Is it the right super fund for you?

So, you’ve rolled your super funds together. Even the one from that weird job you had back in 1993. That’s great. We’ve covered why having one super fund is so much more beneficial than multiple ones. But if you’ve already rolled your super over…or even if you haven’t, you may still be wondering…

Is it “the one” for you?

Let’s remember that super is one of the most tax-effective ways to save for retirement. And of course we want you to be co-contributing/salary sacrificing to make the most of your pre-tax dollars.

Nothing can compare to individualised advice, which is why we suggest booking in for a consultation. But, short of a face-to-face, here are the top 5 factors that influence which is the right super fund for you.

#1 Insurance

What are the insurance covers associated with the different super funds you’re considering? Are there any limits, restrictions or charges associated with the cover? There are benefits to paying insurance via your super rather than after-tax income to it’s worth investigating the insurance options.

#2 Fees

You need to compare the administrative costs associated with superannuation. While this isn’t the only factor to base your switch, you do want to be mindful about to what extend fees are eating away your superannuation figure. Take note of exit fees, entry fees and advisor service fees. (Or skip the time-consuming research and get us to do the grunt work).

#3 Choice

What is the level of investment choice within your super fund? Some funds have default portfolios, but it’s worth investigating how much freedom you have to construct your own portfolio.

#4 Service

Service goes beyond how friendly the customer service team are on the phone. Think about what your super fund actually provides you in terms of performance data, details of transactions and fees and education services.

#5 Performance

At the end of the day, or in your case — your working life — it’s the performance of the super fund that matters most. But don’t be too hasty. You should consider at least 5 years of performance data before making a switch. And as always, this is something your financial planner can help you with.

Care to cut the legwork when choosing the best super for you?

Call us today on (03) 5227 7777.

Emigration, Overseas Assets and Working Out Your Will

Australia is a county of immigrants. In fact, one in four of those of us living in the lucky country were born overseas. It makes sense, then, why it’s so common for people to hold not just Australian assets, but interests overseas as well. A townhouse in London? A villa in Spain? Sounds like a dream! That is, until it comes to your will…

What’s the big problem?

Everyone knows about the importance of having a valid and up-to-date will but not many people realise how difficult this can be if you have a house, valuable items or a bank account overseas.

An estate containing foreign assets can cause the deceased’s family further pain and even nasty surprises if the will isn’t set up to deal with the overseas interests.

The difficulties arise because every country has their own legal system and tax laws. Take my advice: you should never assume anything in finance, and that includes assuming that the succession laws and tax regimes you are familiar with in Australia will apply to any overseas assets you own.

What’s more, if you emigrated to Australia but drew your will up overseas, it might not even be valid in this country at all!

Dying with an invalid will is known as dying intestate. If this happens, your estate assets might be distributed against your wishes and incur unnecessary tax liabilities for your loved ones.

So, what should you do?

Due to the complex nature of estate planning and administration, particularly when you have assets in separate countries, seeking professional advice is never a bad idea. This takes the stress out of something that is often already emotionally trying enough.

At Financial Aspects, we provide education services around estate planning including power of attorney and wills.

If you’d like some more information on emigration, overseas assets and how they might affect your will, we’re here to help. Simply call 03 5227 7777 or email to arrange a consultation.

So you want to start a business? Here’s my 3 Top Tips

So you’re thinking of starting a business. Whether it be going out on your own or buying an established business – it’s a huge step.

As a Certified Financial Planner, I’ve noticed that aspiring business owners tend to:

  1. Overestimate the amount of money they’ll bring in, and
  2. Underestimate their business expenses.

Having your own business brings many benefits, like freedom and flexibility. But it’s also hard work. Which is why I’ve got three financial tips for the aspiring business owner. If that’s you, then whatever industry you’re in, these tips will help you feel clear about your decision to start a new business.

