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Consolidating your superannuation funds can save money in fees that can be put back into the fund for your retirement.

If you have ever switched jobs, there is a good chance that you have superannuation funds sitting in two or more different accounts. This makes it more difficult to access your funds when you want to invest them and causes you to pay more money in administration fees.

Consolidating your super funds can provide easier access to funds and provide more money for your retirement. So, how do you start consolidating superannuation funds?

Check for a Lost Super Fund

The ATO has a service called “superseeker” which allows you to see if you have “lost” or forgotten about any supers. The Government has classified over 6 million super funds as “lost.” If one or more belongs to you, make sure to get your money back.

Total and Permanent Disability Insurance can keep you from depending on others if you are permanently disabled.

Nobody wants to think about what would happen if they were permanently disabled. A lot of people say, “it will never happen to me” and don’t think twice about it until they suffer a serious injury. Sadly, it could happen to you.

Ask yourself what would happen if you were suddenly unable to work. How would you live? Who would pay your bills? Do you have enough of a “nest egg” to take care of you if the unthinkable were to happen to you tomorrow?

With total and permanent disability insurance or TPD, you don’t have to worry about being broke and unable to work. So, what is TPD insurance?

What is Total and Permanent Disability Insurance?

TPD insurance is a policy that pays you if you suffer a permanent disability and are incapable to work; the disability can be caused by injury or illness. The policy is designed to compensate for lost income and to help you pay for extra medical and rehabilitation expenses that aren’t covered in your health insurance.

At Approved Financial Planners, we work with a lot of self-managed superannuation funds (SMSFs). The biggest advantage of a self-managed super fund is that you can invest your money the way you want to. However, if you don’t have the right professionals guiding you, this advantage can turn into a disadvantage.

There is a fair amount of work involved in setting up a SMSF, but you only have to do it once. Here are some of the steps involved. Remember that every situation is different and that you should always work directly with a professional when setting up an SMSF.

Obtain Consent from Directors and Trustees

Obtain written consent from trustees and directors of their appointments to their positions and full awareness of the responsibilities thereof.

SMSF Bank Account

Your SMSF will need a bank account to establish it as a trust. This will usually require a small deposit.

New regulations regarding deeming rules for Age Pension took effect on 31 March of this year. For many Australians, the new deeming regulations will decrease the amount they can collect on Age Pension. For the purposes of this post, we will try to simplify the analysis of the changes.

What is Deeming?

If you own investments, such as term deposits or shares, the Government uses a formula to “determine” your “earnings” from them and counts that number as “assets” on your Age Pension income test. This “income” is called “deemed income.” Deemed income assumes that you are making a certain amount of income on your investments; deemed income may be more or less than you are actually making.

How Superannuation Funds are Currently Assessed

The current formula for counting superannuation pensions against the Age Pension income test counts both the account balance and return of capital of your super fund.

For the Age Pension income test, any income stream that you are now taking from your super fund is counted by a formula that counts what you have received for the year and then subtracts a deduction amount. The deduction is to ensure that income isn’t counted on both the income and assets tests.

On 1 July 2014, superannuation fund payments will be made electronically using the new SuperStream system. According to the Australian Taxation Office, the new system has been introduced to assist employers in making their contributions in a more efficient, timely and consistent manner into a member’s account. SuperStream simplifies the process by which funds are deposited by providing the common standards that are lacking under the current system.

Members will be required to ensure that their SMSF bank accounts are set up to receive electronic payments and messages containing information about contribution payments. One projected benefit is that record-keeping will be improved for the purposes of taxes and auditing.

On the deadline date, all employers with twenty employees or more will be required to send all payments and contribution data through SuperStream. Smaller businesses, with 19 or less employees, will have an extra year (until 1 July 2015) to become compliant with SuperStream.

Employees of small businesses will be required to update their information with their employers by 31 May 2014. This includes the Australian Business Number (ABN) of their SMSF, the bank account in which their SMSF receives contribution payments and an electronic service address where receipt of contribution messages can be received.

