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The Gen YQ Story -

In November 2009, Bernard Fehon, Managing Director from Tactical Solutions in Penrith, faced the task of retaining his then generation Y employee, Anthony Kurver, to the attraction and social scene of working in the city of Sydney.

This experience was the trigger for Bernard to come up with the idea of having a Generation Y group established in Penrith to give local young business people the chance to network with each other, to assist in furthering their own careers locally and better enabling employers in Penrith to keep their talented staff. (Read more)

CEO Sleepout - The Story

The Vinnies CEO Sleepout began as a local community venture in Sydney’s Parramatta in 2006, the brainchild of, Bernard Fehon, Managing Director of Tactical Solutions. At that time, Bernard had been working on the organising committee of a gala dinner to raise funds for Vinnies locally in the Parramatta region. It was whilst serving on this committee, that Bernard conceived an idea inspired by his children having attended school sleepouts for Vinnies.

The sleepout would engage business leaders to raise awareness and funds for Vinnies to support people experiencing homelessness as part of a larger Escape from Poverty campaign. The campaign also included the annual gala dinner and door knock appeal.

With the help of Vinnies, business associates, volunteers and his family, Bernard held the inaugural event on 21 June 2006 at what was then known as Telstra Stadium, now ANZ Stadium in Sydney Olympic Park. (Read More)

 

Q & A's to Bernie

Access to super

Bernie, I am 59 and want to access some of my super to finish the home we are building. How can I get it? Mary, Castelreagh.

Well Mary, Superannuation is a structure set up by the government to encourage people to provide for themselves in retirement.
The Superannuation system lets you save money for retirement and earnings are taxed at 15%. Being 59 means you can access your money if you are retired. If you are still working, you can only access your unpreserved money (if you have any) or access your money as an income stream, with a maximum of 10% of the balance being paid to you each year.

Now, be careful to consider how much tax is payable as you are 59! When you turn 60 you will pay no tax on any money that comes out of super, but until then, any lump sum withdrawn may be subject to tax. It sounds silly but generally, the first $160,000 of the taxable component is tax free.

Under age 60, the income you draw will be taxable and will come with a tax offset (formerly called a rebate) of 15%.

So , as always with super it is a little complicated. In summary, if you are retired you can probably get all of your super and if not you can get 10%. The other thing to consider is that the particular super fund you are in might have product rules that are different to the legislation……so meet with a financial planner to get tailored advice before you make any decisions and make sure you are considering your longer term needs as well.

Bye for now,

Bernie


Question.

 

Bernie,  I have a question about super. My husband and I run our own businesses (one each in fact).  Do we really need to have Super ?   Is it compulsory?   Brian and I don't really see the benefit of having it at all.   What if we put a certain amount of money away monthly in the bank and call it super?   At the end when we retire, we can have that money back plus interest. Wouldn't that be better?    Tracey – Fairfield.

 

 

Well Tracey,  you are not the first small business owner to ask me that!

 

Paying superannuation is compulsory for your employees.  If you and your husband operate your businesses as sole traders or in partnership (with each other or other people) then you are not employees and do not have to pay super for yourselves.  If you are employees of a Pty Ltd company then it is compulsory to pay for you as well as other employees.

 

Superannuation is simply a trust structure that is taxed quite favourably.  The best way of describing it is to consider a self managed super fund (SMSF) that you could set up for you and Brian.  You could make contributions to the SMSF and if you claim a tax deduction for it, these contributions will be taxed at 15%.  This is better than 30% or higher if your businesses are actually making some good money.  Once in the fund the earnings will only be taxed at a maximum of 15% and you can put the money in a bank account and earn the same rate as you would if it was outside of super (and the interest is getting taxed at a lower rate).  The only catch  is that you cannot spend the money until you are over 60 (assuming you were born after 1964).  You could also invest in shares or property or other investments being careful not to break the rules.

 

 

So it all depends how well your businesses are going.