Tip #1: Get an independent professional to look over your business plan

Starting a new venture brings lots of emotions. Especially if your business is born from a passion, it’s helpful to have someone objective to assess your plan. A certified financial planner can help with that. We can help you plan for business expenses, and ensure you’ve got a profitable plan in place.

Tip #2: Take out Income Protection before you quit your job

If possible, it’s highly recommended that you take out income protection insurance while you’re still employed. It’s not impossible to take out income protection after you’ve started your business, but it’s trickier. So if you can, get that insurance sorted before you make the leap into full-time self-employment.

Tip #3: Get a financial back-up plan

Business Expenses Insurance is a smart back-up plan that will give you the confidence to leap. I recommend this kind of insurance to many of my clients as it’s relatively cheap and covers stuff like office rent, leases on cars, equipment, and staff salaries. This means, should you be unable to work due to accident or illness, your essential business expenses will still get paid while you focus on recovery.

Now if you’re thinking of starting a business, I encourage you to start with Tip #1. Wouldn’t you feel better about making that leap if you knew your plan was financially sound?

Travelling on the Age Pension

For clients receiving the Age Pension who are thinking of travelling overseas for more than six weeks, live abroad or claim benefits from another country, then it’s important they first notify Centrelink.

With the Christmas bills paid off, now might be the perfect time to plan your next holiday. But before take-off, it’s important people receiving the Age Pension tell the Department of Human Services first.

The Age Pension can usually be paid for the whole time seniors are outside Australia, but there may be some changes to the additional supplements they receive with their pension. These changes depend on how long someone decides to stay outside Australia, how long they have lived in Australia, and whether their destination has a social security agreement with Australia.

If your clients are thinking of retiring overseas, taking a sabbatical or even visiting family abroad for more than six weeks, they will need to log their travel plans with the department.

In addition, some age pensioners should advise of their plans to travel for less than six weeks, as there may be changes to their pension upon leaving Australia. This includes cases where they receive their Age Pension through a social security agreement with another country, or if they started receiving the Age Pension after returning to live in Australia within the last two years.

People can still receive the Age Pension even if they are going to live in another country. However, travellers who leave Australia for more than six weeks will see their Pension Supplement drop to the lowest rate and their Energy Supplement stop.

If someone leaves Australia for more than 26 weeks, their rate of payment will adjust depending on how long they were an Australian resident between the age of 16 and Age Pension age. This is called Australian Working Life Residence.

For example: A pensioner who has lived in Australia since they were 16 years old has decided to move to Canada to be closer to their son. They have informed the Department of Human Services of their plan and will receive the outside Australia rate of the Age Pension and the Pension Supplement at the base rate. However, they will need to seek advice from the department on how these payments may affect their Age Pension.

Generally, if someone has lived in Australia for more than 35 years between the ages of 16 and Age Pension age, their rate of payment will not change, but if they have lived in Australia for less, they will normally get a lower rate.

Commonwealth Seniors Health Card holders are able to travel overseas for up to 19 weeks before their card is cancelled but other concession cards, including the Pensioner Concession Card and the Low Income Health Care Card, will be invalid after six weeks away.

For example: A pensioner who has lived in Australia for 20 years between the age of 16 and 65 intends to take a 12-month holiday to tour Europe and visit family in England. They have informed the Department of Human Services of their plan. After six weeks absence from Australia, their Pension Supplement will reduce to the base rate and their Energy Supplement will cease. Their Pensioner Concession Card will also be cancelled. After 26 weeks, their Age Pension will be reduced to 20/35ths or 57 per cent of their full entitlement until they return to Australia. The change in payment rate reflects that the pensioner lived in Australia for 20 out of 35 years.

Age Pensioners can update their details on their Centrelink account through myGov by selecting Personal Details from the side menu and then select Travelling Outside of Australia, by calling 132 300 or contacting Financial Aspects on 5227 7777.

For more information about the Age Pension if you travel outside Australia, go to and search ‘Age Pension overseas’.

