Good Advice, Good Value, Good People

Archive for Superannuation Fund

Superannuation Statements – What to Check

Last financial year’s superannuation statements are hitting your mail boxes over the last week.

It is important that you check your details are correct. The type of information you should be checking:

  • What is your balance.
  • Is the balance trending upwards over time – remember the Centrelink aged pension will probably not provide enough for the niceties in life. Chances are you will be relying on your superannuation for a better quality of life in your retirement.
  • Are all this year’s superannuation payments showing on your statement?
    Only recently we had a client whose superannuation guarantee payments from his employer were going into a different fund to the one he thought. And in rare cases, unscrupulous employers have been known not to make their payments at all even though they have a legal requirement to do so.
  • Do you have insurance within your superannuation (life, income protection or total permenant disability)?  Is it still sufficient for your needs?
    Remember that insurance premiums within your super fund are paid from your superannuation returns rather than billed to your directly. This makes them a convenient form of extra financial security, but one which it is easy to overlook.
superannuation statements in Australia

It is important to understand your superannuation – and superannuation statements – at every stage of life not just as your retirement

If you have multiple small balances in superannuation it is a good idea to consolidate them. Before you do so check you are not going to lose important insurance cover.

Lastly, check that you have received all your statements because it is easy to forget the small balance accounts.
If you move addresses and a couple of your superannuation statements are returned to the superannuation company, you might not notice.  Small balance lost super can end up in lost super.

If you need more in depth help understanding your superannuation statement, determining the right insurances, finding and consolidating superannuation please contact our friendly staff at Approved Financial Planners in Perth and we will help you get your superannuation in order.

AMP Capital Expands SMSF Suite with Core Infrastructure Fund

If you are one of our self managed superannuation fund (SMSF) clients in the Perth area, you may be interested in this news. Our parent company, AMP Capital, has just added its Core Infrastructure Fund to their SMSF suite due to a growing number of SMSF trustees expressing interest in the class of infrastructure assets.*

Self Managed Superannuation Fund Suite with Core Infrastructure Fund

Entitled the “AMP Capital Core Infrastructure Fund,” this fund provides retail investors with access to an asset class that is usually available only to large institutional investors: direct infrastructure assets. The AMP Capital Core Infrastructure Fund invests in what AMP Capital calls a “targeted 50-50 mix” of listed infrastructure securities and direct infrastructure. The listed infrastructure securities provide investors with a degree of liquidity.*

According to the AMP Capital website, the AMP Capital Core Infrastructure Fund provides SMSF trustees with the opportunity to own “high quality direct assets” such as Angel Trains in the UK or Melbourne Airport in Australia. The minimum investment for the AMP Capital Core Infrastructure Fund is $10,000.*

According to John Julian, who is the Portfolio Manager for the AMP Capital Core Infrastructure Fund, the fund “aims to provide investors with both sustainable income and capital growth over the long term.”*

Mr Julian sees investment in infrastructure growth as a “never-ending cycle” in which investment creates infrastructure, infrastructure boosts “long-term economic growth” and growth creates the need for more infrastructure.*

In the five year period to 31 December 2015, the AMP Capital Core Infrastructure Fund delivered a return of 11.3% pa, which includes a cash yield of 6.6% pa. When compared to the S&P/ASX 200 Accumulation Index over the same period, the AMP Capital Core Infrastructure Fund displayed only 40% of the volatility of Australian equities while providing 162% of the return.*

Call a Self Managed Superannuation Adviser in Perth

To learn more or to express interest in the AMP Capital Core Infrastructure Fund, call us today: 1300 787 274.

* AMP Capital, 10 February 2016. “AMP Capital adds its Core Infrastructure Fund to SMSF Suite.”

Understanding Superannuation

One of the many financial services we offer at Approved Financial Planners is help with your superannuation fund. Whether you choose self managed superannuation or any of the super funds available to you, we can provide sound financial advice.