 

If you are not making much money then you will not be paying much tax and there will be not much point in putting money into super where you can’t touch it till you are much older.  If on the other hand your businesses are making plenty of money and you think you are paying too much tax then it makes a lot of sense to put money into super (saving tax), get taxed lower on the earnings and then get it back tax free later.

 

You see, the government rewards you with lower tax if you promise to save it till later.  I hope your business is going well and if it is then super makes sense.  You mentioned putting it in the bank and it is interesting to see that a lot of super funds now offer term deposits inside super.

 

So either shop around to find one of those, consider a self managed super fund or find a professional advisor that you can trust.

 

Thanks for a great question,

Bernie

 

 

Bernard Fehon is a Certified Financial Planner and Managing Director of Tactical Solutions

Bernard Fehon and Tactical Solutions are Authorised Representatives of AMP Financial Planning AFSL 232706

 


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When you’re together it may be easy to grow your super together. But what happens to your super savings when you’re facing a divorce?
When you’re part of a couple, there are plenty of ways to juggle your joint finances and grow your super.

If one of you is working less, the partner with the higher income could reduce their tax by making spouse contributions.

Low income earners may also be able to take advantage of government co-contributions. If you are eligible and make $1,000 of after-tax contributions into super, the government will top up your payments by up to $500, depending on how much you earn.

One or both of you could also make salary sacrifice arrangements, although the spouse earning a higher income may be the one in a stronger financial position to do so. Either way, if you allocate more of your pre-tax salary to go straight into your super, you will pay only 15%1 tax on the salary sacrificed amount, up to a $25,000 concessional contributions limit2.

When times get tough

However, if your relationship founders, you’ll need to separate your financial arrangements. Super is where many of us hold the bulk of our assets – apart from the family home – so it’s an increasingly important part of divorce negotiations.

If the divorce is amicable – you can make a super agreement to divide the super. The ‘non-member spouse’ can:

either receive a new super interest in the same fund; or
transfer their share of the super benefit to another super fund.
And they don’t necessarily need to wait to access the money. In some cases, the non-member spouse may be able to withdraw the super benefit immediately if they meet a superannuation condition of release.

But if the lawyers become involved, the Family Law Act allows for super to be split using a court order. If one person has been working full time while their partner has been at home, it doesn’t mean they will be entitled to their super in full. The court will take into account the couple’s respective roles in the relationship, how much money they have overall, and each person’s future earning potential, when deciding how the super benefit should be split.

Watch out for the tax consequences…

Splitting super can affect your tax situation, as lump sum payments and pensions are calculated and taxed separately for members and non-member spouses. So it may be more attractive to look at swapping other assets for super.

…and don’t forget your will!

You will need to update your will and your beneficiaries, particularly if you have children, to make sure the right people inherit your assets.

Get back on track for retirement

A divorce can end up leaving you with a reduced retirement nest egg. If you’ve paid some of your super to your former spouse, you could get your long-term investment strategy back on track by:

-working out your budget
-bringing your super accounts together to reduce fees
-taking advantage of super’s tax concessions for
-pre-tax contributions
-after-tax contributions.
-And if you’ve received super as part of a divorce settlement, you should think about the most suitable insurance cover and investment mix for you -in light of your changed circumstances.

The value of advice

If you’re going through a divorce, you should consider getting tax advice from an accountant and financial advice from an experienced financial planner.

Example: Ryan’s story – make up lost ground

Ryan and Diana have finalised their divorce amicably, including joint custody of their two children.

Diana has agreed to accept 30% of Ryan’s $200,000 super savings (or $60,000) in return for more cash from their term deposits.

This leaves Ryan with $140,000 in super. He’s got 17 years to get his super back on track for his planned retirement at age 60.

As part of the divorce settlement, Ryan borrowed money to pay Diana her share of the family home. With increased personal liabilities, he should consider whether he needs to increase his insurance cover in his super fund. As Ryan wants his children to receive his superannuation benefit if he dies, he should review the beneficiaries he has nominated on his super account to make sure that his children are named.

