Retirement

Homing in on your retirement wealth

by DFS Ipswich on November 19, 2018 No comments

The ‘great Australian dream’ of home ownership is fairly widely accepted these days. It’s seen as natural to want to own your own home – or more specifically, a stand-alone home on a quarter acre block. But when you ask people why they want to own a home, it gets a bit more complicated. Things like security to raise a family, the ability to renovate and decorate, and the freedom to own pets are often cited. But those objectives shift when you’re heading towards retirement. That’s why it’s important to think about the role that homeownership plays in your overall retirement plan.

From the time you buy your home, to the life of your mortgage and beyond, the way you deal with your home as an asset can have a big impact on your quality of life once you’ve retired.

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DFS IpswichHoming in on your retirement wealth

Early retirement: living the dream

by DFS Ipswich on October 23, 2018 No comments

When you visualise your retirement, what do you see? If you’re like thousands of other Aussies, chances are you think about getting stuck into a hobby, spending more time with your family, seeing the world, or exploring the great outdoors right here in our own backyard. Whatever your image of the ideal retirement, it gives you something to work towards; a goal to keep you on track.

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DFS IpswichEarly retirement: living the dream

What determines the cost of an insurance policy?

by DFS Ipswich on September 18, 2018 No comments

There are a number of factors that determine the cost of an insurance policy. A cheap life insurance or income protection insurance policy doesn’t necessarily mean it’s an inferior one, and by the same token, the most expensive policy may not be the best to suit your needs.

The price of an insurance policy is generally a reflection of how the underwriter views the risk of you claiming on that policy. As each insurer will attribute their own measure of risk to each element of your lifestyle, personal habits and work situation, your overall risk profile can fluctuate between one insurer and another.

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DFS IpswichWhat determines the cost of an insurance policy?

Is it time to look beyond superannuation? Here’s why it makes sense to do so.

by DFS Ipswich on September 11, 2018 No comments

With the introduction of the $1.6 million transfer balance cap and related restrictions around contributions and the retention of death benefits inside superannuation, the question of whether you should also be looking to build wealth outside of super is becoming more widely-asked.

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DFS IpswichIs it time to look beyond superannuation? Here’s why it makes sense to do so.

Decluttering your lifestyle

by DFS Ipswich on August 6, 2018 No comments

At what point does the amount of ‘stuff’ we have in our lives start becoming problematic?

Spending the entire day organising his garage instead of playing in the backyard with his son was the catalyst for Joshua Becker to declutter. Now the founder of the Becoming Minimalist website and author of several books on decluttering, Becker realised he wanted to spend more time with his kids instead of maintaining his many possessions.

You don’t need to be a parent to relate to this scenario. Many of us are time poor and are looking for ways to fit more into our days. If some of your day is being spent searching for your keys in a cluttered house or working around the clock to pay for those big purchases, decluttering can give you back both time and money. Clearing out your life can result in a cleared out headspace as well, giving you more mental energy for your career and relationships.

Decluttering, the act of paring back and reducing unnecessary things from your life, has become increasingly popular. The drawbacks of owning and pushing for more are becoming apparent. Even IKEA’s Head of Sustainability, Steve Howard, was quoted as saying, “In the west, we have probably hit peak stuff.”i Reducing your consumption and streamlining your life can create space and time for the things that really matter to you. Your hard-earned money can be spent on what you value, rather than what’s being marketed to you as a ‘must-have’ item.

Review your posessions

While having a decluttered home and life will give you back time, it does take time to achieve it in the first place. Set aside a weekend to begin to tackle the clutter in your home. Even if your home isn’t packed to the rafters with possessions, it’s likely you’ve been holding onto things you no longer need. If this task feels overwhelming, the best way to approach the job is one room at a time or even start with tackling a particular space like a cupboard or a specific type of item.

Ask yourself the following questions when you review your possessions, “When did I last use this?”, “When will I use it again?”, “Is this item useful?” “Does it make me happy?” Categorise items into piles, a pile for items to be thrown out or recycled, one for those that can be donated or sold and you can even have a pile for the items that you don’t quite know what to do with (not too many of these though!).

These items didn’t arrive in your home by accident, so take a look at your spending habits. Do you buy the latest gadgets? Are you a big clothes shopper? Do you purchase a lot of gifts for your loved ones? Being conscious of what you’ve been purchasing and what your triggers are will help you hone in on potential areas to cut back on. And now that your home has been organised, you’ll have a much better awareness of what you already have and what you don’t need more of.