How Superannuation Works

Understanding Superannuation in Australia

Money is placed into your superannuation account, also known as a “super account” or “super,” by you, your employer or both. The money in your super fund is then invested with the intent of it growing in time, even though it will occasionally return a negative result for the year. *

As a super grows, the money that was earned is reinvested and also earns a return; this helps your balance grow even more. On member contributions for which you claimed a tax deduction or on contributions from your employer, your tax is only 15% of any contribution up to $30,000 per year. The $30,000 limit is known as “concessional contributions cap.” *

If you are 50 years of age or older, your “cap number” is $35,000 per year. If a combination of certain contributions and your income is greater than $300,000 per year, you will be taxed at a rate of 30% on all contributions that are over the cap. *

This money is held for you until you die, retire or reach a certain age. Depending on your date of birth, this age is between 55 and 60 years old. Your benefit is then paid in either a lump sum or an income stream. *

Choosing Your Super Fund

Most Australians have the option of choosing their own superannuation fund. If you shift jobs, you can often take your super fund to your new place of employment. AMP Capital recommends checking with your new employer’s human resources or payroll department.

We Can Help You

If you would like to learn more about your super fund, call Approved Financial Planners on 08 6462 0888 today. We have a wealth of experience in helping people like you maximise their supers and their retirements.

*AMP Capital. Understanding Super. Make your super work harder for you.

Where Does Your SMSF Go When You Die?

Estate planning is not one of the more pleasant things to think about, but it can be comforting to know where your Self-Managed Superannuation Fund (SMSF) is going to go when you die. It can also be comforting to know that taxes won’t consume a large portion of their inheritance. Here are some of the fundamentals of where an SMSF goes when you die and how taxes are paid.

According to the Australian Securities and Investments Commission (ASIC), it is recommended to fill out the form which determines where your money is supposed to be distributed in case of your death. This can keep your family’s money from being “tied up” in their time of grief. (1)

Estate Planning For SMSF

If You Die, Who Gets Your Super?

In the case of your death, the trustee of your super pays the money, known as your “death benefit,” to your dependent, dependents or estate. Your dependents include your spouse or same sex de facto partner and your children. It can also include anyone with whom you were financially interdependent or anyone who was dependent upon you financially. (1)

Usually, your super fund will allow you to nominate, in a binding or non-binding fashion, the person or people to whom your death benefit will be paid. (1)

Binding Nomination

A binding nomination forces the trustee to pay the death benefit to the person or people you specified. You can choose whether the money be paid to one or more dependants or to your personal legal representative, who then pays it out according to your will. (1)

Non-Binding Nomination

A non-binding nomination is more of a guide to your trustee as to who gets your benefits. However, it is the trustee who makes the final decision. The trustee is not bound to follow the instructions you left in your will. If you nominate someone who is not a dependant, the trustee will still have the option to give your death benefits to dependants, instead. (1)

Factors for Taxing a Super Death Benefit

According to the Australian Taxation Office, taxation on super death benefits are dependent upon a number of factors: (2)

Whether the benefit is paid to a dependant or a non-dependant person. (2)

Whether the benefit is paid as a superannuation income stream or a lump sum. (2)

Whether the SMSF is tax-free or taxable and whether taxes were already paid on the taxable portion by the SMSF. (2)

The age of the SMSF owner when they died. (2)

The age of the person receiving the death benefit. (2)

Tax Implications

Dependants are not required to pay taxes on a lump sum benefit. If the benefit is paid as an income stream, taxes will be computed accordingly. If either the deceased or the beneficiary is more than 60 years old, the taxed element requires no payment. The untaxed element is paid at the beneficiary’s marginal tax rate with 10% subtracted as an offset. (2)

If neither the deceased nor the beneficiary is 60 years of age or older, the taxed element is taxed at marginal rate minus a 15% offset. The untaxed element is taxed at the marginal rate. (2)

Call Approved Financial Planners Today

At Approved Financial Planners, our estate planning advisers can help you make sense of an ever-growing web of regulations and paperwork. We have the know-how to help ensure that your SMSF is going where you want it to when you die.

Call us today: 08 6462 0888.

(1) Australian Securities and Investments Commission, MoneySmart, “Super Death Benefits,” https://www.moneysmart.gov.au/superannuation-and-retirement/how-super-works/insurance-through-super/super-death-benefits. 21 August 2015.
(2) Australian Taxation Office, “Superannuation Death Benefits,” https://www.ato.gov.au/Individuals/Deceased-estates/Superannuation-implications/. 4 June 2014.

