong> due to the massive underfunding of their superannuation. Statistics from the Association of Superannuation Funds in Australia (ASFA) in 2009 highlights the depth of the problem and are a real wake up call.<br /><br />The average retirement payout for women going into retirement is only $73,000, whereas men are more than double this amount at an average of $155,000.<br /><br />What are <strong>some possible reasons</strong> for such a disparity? Women are still the <strong>primary care-givers</strong> in most families, which means their career and income are more likely to be <strong>interrupted. They may also be </strong>over-represented in casual and part time workforce, which may result in lower incomes and limited ability to contribute to super. Those who take multiple part-time jobs where they may be earning less than $450 per month in each job, are particularly worse off, because current rules say that they are not eligible for compulsory super contributions to be made by their employers.<br /><br /><strong>Divorce and the high proportion of single parent families</strong> that are headed by women have added to the problem and many women remain single and are solely responsible for their own retirement saving.<br /><br />It also pays people to <strong>exercise caution on a reliance on the age pension</strong> to substitute for proper retirement saving. The age pension is already under significant pressure from an ageing population and it won’t even go close to providing what most would consider a comfortable retirement income. For example, if you are currently earning a $60,000pa income, the rule of thumb is that you would need a retirement income of around $40,000pa. The age pension is not going to deliver that sort of money, so it is up to the individual to plan ahead.<br /><br />On the positive side, women are <strong>generally far better money managers</strong> and <strong>more able to set goals and stick to strategies</strong>. Often, they simply haven’t found out what they need to be doing, or putting away, to fund their retirement.<br /><br />To help target such retirement savings goals it is important to take advantage of whatever <strong>government incentives</strong> are available. This is where seeking some professional advice can help. There are incentives such as the spouse super contribution that allows the main breadwinner to make super contributions on behalf of a spouse who is not working or is not earning a high income. This can provide a rebate of up to $540.<br /><br />For women with a higher income earning spouse, there is the possibility of <strong>splitting super contributions</strong>. Not only would this boost the woman’s super balance, it may also provide the couple with Centrelink benefits or the opportunity to access their super earlier.<br /><br /><strong>Salary Sacrifice</strong> is a critically important strategy in a lot of cases.<br /><br />Opportunities such as these will depend on specific circumstances and this is where advice from a professional can be useful. At times of low or interrupted income, such advice can help map out future contribution strategies and even help with transition to retirement strategies that are also tax efficient.<br /><br />For further information on how you and/or your partner can better plan out your super strategies <strong>contact *Hugh Kilpatrick from RI Reservoir on 03 9471 0080</strong>.<br /><br />*Hugh Kilpatrick is an Authorised Representative of RI Advice Group Pty Limited ABN 23 001 774 125, AFSL 238429. This editorial does not consider your personal circumstances and is of a general nature only. You should not act on the information provided without first obtaining professional financial advice specific to your circumstances.Jorgohttp://www.blogger.com/profile/07076762361627206443noreply@blogger.com0tag:blogger.com,1999:blog-6863821344337556376.post-21664671266447608502011-08-08T14:17:00.002+10:002011-09-08T17:21:33.037+10:00Super – who gets it?Strict rules govern how your super is distributed when you die and if you don't get it right, your super savings could be given to someone other than your desired beneficiaries.<br /><br />Most people will be surprised to hear that your super doesn't always form part of your estate when you die, so it often won’t be distributed as part of your Will.<br /> <br />One of the most important decisions you make when you join a super fund revolves around the question of <strong>who to nominate as the beneficiaries of your super</strong> when you die.<br /><br />There are <strong>limitations</strong> on who you can nominate. Superannuation law stipulates that a superannuation fund can only pay a death benefit to your partner/spouse (including a de facto spouse, whether same sex or not), children, a person who was financially dependent on you or who you had an interdependency relationship with at the time of death or your legal personal representative (i.e. your estate).<br /><br />Defining an interdependency relationship can be complex. Problems are much more likely to occur when there are blended families - step children, ex-partners - therefore potentially multiple beneficiaries. If someone comes forward saying they are entitled to claim some (or all) of your super balance, the trustee will generally take their claim into account.” <br /><br />The trustees of your fund will have the ultimate discretion as to who will receive your super. They will take into consideration any nomination of beneficiaries that you have made, but are often not bound by your request.<br /><br />The fight over super death benefits is now such a major issue that such cases comprise a third of all complaints made to the Superannuation Complaints Tribunal, the body established to oversee disputes relating to regulated super funds.