Ryan needs to work out his budget and calculate his discretionary income before developing a long-term investment strategy. And he should consider whether it is appropriate for him to top up his super, whether from his pre-tax salary or other funds.

Ryan consults a financial planner who helps him work out how much he may need to retire. Together, they map out an investment strategy that could take him through to retirement and beyond.

 

1The government is proposing to double the 15% tax rate on before-tax personal contributions to 30% from 1 July 2012 for individuals earning more than $300,000 pa. As at February 2013, this proposal has not yet been legislated.

2The government is proposing to double the 15% tax rate on before-tax personal contributions to 30% from 1 July 2012 for individuals earning more than $300,000 pa. As at February 2013, this proposal has not yet been legislated.
“The Family Law Act allows for super to be split using a court order.”

 What you need to know
Any advice in this document is general in nature and is provided by AMP Life Limited ABN 84 079 300 379 (AMP Life). The advice does not take into account your personal objectives, financial situation or needs. Therefore, before acting on the advice, you should consider the appropriateness of the advice having regard to those matters and consider the Product Disclosure Statement before making a decision about the product. AMP Life is part of the AMP group and can be contacted on 131 267. If you decide to purchase or vary a financial product, AMP Life and/or other companies within the AMP group will receive fees and other benefits, which will be a dollar amount or a percentage of either the premium you pay or the value of your investments. You can ask us for more details.

My husband and I are currently renting.  We have two incomes and one 2 year old child.  We don’t want to rent forever and am wondering if now is the right time to buy?  Leonie, Westmead.

Well Leonie, I reckon the best time to buy is now nearly all the time.  If you can afford to.

The reason I say this is that property prices have clearly increased significantly over time and over the long term I expect they will continue to do so.  The big issue though is ...can you afford to?

Often, when buying your first home it is a stretch.  The repayments are likely to be higher than rent, unless you have a large deposit.  Despite this, I generally recommend that people buy a home to live in and this reduces the chance of having to move when the landlord decides.  The key is to save a deposit.  If you are renting and also saving a deposit you are proving to yourself that you can cover the mortgage of that same level.  That is, your weekly rent plus your weekly savings.

As a financial planner, I encourage you to think about the other related issues.   Are you planning to have any more children, do either of you have any health issues,  Have you got insurance in place for death and disability, including income protection insurance?  Do a detailed budget and start saving that deposit.  Do another budget that is for after you have purchased a property that shows you can afford the repayments.  Also, have a look at one where interest rates are say 2% higher than current and see if you can handle that.  This will give you “peace of mind” that you can handle interest rate rises.

You might benefit from the government scheme linked to First Home Savings Accounts as there are incentives for you to save using them.

In some situations, it might make sense to keep renting for a while and get into the property market with an investment property.

So there are plenty of issues to consider and as always, I recommend that you get individual advice after discussing all of your details with a professional planner. I recommend that you choose one who is accredited to advise on insurance as well as investments.

Bernard Fehon, Tactical Solutions,  4731 2299

Tuesday, 25 September 2012 17:36

A time to talk

Written by Bernard Fehon

Have you shared your retirement plans with your loved ones? Leaving full-time work can mean many changes for you and them, so make the time now.
For many people, change doesn’t get any bigger than what they experience at retirement when they leave full-time work. It’s an important life stage, and may impact not just you, but those around you as well.

While some may look at it as an adventure and a new beginning, others may find themselves unprepared and unaware of what to expect when they retire from the routine of a work-driven life. It may even be very different to how they imagined it to be.

That’s why it’s important to talk to your family (especially your partner and children) about what you plan to do and how you plan to achieve any goals you have set for yourself. Talking to your partner is key to having their support and input. Involving your children can make them feel confident about your plans.

So what’s the best time? The average age of people at retirement, last year, was 53.3 years with 57.9 years for men and 49.6 years for women1. If you stagger your conversation through at least a 7-10 year period, that’s plenty of time to work out a plan and engage your partner and children in it.