Setting up an SMSF? Watch Out for These Pitfalls.

A lot of Australians are opting out of their employer’s superannuation funds and setting up self managed superannuation funds (SMSF’s). At Approved Financial Planners, we have helped numerous people in the Perth area with their SMSF’s.

According to the Financial Planning Association (FPA), though, some costly mistakes are common among those establishing SMSF’s. Here are a few of them.

Letting Your Money Sit

Some Australians who opt for SMSF’s put their money into them but just let it sit as cash. The FPA stresses the importance of those who establish an SMSF having a plan and a strategy for how their funds are going to be invested.*

Pitfalls For Setting up an SMSF

Inaccurate Assessment of Costs

It can cost a lot of money initially to set up an SMSF. Then there are ongoing costs, such as investment fees, legal advice and ongoing accounting. If there is a corporate trustee, it will cost money to maintain the trustee structure.*

Every financial transaction or investment associated with the fund may have a fee or multiple fees. If you choose to invest your SMSF in rental property, for example, you will have to pay stamp tax duty, maintenance, property management and a host of other costs. Accurate assessment of costs for any investment is important.*

Underestimating the Time and Knowledge it Takes to Run an SMSF

According to the FPA, the most important facets are ongoing research or due diligence, investment management and tax returns. These must be done by you or you must hire a team to run your investments for you.

Call Approved Financial Planners Today

At Approved Financial Planners, we offer full self managed superannuation fund services. To learn more or for an obligation-free consult, call us today: 08 6462 0888.

*Financial Planning Association of Australia: “Common mistakes people make when setting up their SMSF’s.”
http://fpa.com.au/blog/common-mistakes-people-make-when-setting-up-their-smsf/

Making the Right Choices as an SMSF Trustee

With over 80 years combined experience in the financial services industry, we have been providing advice on self managed superannuation funds (SMSF’s) to Perth area investors since self management of superannuation funds became an option in late 1999.

Recently, our parent company, AMP Capital, conducted research on what SMSF trustees considered to be the most difficult part of managing an SMSF. The research was conducted by Investment Trends.*

Right Choices As SMSF Trustee

Poll Results:*

Most Difficult Task:*

27%: Investment selection.
24%: Keeping track of SMSF rule and regulation changes.
23%: Administration and paperwork.
19%: Finding enough time to conduct investment research.

Other Questions:*

76%: Made at least one new investment with their SMSF in the previous twelve months.
35%: Made from 2-5 investment changes in the previous twelve months.
16%: Made between 6-10 changes in the previous twelve months.

Shift in Allocation of Assets:*

38%: Made what was termed a “substantial shift” in the allocation of their SMSF’s assets in the previous twelve months.
Of those 38%:*
24%: Became more defensive.
24% Became more diversified.
23% Changed due to optimism in Australian Shares Market.
22%: Tried to focus more on income.

Decision-Making:*

More than 50% created an SMSF because they wanted more control over their investments.
44%: Make all of the investment decisions on their own.
23%: Make decisions with one other person.
17%: Use a Financial Advisor for help.

Goals:*

41%: Long term goals.
39%: Funding additional personal goals.
37%: Meeting day to day living expenses.

Using a Financial Advisor

27% said they would consult a financial advisor if their SMSF wasn’t performing according to their needs. 48% said they would alter their investments on their own.*

Make the Right Choice

At Approved Financial Planners, we combine more than 80 years’ experience in the Perth market with the resources of our parent company, AMP Capital. To learn more or for a free consult, call us today: 08 6462 0888.