With vacancies on a slight rise and rents plateauing in most areas around Perth, many property investors are focusing on finding properties that they can improve to create more revenue from rent.

Using your Property to Increase Revenue

Those who invest in rental properties are investing not only in property, but in lifestyles. People have different expectations when they rent properties. Some want to be in the inner ring of suburbs where they are close to more amenities and to the CBD. Many are willing to pay higher rents for homes that are fit and furnished to a higher quality.

For example, a dishwasher, security and air conditioning are seen by many renters as essentials on the middle to upper end of the rental market. A split reverse cycle air conditioner allows tenants to both heat and cool their property, depending upon need. These three improvements alone can increase rent by as much as $40 per week and decrease vacancy time due to increased demand.

Outside appearance is another factor in the allure of a rental property. A well-maintained garden can make a big difference in rental and vacancy. Many landlords are contracting gardeners to keep their grounds attractive and building the expense into the rent.

According to the recent Household Financial Wellbeing Index by banking giant ING, two out of every three households report that they don’t have enough funds to live comfortably between paydays.

One out of three of those households charges necessities on credit cards between paydays, while nearly half estimate that they would still need to take home another $300 per week to live comfortably. However, nearly four out of five respondents said that they would rather save a raise of 5% than spend it.

The ING Household Financial Wellbeing Index is released quarterly and ranks levels of wellbeing using six different indicators, including mortgage debt, credit card debt, household income, investments, savings and ability to pay their bills.

According to the index, only 9% report being satisfied with their present take-home pay. And among those who reported themselves as being cash strapped between paydays, 15% reported that they are chronically strapped for cash. 35% of those who feel they are often cash strapped reported using money from their savings to catch up on household expenses during shortfalls, while 31% reported using credit cards to get them through to the next payday. One out of ten report having borrowed from their family.

Many Australians purchase income protection insurance and think they are fully covered, only to find out that their policy only provided partial protection and that they don’t have enough to cover all of their expenses. While it’s great to compare policies, a lot of people look for the wrong things and end up making bad choices.

Here are some pitfalls of comparing insurance protection quotes.

Limited Payment Periods

If one is permanently disabled and can no longer produce income, they would expect to be paid for the rest of their lives. However, many policies cap payments to periods of one or two years. We won’t recommend any particular length here, but be sure that you know exactly how long you will be paid in the event that something terrible does happen to you and you can no longer work.

Note that payment is often capped depending upon occupation.

All Australians are currently required to have a superannuation policy. Many of those compulsory policies include death and disability cover, but some don’t. You may, however, purchase death and disability insurance through your super fund if you don’t have it yet.

When Can You Collect?

Nobody likes to think of death or disability, but they are events that happen to someone every day. Many find it comforting to know that they are prepared that if they are disabled and can’t work, they will have enough money to live on for the rest of their lives. Obviously, death is easy to prove. But when is one considered disabled?

Disability standards can differ from state to state or insurance company to insurance company, but there are some typical standards and tests that are a good guideline of what to expect if you do become unable to work.

One of the basic tests for collecting disability insurance is whether or not you can earn income through your own physical efforts for any occupation in which you are reasonably qualified to participate due to experience, training or education. Another way of expressing this is whether or not you are able to make two thirds of your present income through physical exertion.

Trauma cover is a relatively new product in the insurance industry. One of its more endearing qualities for many is that it provides a lump sum payment that can help those who suffer traumatic illnesses pay expenses if they are unable to work. But many ask whether it is necessary if they already have income protection cover.

Everyone’s financial situation is different and we always recommend contacting a professional financial planner or insurance provider. In the meantime, here is some information about trauma cover compared to income protection.

What is Trauma Cover?

Trauma cover is a form of insurance that provides a lump sum payment to those who sustain one of the illnesses that are on their coverage list. Usually, somewhere around 35 different illnesses are included in the coverage. The insurance is paid upon proof of being diagnosed with an illness on the list of covered conditions.

The main reason that most decide to take out trauma cover is to take care of expenses that health insurance doesn’t cover, such as rehabilitation, carers, treatments not included in health cover and loss of income.