Your conversation need not be all about money either.

Picture tomorrow with your partner

Talking with your spouse or partner when planning for life after retirement can help prevent your relationship from coming under strain. This means working together to:

-consider your post-retirement aspirations
-plan a new lifestyle that works for both of you
-understand and anticipate the impact of the impending changes.
-Couples may assume their dreams and goals are aligned, but when they start talking about their plans, may discover substantial differences.

To avoid unnecessary surprises, decide on your retirement goals with your partner during your working years and discuss them regularly as you near retirement age. Your ideas and financial situation may change, but you’ll have a solid long-term overview of what you both want and where you’re headed.

Involve your children

Many young and middle-aged adults worry about their parents’ retirement; especially about whether their parents will have enough money to lead a secure and comfortable life. By involving your children in your planning discussions, you can avoid the strain on them of not knowing if you have planned to take care of yourself.

Also consider how your children and other dependants in your life may be affected after you retire from a full-time role. As you get older, you may want to tell them about your wishes. For example, with more time to spend with your children and grandchildren who may live elsewhere, you may want to reduce your travelling and decide to relocate – this will have a direct impact on all of you.

Decide about work

There are many incentives for people to remain in the workforce beyond retirement age – mainly to supplement any retirement income. You can also speak with your financial planner about what strategies are best suited to increase your income, investments that can provide you with a consistent return and how to make the most of government benefits. This will be important if, for example, you would like to start volunteering, instead of doing paid part-time work.

If you are interested in paid work, you can also discuss your options with your family. After all, they care about your welfare and want to see you be comfortable and independent.

Top topics

Here’s a guide to what topics you may want to raise with your family:

1.your aspirations and how they match with those of your partner
2.how you plan to spend your time in retirement
3.any employment or volunteering plans
4.where you’ll live and if you’ll relocate at some time
5.the potential for medical support as you become older
6.the future needs of your dependants
7.your overall financial situation.
By discussing issues and goals early, you won’t be forced to rush or compromise at a time when it may be too late to adjust your plans or your income.

The key to success is thoughtful, long-term planning – speak with Tactical Solutions today about how you can plan for a rewarding tomorrow.

 

1 Australian Bureau of Statistics. (13 December 2011). Retirement and retirement intentions, Australia, July 2010 to June 2011. Retrieved from abs.gov.au.

..What you need to know
Any advice in this document is general in nature and is provided by AMP Life Limited ABN 84 079 300 379 (AMP Life). The advice does not take into account your personal objectives, financial situation or needs. Therefore, before acting on this advice, you should consider the appropriateness of this advice having regard to those matters and consider the Product Disclosure Statement before making a decision about the product. AMP Life is part of the AMP group and can be contacted on 131 267. If you decide to purchase or vary a financial product, AMP Life and/or other companies within the AMP group will receive fees and other benefits, which will be a dollar amount or a percentage of either the premium you pay or the value of your investments. You can ask us for more details.


 

Tuesday, 25 September 2012 17:19

Want to manage your own super?.

Written by Jacqui

Want to manage your own super?

Considering the ins-and-outs of self-managed super can help determine whether you should manage your own super or not.
An increasing number of Australians are looking for greater control over their super. There are more than 450,000 Self-Managed Superannuation Funds (SMSFs) with assets totalling over $400 billion – making up one-third of the 1.34 trillion-strong superannuation industry in Australia.1

But is a SMSF for you?

Pluses and minuses

It is all about control and flexibility – with a SMSF you are in charge of your super.

Among the benefits is access to a wide variety of investment strategies and assets, including direct residential and commercial investment property. And as you control what to invest in – and when to buy or sell-out of these investments – you gain more control over your fund’s tax position. You can also have more estate planning control through your SMSF that may not be offered through some public offer super funds.

However, with greater control comes greater responsibility. While you may want more flexibility and control over your super, it takes time, sufficient assets, investment and legislative expertise or advice, and ongoing involvement to manage a SMSF successfully.