Source: Money and Life by the Financial Planning Association of Australia

Federal Budget 2018

On Tuesday 8 May 2018, the Australian Government handed down its Federal Budget. It’s important that you take the time to understand what the Budget proposals mean – and how they might affect you personally.

To help break down the key proposals I’ve included a Federal Budget overview that explains some of the key outcomes and what they mean to you.

Supporting you through the changes

Depending on your circumstances, the Budget proposals could have an impact on your financial situation and your financial plans for the future. If you have any concerns, or would like to discuss your financial strategy, please don’t hesitate to get in touch on (03) 5227 7777 or to arrange an appointment.

On Tuesday 8 May, the government handed down its Budget for the 2018–19 year, which is likely to be the final Budget before the next federal election. It’s therefore hardly surprising that the Coalition promised to deliver a suite of tax cuts for individuals at various income levels, as well as a range of incentives to support older Australians.
Here are some of the key Budget announcements. Note that each of these proposals will only become law if it is passed by Parliament.

Tax changes

Seven-year personal income tax plan

The government’s three-point plan for personal income tax reform will be delivered over the next seven years as follows.

Stage 1 from 2018–19:

  • A new Low and Middle Income Tax Offset (LMITO) worth up to $530 p.a. will be introduced, in addition to the current Low Income Tax Offset (LITO).
  • The top threshold for the 32.5% personal income tax bracket will increase from $87,000 to $90,000.

Stage 2 from 2022–23:

  • The top threshold for the 19% personal income tax bracket will increase from $37,000 to $41,000.
  • The top threshold for the 32.5% personal income tax bracket will increase from $90,000 to $120,000.
  • The LITO will increase from $445 to $645.

Stage 3 from 2024–25:

  • The 37% personal income tax bracket will be removed.
  • The top threshold for the 32.5% personal income tax bracket will increase from $120,000 to $200,000.

What this could mean for you

If you’re eligible for the LMITO, it will be available each year from the 2018–19 financial year until the 2021–22 financial year. You’ll receive the payment as a lump sum after lodging your tax return.

For more information about the proposed changes to tax thresholds and offsets, speak to your accountant.

Maintaining the Medicare Levy at 2%

In the 2017–18 Federal Budget, an increase in the Medicare Levy rate from 2% to 2.5% of taxable income was announced, which was legislated to take effect on 1 July 2019. However, the government has confirmed it will not proceed with this initiative and the Medicare Levy will remain at 2%.

What this could mean for you

It was expected that the increased Medicare Levy would also cause increases to other tax rates linked to the top personal tax rate, including fringe benefits tax. As the Medicare Levy is remaining unchanged, these consequential increases won’t take effect.

Increasing the Medicare Levy’s low-income thresholds

As of 1 July 2018, the government will increase the Medicare Levy’s low-income thresholds for singles, families, seniors and pensioners for the 2017–18 income year.

What this could mean for you

You won’t be charged the Medicare Levy if your taxable income is below the following thresholds:

Taxpayers entitled to seniors and pensioner tax offset
Married or sole parent$47,670$48,385
For each dependent child or student, add:$3,356$3,406
All other taxpayers
Couple/sole parent (family income)$36,541$37,089

Extending accelerated depreciation for small businesses

From 1 July 2018, the government will extend the existing $20,000 instant asset write-off by a further 12 months to 30 June 2019 for businesses with aggregated annual turnover less than $10 million.

Assets valued at $20,000 or more that cannot be immediately deducted can still be placed into the small business simplified depreciation pool. These assets can be depreciated at 15% in the first income year and 30% each income year thereafter. The pool can also be immediately deducted if the balance is less than $20,000 over this period (including existing pools).

What this could mean for you

Under this measure, small businesses will be able to immediately deduct purchases of eligible assets costing less than $20,000 that are installed and ready for use before 30 June 2019.

Superannuation adjustments

A work test exemption for retirees

From 1 July 2019, people aged 65–74 who have a total superannuation balance of under $300,000 will be able to make voluntary contributions for 12 months from the end of the financial year when they last satisfied the work test.