SMSF Trustee Source

Splitting Super Contributions with Your Spouse

Superannuation splitting is a concept that we have shared with a growing number of our Perth area clients. Known as “super splitting,” it is a way you can split your before tax or concessional super contributions with your spouse. The two most common types of concessional super contributions are your arranged salary sacrifice contributions and your employer’s mandatory contributions under the superannuation guarantee.*

Splitting Super With Your Spouse

If your super fund allows you to do it, you can split contributions to a different fund or within the same fund. While contributions can be split, your super fund’s account balance cannot. If you wish to split your contributions, you must be in a de facto relationship or married to the person with whom you are splitting your super contributions.*

To receive split contributions, your spouse must be under 55 years of age or between 55 and 64 but not retired (other conditions may apply). If your spouse is 65 or more years of age, you cannot split any superannuation contributions.*

Why Some Couples Split Supers

One of the more common reasons for super splitting is if the wife takes off work to raise a family. This allows her super to be boosted. This strategy can often help one be more prepared for changes in superannuation rules and/or taxes.*

If one spouse is older than the other, contributing to the older spouse’s super can provide faster access to the funds by building up the super of the older spouse. Also, contributing to the younger spouse’s super can help protect the younger spouse’s super funds from the means test.*

Talk to a Superannuation Expert

Everyone’s financial situation is different. Remember that your superannuation fund affects your lifestyle when you retire. At Approved Financial Planners, we have been helping clients in the Perth area with their superannuation funds since 2005 and have more than 80 years combined experience in financial planning.

To learn more or for a consult, call us today: 08 6462 0888.

Splitting Super Contributions—The What, the Why and the How!

Defined Benefit Super Scheme? Why a Super Checkup May Be Beneficial.

Many Government or public sector employees have PSS defined benefit superannuation funds. We would like to explain the difference between an accumulation-style superannuation fund, a defined benefit superannuation fund and a self managed superannuation fund.

When you retire, especially if you plan to stick around the Perth area, you don’t know how much money you will need to live the lifestyle you want. We feel it is helpful for those with defined benefit supers to understand their options.

Defined Benefit Super Scheme

What is a PSS Defined Benefit Super Fund?

A PSS defined benefit super is so named because the benefits you receive upon retirement will be “defined” or based upon final average salary (FAS), your contribution rate and the amount of time you were a PSS member. The Australian Government and other participating employers offer this kind of super fund.*

Why is it Different

Other super funds are invested for you. You can either gain money or lose money. The amount of money you eventually collect is dependent upon how much money is in your super fund. When you retire, you can collect your super as a monthly payment (retirement income stream), a lump sum or a combination of both.**

How a “Super Checkup” Could be Beneficial

There are many choices and options for you. We would be happy to have one of our financial advisors examine your situation and explain your options. You may want to keep your money in your current fund. You may want to invest it in another fund. You may want to invest it in a self managed superannuation fund.

We have a wealth of experience in helping people in Perth maximise their supers. To learn more or for an obligation-free consult, call Approved Financial Planners today: 08 6462 0888.


*Australian Government, “How PSS Works,” https://www.pss.gov.au/your-scheme/how-pss-works/#.VeVHHflViko

** Australian Securities and Investments Commission: How Super Works
https://www.moneysmart.gov.au/superannuation-and-retirement/how-super-works

Is Your Super Working Hard Enough for You?

Have you checked your superannuation fund lately? Is it working hard enough for you? Ideally, everyone in Perth would answer those questions “yes.” However, the reality is that some people pay a lot of attention to their supers and some just stick with the fund their employer uses and hope it increases on “auto-pilot.”

If you are someone who keeps track and is happy with how your employer’s retail or corporate fund is performing, great.

Super Working Hard Enough for You

Superfund Basics

Currently, your employer is required to pay 9.5% of your income, not including overtime, to your superannuation fund. You are allowed to make contributions to the fund as well. Depending on the conditions of your employment, the money may go into a corporate fund chosen by your employer or a fund that you choose between a retail fund and an industry fund or a self managed super fund.

The super fund invests your money for you. All increases are reinvested for you and you make money off of the money the fund has already made. This is similar to “compounding interest.”

You are not allowed to access your money until you retire or you reach a specific age. By July 2024, that age will be 60. Then, you can choose to receive your super fund in payments or a lump sum.

Self Managed Superannuation Fund (SMSF)

An increasing number of Australians are choosing to manage their own super funds. This allows you to choose investment platforms and diversify however you like. However, an SMSF isn’t for everyone.

Call Approved Financial Planners Today

Choosing the super fund that is right for you involves a lot of factors. It is best to talk to an experienced financial advisor about your individual situation. We have more than 80 years of combined experience in providing financial planning and superannuation advice for clients in the Perth area. Call 08 6462 0888.