A few thoughts…

The costs
Costs can vary depending on any additional investment, accounting, tax, auditing and legal advice or support you use to manage your SMSF funds. Generally, you will need to have a fund with around $200,000 to make it worthwhile, and a median-sized fund would cost around $2,000 each year.2

SMSFs with balances over $200,000 can be more cost-effective, especially when expenses can be averaged across up to four members.

Insurance usually costs more in an SMSF. Public offer funds can buy group policies and provide cheaper rates, but individuals typically pay more for illness, injury and death cover in their own fund.

Being a trustee
By establishing a SMSF, you become the trustee of the fund, and this makes you legally responsible for:

running the fund
making all decisions in the fund
ensuring the fund’s reporting, auditing and administration obligations are met.
It is important to remember that even though you may outsource some of the above tasks to professional advisers, you hold ultimate legal responsibility and accountability for your fund.

Investment management
A common reason for starting a SMSF is to have access to a wider choice of investments, particularly direct property. A SMSF allows you to invest in direct residential or commercial property and borrow the funds to do so. It also allows you to invest in collectables. However, the assets and money in your fund must be used solely to benefit your retirement and extra rules apply to collectables.

To manage your super assets, you should be confident in your level of investment skill and knowledge or obtain advice. You will need to document the fund’s investment strategy and should consider:

the amount of time you will need to spend managing your own super
how long your fund will be in the accumulation phase vs the retirement phase
the level of risk you and any other fund members are comfortable with
the objectives of your fund.
The investment strategy needs to take into account the age, personal circumstances and risk tolerance of each fund member. The strategy also needs to suit everyone in the fund, including members at different life stages.

The trustees should document every investment decision appropriately and maintain clear records of any subsequent investment changes.

The right advice
Although you may want to ‘do it all yourself’, if you lack the time or skills to manage the many SMSF trustee-related responsibilities, you risk making costly decisions that could seriously hamper your retirement plans. That’s why many SMSFs engage professional advisers such as financial planners, tax agents and accountants to not only help manage their responsibilities effectively, but also maximise any investment and taxation opportunities.

Bernard Fehon is a SMSF advice specialist, who will consider your personal situation and needs to help you decide if a SMSF is, firstly, right for you. If it is, he can help to establish your fund and structure a suitable investment strategy and investment products for your fund.

Time to decide

Before establishing your own super fund, it is vital to understand what is involved and whether you are suited to running a SMSF. So, take some time to think about these points before making a final decision. 

Please speak with  your financial planner or accountant to see if a SMSF is right for you. Alternatively, you can call us at Tactical Solutions to discuss your options.

 

1 Australian Taxation Office. (April 2012). Self-managed superannuation funds: A statistical overview. Retrieved from ato.gov.au.
2 Australian Taxation Office. (November 2011). Thinking about self-managed super. Retrieved from ato.gov.au.

“Before establishing your own super fund, it is vital to understand what is involved and whether you are suited to running a SMSF.”  

Any advice in this document is general in nature and is provided by AMP Life Limited ABN 84 079 300 379 (AMP Life). The advice does not take into account your personal objectives, financial situation or needs. Therefore, before acting on this advice, you should consider the appropriateness of this advice having regard to those matters and consider the Product Disclosure Statement before making a decision about the product. AMP Life is part of the AMP group and can be contacted on 131 267. If you decide to purchase or vary a financial product, AMP Life and/or other companies within the AMP group will receive fees and other benefits, which will be a dollar amount or a percentage of either the premium you pay or the value of your investments. You can ask us for more details.


 

Friday, 21 September 2012 12:04

Take ‘super’ care of yourself

Written by Jacqui

Take ‘super’ care of yourself

While you’re looking after the kids, who’s looking after you? Find out how to minimise a super shortfall and, better yet, boost your super.
________________________________________

Taking time out of the paid workforce to start a family can make it difficult to accumulate enough super for a comfortable retirement.