What this could mean for you

This initiative will make it easier to keep contributing to super after you’ve left the workforce. For example, if you retire on 30 March 2020 and your super balance is below $300,000 on 30 June at the end of the year, you’ll still be able to make voluntary contributions during the 2020–21 financial year. The usual concessional and non-concessional contribution caps will still apply.

Increasing the maximum Self-Managed Super Fund (SMSF) membership from 4 to 6 members

From 1 July 2019, the Superannuation Industry (Supervision) Act will be amended to allow the number of members in new and existing SMSFs to increase from 4 to 6.
This change will also apply to Small APRA funds (funds regulated by Australian Prudential Regulation Authority).

What this could mean for you

This initiative will provide more flexibility for larger families to be members of a single SMSF, but may also increase the risk of disputes among members. It’s also important to consider the need for:

  • multiple investment strategies to cater for members with different risk profiles
  • a corporate trustee, to avoid the risk of additional trustee penalties and to address the increased risk of fund membership changes.

Introducing a three-year audit cycle for some SMSFs

From 1 July 2019, SMSFs will have the option to move from an annual to a three-yearly audit cycle if they have:

  • three consecutive years of clear audit reports, and
  • lodged the fund’s annual returns in a timely manner.

What this could mean for you

If your SMSF has a good compliance and lodgement record, this initiative could make it cheaper to operate your SMSF, as it will remove the need for an annual audit. If a compliance breach does occur, however, it might not be detected for up to three years, potentially making it more difficult and expensive to rectify.

Supporting older Australians

New means testing rules for certain lifetime income streams

From 1 July 2019, new age pension means testing rules will be introduced for pooled lifetime income streams. Those purchased before 1 July 2019 will be grandfathered.
At this stage, however, it’s unclear exactly which income streams will meet the definition of ‘pooled lifetime income streams’.

What this could mean for you

This initiative is designed to help you avoid the risk of outliving your income. Under the new rules:

  • 60% of all income payments will be assessed as income, and
  • 60% of the purchase price will be assessed as an asset until you turn 84 (or a minimum of 5 years) and then 30% of the purchase price will be assessed as an asset for the rest of your life.

Expanding the Pension Work Bonus

The Pension Work Bonus currently allows age and service pension recipients to earn up to $250 per fortnight without it impacting their pension entitlements. Under the proposed changes, this amount will increase to $300 per fortnight from 1 July 2019. The scheme will also be extended to pensioners who are self-employed.

Pensioners will still be able to accrue unused amounts of the bonus, so that their future earnings will also be exempt from the pension income test. The maximum accrual amount will increase from $6,500 to $7,800 a year.

What this could mean for you

The Pension Work Bonus is provided in addition to the income-free area of your pension. So if you’re a single person with no other income source apart from your pension and wages, you could earn up to $468 a fortnight from working and still be entitled to the maximum age pension.

Extending eligibility for the Pension Loan Scheme

Under the current rules, pensioners can top up their age pension to the maximum rate if they:

  • receive a part pension under the income or assets test, or
  • don’t receive an age pension under either the income or assets test (but not both).

This allows pensioners to take advantage of a voluntary reverse mortgage scheme, under which Centrelink treats the top-up payments as a loan that is secured by the pensioner’s property. This loan must be repaid when the pensioner either sells the property or passes away.

From 1 July 2019, the government proposes to expand the scheme by making all age pensioners eligible and increasing the maximum top-up payments from 100% to 150% of the maximum age pension rate.

What this could mean for you

If you’re receiving the maximum age pension, you could be eligible for annual top-up pension payments of up to $11,799 for singles or $17,877 for couples. However, some restrictions may apply, depending on factors such as:

  • your age
  • whether you are single or a member of a couple
  • the value of your home
  • the expected duration of these top-up payments.

Increasing the availability of home care packages

Since last year’s Federal Budget announcement, the government has provided an additional 6,000 high-level home care packages. From 1 July 2018, the government will supplement this with a further 14,000 new packages over the next four years.