<br />To avoid confusion and family disputes and to ensure your super balance goes to who you choose a person should <strong>consider making a binding death benefit nomination.</strong><br /><br />This is a nomination that the trustees are generally <strong>obliged to follow</strong>. You are still limited as to who you can nominate, which must be a spouse, child, someone who you held an interdependency relationship with, or a financial dependant.<br /><br />If you want your superannuation to pass to someone else, such as a friend or charity, you would need to <strong>nominate your estate as the binding beneficiary</strong> of your superannuation entitlements. Your superannuation will then be paid into your estate and distributed according to the terms of your will - you would need to <strong>nominate such people or bodies as beneficiaries of your Will</strong>.<br /><br />It is important to review death benefit nominations regularly (generally they are only valid for 3 years) and to include full details of your beneficiaries. <br /><br />Keeping your super fund trustee informed of any changes to your beneficiaries - or changes to their personal details - will make the task of distributing your super much less complex for all involved.<br /><br />If your fund does not have binding nominations, insist that they put it into their fund. If they are unwilling or unable, it is in your best interests to seek an alternative fund. You may think that where your money goes should be your choice!<br /><br />A financial adviser can help you to review your death benefit nominations to increase the likelihood of your superannuation going to your intended beneficiaries and reduce the chance of hassles or disputes amongst the people you care about.<br /><br />For further information contact *Hugh Kilpatrick from RIadvice-RetireInvest on 03 9471 0080 today.<br /><br />*Hugh Kilpatrick is an Authorised Representative of RI Advice Group Pty Limited ABN 23 001 774 125, AFSL 238429. This information does not consider your personal circumstances and is of a general nature only. You should not act on the information provided without first obtaining professional financial advice specific to your circumstances.Jorgohttp://www.blogger.com/profile/07076762361627206443noreply@blogger.com0tag:blogger.com,1999:blog-6863821344337556376.post-12349444662508303402011-06-06T16:38:00.001+10:002011-06-06T16:42:16.792+10:00Superannuation contributions not always welcomeSuperannuation is undoubtedly <strong>a tax effective way to save for retirement</strong>; therefore it makes sense to consider making extra contributions to super at any time - especially in the years leading up to retirement.<br /><br />However, if you aren’t aware of the rules, those extra contributions could come back to bite you.<br /><br />The Government wants to encourage people to save for retirement, but at the same time they don’t want people treating superannuation as a tax haven. That’s why they’ve placed <strong>caps on both ‘concessional’ (before tax) contributions and ‘non-concessional’ (after tax)</strong> contributions.<br /><br />The concessional contribution cap is currently $25,000 per year, although a transitional arrangement allows people aged over 50 to contribute up to $50,000 per year until 30 June 2012. <br /><br />The non-concessional contribution cap currently sits at $150,000 per year. However, in any year it’s possible to ‘bring forward’ your next two years’ contributions enabling a total contribution of up to $450,000. Past contributions need to be monitored carefully if using the ‘bring forward’ rule, as <strong>it’s critical not to contribute more than $450,000 in any 3 year period.</strong><br /><br />People saving for retirement can’t afford to be blasé about these caps, as breaching them can result in <strong>substantial tax penalties</strong>. <br /><br />Excess concessional contributions are taxed at 31.5%, with the amount of your excess contribution also counting towards the non-concessional limit, and excess non-concessional contributions are taxed at 46.5%.<br /><br />Members of self managed super funds (SMSFs) need to be especially vigilant about these caps. According to the Australian Taxation Office (ATO), <strong>more than 65,000 tax payers breached the SMSF contribution caps in 2009-10</strong>.<br /><br />The ATO is obliged to impose the additional tax penalties even if the excess contribution is a genuine mistake, although a 2011 Federal Budget proposal may help to alleviate this problem.<br /><br />From the 2011-12 financial year, the Government plans to give members the option to withdraw up to $10,000 of excess concessional contributions without penalty. However, this dispensation will only apply for a first-time breach.<br /><br /><strong>The potentially serious consequences of breaching the contribution caps highlight the importance of good financial advice.</strong> <br /><br />If you are looking to maximise your retirement savings, you need to be aware of changing legislation and can’t simply focus on the current year’s contributions. As well as helping to stay within the prescribed limits, a financial adviser can help you select and implement the most appropriate strategies for your situation.<br /><br /><strong>For further information contact Hugh Kilpatrick* from RI on 03 9471 0080</strong>.