Consider your commitments

Once the clutter in your home has been addressed, take a look through your calendar. Is it packed with appointments, social engagements, driving the kids around? Consider what commitments you can let go of and delegate. Once your schedule has been freed up, it can be tempting to utilise the spare time you’ve just created to fit other things in. Be mindful that you don’t fill it up again out of habit. We all need some downtime to recalibrate and relax. This might mean saying no to more things, which can be difficult if you’re a people pleaser, but it’s important to protect your time.

Decluttering does involve an initial commitment in time and effort, however it’s a worthwhile activity that will pay off in the long-run. The popularity of decluttering is due to the positive impact it can have on your life. It can provide a greater sense of contentment and calm amid our increasingly chaotic and busy lives, as well as saving money and time.

https://www.theguardian.com/business/2016/jan/18/weve-hit-peak-home-furnishings-says-ikea-boss-consumerism

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DFS IpswichDecluttering your lifestyle

Life Insurance for every life stage

by DFS Ipswich on July 31, 2018 No comments

One of the biggest misconceptions around life insurance is that it’s solely designed to provide a payout if you die. But life insurance is relevant at all stages of life.

From your fancy-free 20s through your working life and into retirement, you will have different goals and priorities worth protecting.

Here we look at the types of cover you should consider at each age and stage.

20-30 years

Partying, travelling, studying, working – for many, the first decade of adulthood means plenty of fun and not a whole lot of responsibility. As a result, you’re more likely to test your limits on the sports field, on the slopes, or in the sea.

At this age it may not seem like you’ve got a lot to lose, but what about the loans you’ve taken out? That credit card bill you’ve racked up? The career you’ve been building? The mortgage you’ve just taken out with your fiancé?

Life Insurance protects the future you’re building, your partner and your family, who could face liabilities if something happened to you.

To protect what matters to you in your 20s, consider taking out Income Protection, Total Permanent Disability and Recovery Insurance with cover for Sports, Adventure Sports, Critical Injury and Accident. With age on your side, your premiums will start low if you opt for stepped premiums.

30-40 years

In your 30s you’re likely to be knuckling down: maybe you’re paying down a mortgage, building your investments or welcoming children to the family.

It’s not only a busy and exciting phase, it’s one that can come with increased expenses and potentially debt.

While it can be tempting to focus on paying down these debts or accumulating more assets, it’s equally important to make sure you’re protected.

We can’t always predict what’s going to happen in life, and while we don’t like to think about the cost of being injured or getting sick, there are ways to support yourself and your family should you need an extended period off work.

In your 30s you should consider Life Insurance, Income Protection Insurance, Recovery Insurance and Total Permanent Disability Insurance. Within each of those insurances you should look at building in additional protection against Illness, Accident, Injury and Cancer.

40-50 years

In your 40s you’re probably still plugging away at your mortgage(s), getting to the more expensive end of your children’s education, climbing the earnings ladder and adjusting your lifestyle accordingly.

At this stage it’s important to protect everything you and your family have achieved, and the things you’re still working towards.

Life Insurance, Income Protection Insurance, Recovery Insurance and Total Permanent Disability Insurance with appropriate additional cover for Accident, Illness or Cancer are all worth considering at this stage of your life.

It’s also a good idea to review your level of cover regularly to make sure it protects your current assets and liabilities.

If you haven’t done so already, think about whether your children need life insurance.

It’s a horrible thought, but the unexpected death, terminal or critical illness of a child can be devastating financially, as well as emotionally.

Child Life Cover can cover out-of-pocket expenses that are not recoverable via private health insurance or welfare schemes, and ease financial strain if a parent has to reduce their work to care for a sick child.

50-60 years

At this stage you are likely consolidating your wealth, getting to the point where your mortgage is nearly paid off and preparing for retirement.

You may also be enjoying having an empty nest and doing a bit more adventuring.

While you may feel you have fewer responsibilities now, the facts are: these are often your prime earning – and saving – years, but they’re also the years when chronic diseases often emerge.

If something were to happen to you or your partner now, your retirement plans and the lifestyle you’ve become accustomed to may be disrupted. Not only that, your children could be left with your debts.

Life Insurance is particularly important now – providing your beneficiaries with a lump sum if you die – and Income Protection, Recovery and TPD Insurance can play a vital role in ensuring you get to embrace that retirement you’ve been working towards all these years.

No matter what stage of life you’re at, life insurance is worth considering. If you’re unsure about which option is best for you, we can help.

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DFS IpswichLife Insurance for every life stage

Getting ready for retirement

by DFS Ipswich on July 24, 2018 No comments

If retirement is something you are starting to think about, now is the time to put a plan together to ensure that you achieve the satisfying and meaningful retirement that you aspire to.