According to the Association of Superannuation Funds of Australia a three-year break from the paid labour force, say five years into a career, can lead to an eventual retirement payout of about $27,000 less than it otherwise may have been. 

This partly explains why women are well behind men in super accumulation: The latest figures show that the average retirement lump sum accumulated by a man is $198,000, while the average woman accumulates only $112,600.

But there are ways to avoid this shortfall, while you take time off to raise your kids – even with reduced or no pay.

Paid parental leave
Did you know that many employers provide at least six weeks of maternity leave on full pay, on top of the federal government’s 18 weeks of Paid Parental Leave? Some employers even allow you to extend your parental leave by accepting half pay over a longer period.

If your employer pays parental leave, your 9% super guarantee contribution may continue to be paid into your fund, while you receive parental leave payments – please check with your employer before going on leave.

If you’re planning to take time off, it’s worth checking what will happen with any death and disability insurance cover you currently hold – both inside and outside super.

Super splitting
Another way to boost super balances is for the working partner to split up to 85% of his or her concessional super contributions for that year into the non-working spouse’s super account. You simply need to complete the spouse contribution splitting form and provide it to the trustee of your super fund after the end of the financial year.

Spouse contribution offset
If your spouse has an income of less than $13,800 for a given financial year, you can receive a tax offset of up to $540 by making up to $3,000 in after tax contributions to your spouse’s super account.

Government co-contribution boost               
The government is also happy to help – if you earn less than $61,920 in a financial year, you may be eligible for the government co-contribution. What’s more, if you earn $31,920 or less, the government will match your contributions dollar for dollar up to a maximum of $1,000. So, $1,000 in after tax contributions can effectively boost your super by $2,000.

This co-contribution reduces by 3.3 cents for each dollar you earn over $31,920, phasing out at $61,920. This can be done each year you are out of the workforce, provided you meet the income eligibility requirements.

Go to the Australian Taxation Office (ATO) website at ato.gov.au for more information about how to ensure your personal super contribution counts. In most cases, the ATO will pay your co-contribution amount directly to your super fund.

Don’t forget, if you’ve taken parental leave (and because of time away from work have earned less than the minimum) you may be eligible for government co-contributions.

Added extras
A great way to catch up on your super once you return to work is to sacrifice a set amount from your salary into your super, in addition to any super guarantee contributions made by your employer. This may save you some income tax, because salary sacrifice contributions are taxed at up to 15%, which may be lower than your marginal tax rate, had you taken it as salary and then contributed into super after tax.

Be smart about your investments. Make sure your money is working as hard as it possibly can, based on your attitude to risk and choice of investment time frame. If you’re not sure of the best option for you, call us today.

ABS Survey of Income and Housing, compiled for the Association of Superannuation Funds of Australia (ASFA), 2009-10.
  Ibid.


What you need to know
Any advice contained in this article is of a general nature only and does not take into account the objectives, financial situation or needs of any particular person. Therefore, before making any decision, you should consider the appropriateness of the advice with regard to those matters. If you decide to purchase or vary a financial product, your financial planner, our practice, AMP Financial Planning Pty Ltd and other companies within the AMP Group will receive fees and other benefits, which will be a dollar amount and/or a percentage of either the premium you pay or the value of your investments. You can ask us for more details.


Thursday, 23 February 2012 11:43

Is retirement on your radar?

Written by Jacqui

Is retirement on your radar?

Ease into retirement by moving from working full time to part time and save on tax.

A Transition to Retirement (TtR) pension allows people between age 55 and 64 to access part of their super through a pension while still working. This strategy can be used while working full time or part time and, when combined with salary sacrifice, it can boost your super while providing significant tax advantages.

With a TtR pension you can supplement your part-time income, making it possible to maintain your current lifestyle while working fewer hours. You can withdraw up to 10 per cent of your account balance each year. Plus, as you are still working, you can keep contributing to your super – through your 9 per cent employer super guarantee and/or salary sacrifice.