<br /><br />*Hugh Kilpatrick is an Authorised Representative of RI Advice Group Pty Limited ABN 23 001 774 125, AFSL 238429. This editorial does not consider your personal circumstances and is of a general nature only. You should not act on the information provided without first obtaining professional financial advice specific to your circumstances.Jorgohttp://www.blogger.com/profile/07076762361627206443noreply@blogger.com0tag:blogger.com,1999:blog-6863821344337556376.post-31453109800879004332011-05-18T13:40:00.007+10:002011-05-18T14:30:20.605+10:00Are you a winner from the 2011 Australian Budget?The Gillard Government's first budget walked the fine line between keeping onside with a fickle electorate, while making progress toward future surplus targets. In the areas of tax, superannuation and social security, the result was a series of relatively low risk 'tweaks' to existing programs, rather than any serious slashing reforms. <br /><br />It seems not to have upset too many vested interests and on the plus side, there were <strong>some limited wins for small business, retirees and income earners</strong>. In looking at these changes it is important to remember that most measures are <strong>proposals only and further changes could be made</strong>. Legislation is still required to be passed. <br /><br />Although the lack of dramatic announcements may have discouraged people from digging through the detail, there are rewards to be had if you know where to look. <br /><br /><strong>Concessional super contribution gains</strong><br />A case in point is a small but potentially important change that may appeal to those who are taking full advantage of concessional contribution limits to load their super. Previously, contributions made in excess of the cap were penalised with a potentially higher rate of excess contributions tax. From 1 July 2011, any 'first time offenders' who overstep the concessional contributions cap by up to $10,000 can request the excess contributions be refunded and assessed at their marginal rate of tax, rather than at the higher 'excess contribution' tax rate.<br /><br />Over 50s with less than $500,000 in super assets now have more certainty on potential future indexation increases to the cap. The transitional cap for this group is currently at $50,000. The good news is that any indexation increases in the $25,000 base cap from 1 July 2012 will have a matching increase in the higher cap, thereby allowing for greater overall increase in cap level.<br /><br /><strong>Account based pension relief</strong><br />Retirees also stand to benefit if they have account-based pension investments. Over the last 3 years these types of investments have benefited from a 50% reduction in minimum amount of income that the account holder was obligated to draw down. This allowed them to preserve more capital to help them recover from the effects of the GFC. There was some fear that this relief would disappear in this budget, but fortunately it has been retained for another year, albeit at a lower level of 25%. For someone aged between 65-74, for example, this means they need only drawdown 3.75% of their investment, rather than the standard 5%.<br /><br /><strong>The superannuation co-contribution</strong> thresholds would remain frozen until 30 June 2013. The co-contribution scheme gives dollar for dollar contribution support for those earning up to $31,920 who are contributing after tax dollars to their super. The Government will chip in up to $1,000 for these people. Those earning higher incomes can also receive a lower level of co-contribution support - phasing out to zero at an income of $61,920. <br /><br />Tax changes worth noting<br />On the tax front, a range of relatively small but important adjustments have been made to both personal and business tax regimes. <br /><br /><strong>Taxpayers with a dependent spouse aged less than 40 years</strong> will lose the dependent spouse tax offset from 1 July 2011, unless they are a carer, an invalid, or are permanently unable to work. Those with children and who are eligible for Family Tax Benefit B, (or eligible for the zone, overseas forces or overseas civilian tax offsets), will also not be affected by this change.<br /><br />Families would receive some tax relief if they have <strong>16-19 year olds that are in full-time secondary study</strong>, or the vocational equivalent. From 1 January 2012 they will receive up to $160 extra per fortnight through Family Tax Benefit (FTB) Part A for each eligible teenager. There will also be <strong>more flexibility around obtaining advance payment of up to $1,000 of FTB Part A</strong> entitlements.<br /><br /><strong>Reforms to the Low Income Tax Offset (LITO)</strong> include an increase in the amount of the offset that can be taken in weekly pay packet, rather than waiting for the end of year tax return. Abuse of the system by those attempting to avoid income tax has been stopped by closing the loophole that allowed diversion of dividends, interest and rent income to a non-working minor, who could previously have had access to the LITO provisions for non-work related income.<br /><br /><strong>Small business wins a tax break!</strong><br />Small business owners achieved some notable budget bonuses, starting with an immediate tax deduction of up to $5,000 for motor vehicles bought from 2012/13 onwards. An increase in the immediate tax deductible amount will also apply to assets valued at under $5,000, up from a previous level of $1,000. Incorporated small businesses will benefit further with a reduction in company tax rate to 29 per cent.<br /><br />If you want to know more about how the 2011 Budget may affect you and your family, or to set up your financial affairs for a more profitable financial year, <strong>contact RI Advice Group on 03 9471 0080 before 30 June 2011</strong> – we are ready to help.<br /><br />Hugh Kilpatrick is an Authorised Representative of RI Advice Group Pty Limited ABN 23 001 774 125, AFSL 238429. This article does not consider your personal circumstances and is general advice only. You should not act on any recommendation without considering your personal needs, circumstances and objectives. We recommend you obtain professional financial advice specific to your circumstances. This information is correct as at 13 May 2011.Jorgohttp://www.blogger.com/profile/07076762361627206443noreply@blogger.com0