What this could mean for you

As at 31 December 2017, there were over 100,000 people in the national queue waiting for either their first home care package or an interim package, with 54.4% waiting for a high-level (Level 4) package. If you’re in this situation, the initiative could help you access a home care package sooner.

Additional funding for residential aged care and short-term restorative care

During the 2018–19 financial year, the government will provide $60 million to fund additional places in residential aged care and short-term restorative care. A further $82.5 million will support mental health services for residents of aged care facilities.

What this could mean for you

As part of this initiative, the government will simplify the aged care assessment forms available via the My Aged Care website. This will make it easier to access the aged care services that you or your loved ones need.


Colonial First State Investments Limited ABN 98 002 348 352, AFS Licence 232468 (Colonial First State) is the issuer of super, pension and investment products. This document may include general advice but does not take into account your individual objectives, financial situation or needs. You should read the relevant Product Disclosure Statement (PDS) carefully and assess whether the information is appropriate for you and consider talking to a financial adviser before making an investment decision. A PDS for Colonial First State’s products are available at or by calling us on 13 13 36. Taxation considerations are general and based on present taxation laws and may be subject to change. You should seek independent, professional tax advice before making any decision based on this information.


Do You Really Understand Compound Interest?

According to genius Albert Einstein: “Compound interest is the eighth wonder of the world. He who understands it, earns it.” But thankfully you don’t have to be a genius to understand compound interest. And once you understand it, you can earn it!

Compound interest is basically the interest on interest. It’s also described as “the snowball effect.” We at Financial Aspects think it’s a beautiful thing. For example, lets say you invest $1,000 in a savings account for one year earning 5% per annum. By the end of the year you’ll have a balance of $1050 ($1,000 principal and $50 interest). Then you can reinvest that $1050 and by the end of the second year you’ll have $1102.50 ($1050 principal and $52.50 interest). That’s without you adding in more of your own money. Simply by letting the magic of compound interest do it’s job.

So what’s the different between “principal” and “interest”?

“Principal” refers to the original amount of money you invested of which interest is calculated from, that’s paid by your financial institution.

“Interest” is money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt.

“Compound interest” is the addition of interest to the principal sum of a loan or deposit, or as I mentioned earlier: interest on interest .

What’s the magic ingredient of compound interest?

In a word, time.

The earlier you start, the better.

For example, take a look at the images that accompany this blog post.

Over the course of 20 years, 60% of the total value of the investment after 20 years is the direct result of compound interest. And you’ll notice that those who start investing at 25, vs 35 experience the greatest growth. But if you’re no longer 25, please don’t despair, just choose to see the beauty of compound interest and use it for the greater good. If you have children, consider educating them on savings and compound interest (Kids love the invisible magic of making money).

If you’re unsure how you should be investing, call us to arrange a consultation. We can chat through your options and get you on the road to discovering the 8th wonder of the world.

How to Make the Most of Your Retirement Income

If you have friends and family who are retired — or you are retired yourself — you may be wondering how to make the most of your money.

Perhaps you’re a few years away from retirement and still in the planning phase. Or perhaps you’re already retired and want to manage (and maximise!) your income efficiently.

So what are your income sources?

Chances are you have more than one source of income. But it’s worth remembering that different income sources impact each other. The goal, always, is to make your retirement as comfortable, stress-free as possible. After all, you’ve worked hard and deserve to enjoy it.

Income sources may come from:

  • Age pension
  • Sale of the family home
  • Superannuation
  • Investments beyond your super
  • Home equity release

You may even have some part-time work that produces extra income (hopefully without the responsibility of full-time employment).

What are your goals?

Before you put a plan together, it’s worth thinking about your goals. Perhaps you’ve had a dream holiday in mind. How much will you need? What source of income will fund it? Consider also, if you’re thinking of downsizing by selling the family home, how will this impact your age pension?