While the most enticing aspect of entering into retirement is the prospect of being free to do as you wish, it can be challenging to adjust to all that free time and to navigate the changes associated with leaving the workforce. It’s important you continue to fill your days with activities that give your life meaning and make you feel valued.

Maybe you have always wanted to pursue a certain hobby and never had the time. Whether it’s learning a language, picking up an instrument or unleashing your creative side, retirement can be the time to pursue your passions.

The other thing to remember is that you have a wealth of knowledge in your field, and it can be very satisfying to pay that forward. Why not consider volunteering a few days a week at an organization that might be in desperate need of your skillset or mentoring someone who is just starting out.

Staying active

As you enter into retirement it’s important to keep in mind that old adage ‘move it or lose it’. In fact, by some estimates, lack of physical activity may be the cause of about half of the physical decline associated with ageing.i Aim to choose exercises that maintain muscle mass and flexibility as well as finding time a few times a week to get your heart rate up. Consider riding, swimming, strength training, yoga or even working on your golf game as good options.

Practical Considerations

Retirement often entails some big changes. Some people like to downsize, others seek a move away from the city’s hustle and bustle. In planning your next move, make sure that the area is adequately facilitated for your needs. Consider, for example, the proximity to medical services and importantly the rest of your family.

Funding your lifestyle

Everyone will have different aspirations when they retire. For some it will mean being able to travel and see the world. For others it will be enjoying time with the grandkids or pursuing projects they have always wanted to tackle. Whatever your goals, you want to be sure you have the money to fund the lifestyle you aspire to.

It might be worth considering a gradual approach to ease into retirement. Rather than leaving the workforce altogether, you may be able to reduce the hours you work. That way you still have some income coming in, and a staged approach to retirement can also help with the mental adjustment to leaving the daily grind behind.

Transition to retirement as a strategy

A ‘transition to retirement’ (TTR) income stream is a type of pension that allows you to access your super while you are still working. The idea is that as you wind back your hours, you subsidize your decreased earnings with a portion of your super.

To do this, you must have reached preservation age, between 55-60 depending on when you were born, and have started a super account-based pension.

The table below will assist you in working out your preservation age.

Date of birth Preservation age
Before 1 July 1960 55
1 July 1960 – 30 June 1961 56
1 July 1961 – 30 June 1962 57
1 July 1962 – 30 June 1963 58
1 July 1963 – 30 June 1964 59
1 July 1964 and onwards 60

 

If you are younger than 65, you can draw down a pension income between 4% to 10% from your TTR account balance each year. You cannot withdraw a lump sum. When you are ready to stop work all together you can roll your TTR pension back into your super account.ii

While TTR pensions can help increase your flexibility and may have tax benefits while you’re still working, they do involve drawing on your retirement savings, therefore leaving less for when you retire. Further, they may not be beneficial in all circumstances, are subject to restrictions and can be complex, so it is best to speak with an adviser before making a decision.

Having a plan for how you ease into retirement is more important than ever. If you need help creating one, come have a chat with us to discuss your options.

i https://www.betterhealth.vic.gov.au/health/healthyliving/physical-activity-for-seniors

ii https://www.moneysmart.gov.au/superannuation-and-retirement/income-sources-in-retirement/income-from-super/transition-to-retirement

Liberum Financial Pty Limited and its advisers are Authorised Representatives of Fortnum Private Wealth Pty Ltd ABN 54139889535 AFSL 357306 trading as Fortnum Financial Advisers This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial advice prior to acting on this information. Investment Performance: Past performance is not a reliable guide to future returns as future returns may differ from and be more or less volatile than past returns.
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DFS IpswichGetting ready for retirement

Federal Budget 2018-19

by Paul Dobbrick on May 8, 2018 No comments

 

The focus of this year’s budget was on reining in spending, cutting taxes for middle Australia and small to medium sized enterprises, and giving older Australians a bit of love.

The Government revealed a seven-year personal income tax plan for “lower, fairer and simpler taxes” with relief for low and middle income earners, starting 1 July 2018. The measures will also tackle bracket creep.

From 1 July 2018, the Government will provide a tax offset of up to $530 for tax payers in the 2018-19, through 2021-22 financial years.

Those earning up to $37,000 who currently face a 19 per cent tax rate will have their tax bill reduced by up to $200. These savings will increase incrementally between $37,000 and $48,000 to a maximum saving of $530 for those earning between $48,000 and $90,000. The benefit will then gradually reduce to zero at an income of just over $125,000.