Income that you receive from a TtR pension is favourably taxed compared to your earned income. If you’re aged 60 and over, the pension income is tax-free and if you’re between 55 and 59, it is taxed at your marginal tax rate and receives a 15 per cent tax offset. This means the maximum tax rate you may be charged is 30 per cent (excluding the Medicare levy).

A TtR pension and salary sacrifice strategy will generally be most effective if you are in a high marginal tax bracket and are salary sacrificing more than you are drawing down from a pension.

If you are salary sacrificing in combination with a TtR pension, it’s important to contribute within the allowed limits to avoid paying excess tax. Until 30 June 2012, the concessional super contribution caps (which include salary sacrifice and super guarantee) for anyone aged 50 or over are $50,000pa. However, it has been proposed, after this date, the amount is reduced to $25,000pa. Any excess over the cap will effectively be taxed at the top marginal tax rate.

An added benefit is that if you decide that part-time work is not for you and choose to go back to work full time, there is flexibility to stop this type of pension and revert to simply accumulating your super.

Case study

David, age 60, cannot afford to retire but would like to reduce his workload – from 40 hours a week down to 27 hours a week – for a combination of family and health reasons. His annual salary will reduce from $60,000 to $40,000. David has $200,000 (all taxable component) accumulated in his super account.

As David would like to maintain his present level of net income (i.e. $60,000pa), he could use a TtR pension to meet his income shortfall.

Let’s compare the impact that David’s partial retirement will have on his income position.


 

 

Before                          After

Annual salary                                       $60,000                         $40,000

Gross assessable
income
                                                 $60,000                         $40,000

Income tax1                                                                                    ($12,150)                       ($5,050)

TtR allocated pension income              -                                   $12,900

Take home pay                                     $47,850                         $47,850

Net hourly rate of pay                           $23                               $34

1 Includes the Medicare levy, but excludes the flood levy which only applies for the 2011-12 financial year.

As you can see, the tax-effectiveness of a TtR strategy has enabled David to maintain his net income, by meeting his income shortfall of $20,000 with only $12,900 from his super, after reducing his hours of employment.

Retirement income strategies can be complex. For instance, if you use part of your super to access a TtR pension, this may impact your future lifestyle. So speak to us about what you can do to increase future retirement income, as well as to find out more about how you could ease into retirement with a TtR pension.

 

What you need to know

This article contains general information only. It does not take into account your objectives, financial situation or needs. Please consider the appropriateness of the information in light of your personal circumstances. If you decide to purchase or vary a financial product, your financial planner, our practice, AMP Financial Planning and other companies within the AMP Group will receive fees and other benefits, which will be a percentage of the premium you pay and/or the advice fee you agree with us. Some of the information in this article is based on our interpretation of the law. It is a summary of the subject matter covered and is not intended to be comprehensive tax or financial advice. No reader should act on the basis of this article without obtaining specific professional advice. Further details are available from us, or AMP Financial Planning Pty Limited on telephone 1300 157 173.

Bernie's Blog -Question.


Question.

Bernie,  I have a question about super. My husband and I run our own businesses (one each in fact).  Do we really need to have Super ?   Is it compulsory?   Brian and I don't really see the benefit of having it at all.   What if we put a certain amount of money away monthly in the bank and call it super?   At the end when we retire, we can have that money back plus interest. Wouldn't that be better?    Tracey – Fairfield.

Well Tracey,  you are not the first small business owner to ask me that!

Paying superannuation is compulsory for your employees.  If you and your husband operate your businesses as sole traders or in partnership (with each other or other people) then you are not employees and do not have to pay super for yourselves.  If you are employees of a Pty Ltd company then it is compulsory to pay for you as well as other employees.

Wednesday, 07 December 2011 14:55

New Year New Job

Written by Bernard Fehon

If you have been with your employer for at least five years and are thinking about leaving your job this financial year - even if you are being made redundant, you can take advantage of temporary rules that can save you tax and get maximum benefit from your super contributions.

Money Made Simple - Bernie answers a question from a local resident about Super.