Bracket creep measures will see the upper threshold of the 32.5% tax bracket increase from $87,000 to $90,000 from 1 July 2018 and to $120,000 from 1 July 2022. The Low Income Tax offset will also increase from $445 to $645 from 1 July 2022. This will be followed by a flatter personal tax system by 2024-25 where the 37 per cent tax bracket will be abolished completely. Australians earning more than $41,000 will then pay only 32.5 cents in the dollar all the way to the top marginal tax rate threshold that will be adjusted to $200,000.

The top marginal tax rate of 45 per cent will apply to incomes above $200,000.

Small to medium sized enterprises

Attention to small to medium sized enterprises was targeted at keeping them competitive globally. The Government extended the $20,000 instant asset write off for a further 12 months to 30 June 2019 for businesses with a turnover of up to $10 million.

Tax cuts for small business began in 2016-17 when companies with a turnover of less than $10 million had their tax rate cut to 27.5%. This rate was extended to companies with annual turnover less than $25 million in this financial year and from 1 July 2018 will be expanded to include companies with annual turnover less than $50 million.

The Government also announced tough new anti-phoenixing measures to stop businesses who deliberately go bust to avoid paying their bills and potentially affecting other businesses through their demise.

Superannuation

The focus on superannuation was on lost super and allowing Australians to build their super balances by saving unnecessary fees and unwanted insurance.

The ATO will be given powers to send lost super to people’s active super accounts. Fees on accounts with balances of less than $6,000 will be capped at 3 per cent and superannuation fund exit fees will be abolished for those wanting to switch funds.

For superannuation fund members aged under 25, they will need to opt in should they wish to have insurance within their super policies.

For SMSFs, the maximum number of members will increase from 4 to 6 people from 1 July 2019. This will allow for greater flexibility for larger families. In addition, the audit requirements for SMSFs will move from annually to three year periods for funds with a history of good record keeping and compliance.

For older Australians

The Pension Loans Scheme will be open to all Australians, including full rate pensioners and self-funded retirees to enable them to boost their retirement income by up to $17,800 pa for a couple, without affecting their eligibility for the pension or other benefits. An expanded Pension Work Bonus will allow pensioners to
earn an extra $1,300 a year without reducing their pension payments. This will also be extended to self-employed individuals who can now earn up to $7,800. People aged 65-74 with a total superannuation balance below $300,000 will now be exempted from the work test for voluntary contributions for the first year they would otherwise fail to meet the work test.

Aged care, skills training, Medicare and the PBS

For older Australians who would like the choice to remain in their homes and avoid residential aged care facilities, there will be a total of 74,000 high level home care places funded by 2021-22. A new Skills Training Incentive will provide mature aged workers with the opportunity to update their skills. And, employers will be incentivised with $10,000 wage subsidies for employing mature workers. Extra funding into Medicare and the PBS will see new medications being funded including those to treat spinal muscular atrophy, breast cancer, refractory multiple myeloma and relapsing-remitting multiple sclerosis and an HIV preventive drug.

For more information, please feel free to call our office.

 

General Advice Warning
The information provided in this article is general in nature and does not take into account your particular investment objectives, financial situation or insurance needs; we therefore recommend you seek advice tailored to your individual circumstances before making any specific decisions.

Dobbrick Financial Services (Gympie) Pty Ltd ABN 48 931 205 109 & DFS Oakland ABN 64 340 527 395 and their advisers are authorised representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306.

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Paul DobbrickFederal Budget 2018-19

HAVE YOU CHECKED IN WITH YOUR FINANCIAL ADVISER?

by Dobbrick Financial Services on November 1, 2017 No comments

Being aware of what fees you are paying, what superannuation you have in place and the current market conditions can be confusing. Having an appropriate financial plan in place and finding a financial adviser you feel comfortable with, can help you uncover opportunities and improve your financial future.  Setting aside time to review your finances is one of the easiest ways to keep your plans on track.  Let’s see how a financial adviser can help you get a head start in 2018. 

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Dobbrick Financial ServicesHAVE YOU CHECKED IN WITH YOUR FINANCIAL ADVISER?

LOW INTEREST RATES AND WHAT IT MEANS FOR YOU

by Dobbrick Financial Services on April 4, 2017 No comments

For a record 8 months in a row, the Reserve Bank of Australia left official cash rates on hold at 1.5%.

So what does this all mean? According to a recent survey by Reuters, the decision to keep the cash rate at generational lows was no surprise to most Economists. If you are a retiree that has relied on your cash income from savings, you may have your hand forced to look for an alternative investment as your situation could be a little vulnerable.

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Dobbrick Financial ServicesLOW INTEREST RATES AND WHAT IT MEANS FOR YOU