Get the support you need

Many aspects can affect your ability to make the most of retirement income. Everything from health concerns, the opinions and expectations from adult children, influence of friends, knowledge and awareness of your rights (and responsibilities). From our experience as Financial Planners, we know that guessing only leads to stressing. So it’s smarter to get the facts, get the support of an independent, qualified Financial Planner, and in this way feel secure and steady in your retirement years.

Because of our low overheads we can keep costs affordable and accessible. So don’t hesitate to book a consultation with us. Retirement need not be an uncertain period. You can maximise your income and we can help.

Can I afford to have a financial planner?

Money: it’s a word that triggers all sorts of emotions and reactions. Whether you’re worrying about your financial future or unsure about where your money is currently going, one thing is for certain: financial peace of mind benefits every area of your life.

While many people crave financial peace of mind, it can be hard to break free of our ingrained habits, beliefs or fears around finance. Without a clear picture, or the right information, we cannot even see what is possible.

Now you may be wondering if you’re in a position to afford a financial planner. But the real question you need to ask is: can I afford NOT to have one?

Without a clear plan (and picture), you are probably not in the best position to make excellent decisions. But when you have a clear financial picture (and plan) you feel empowered, in control and best yet: you’re set up to actually reach your goals.

At Financial Aspects, we know that finance is a personal issue: that’s why we offer personal care, attention and clear strategies that get you great results.

Here are just a few of the ways we can help you financially (along with the flow of benefits to other areas of your life):

  • Budgeting for couples. (We help you get on the same page to reduce stress and improve your relationship.)
  • Super strategies. (Discover new possibilities for your future to feel calm in the present.)
  • Budgeting for change. (If you’ve had a change in employment or have been made redundant we can guide you through this transition.)
  • Investment advice. (Avoid making bad decisions with our quality wealth creation strategies.)
  • Personal Insurance. (Protect your money and assets in a way that makes financial sense.)
  • Retirement planning. (Set yourself up to relax into a new phase of life.)

The many benefits of hiring a financial planner far outweigh the cost. Because we are a small, family-run, financial planning business we offer fair fees that are affordable. And because we genuinely care about helping people manage their finances, we keep investment costs as low as possible.

If you’d like to gain a sense of calm and control over your finances, we’re here to help. Simply call 03 5227 7777 or email to arrange a consultation.

How a Budget Can Bring Back that Loving Feeling

There’s an old saying: “When money troubles come through the door, love goes out the window.” This rings true for many couples who, no matter what their financial picture, experience conflict over finance – particularly spending. People don’t have to be on the poverty line to experience financial conflict, as generally speaking, the more we earn the more we tend to spend. Which explains why couples may be at odds — not about how much is coming in – but by how much is going out (and on what).

In relationships, it’s easy to lose that loving feeling when you’re at odds about your spending priorities.

If you’re unhappy about your partner’s spending habits, before you call a couple’s therapist you might want to consider calling a financial planner.
As a Certified Financial Planner, I’m a neutral party and an observer. I can see how different spending priorities create real tensions in otherwise happy relationships. I also know how to solve these problems with the magic of….budgeting.

What is budgeting?

Quite simply, budgeting is the process of working out what’s appropriate to spend money on so that saving is possible. While many people resist creating a budget because it’s “boring”, I like to think of a budget as a relationship miracle worker. With a clear budget, one that both parties agree on and which accommodate your individual as well as shared values and goals, couples can eliminate the blame game. Without a budget, it’s easy to get caught up in judgment over each other’s spending.

The beauty of a budget: understanding.

With the help of a Certified Financial Planner, you actually get the chance to articulate what really matters to each of you individually and to set some joint goals. For example, a husband may judge a wife for her passion for fashion, or a wife may resent her husband’s lavish lunch and latte habit while she’s taking a packed lunch to work each day. With space to see where money is currently being spent, couples can be supported to work out exactly where they want their money to go, without sacrificing all the things that make life enjoyable.

Get on the same page:

Since money is an emotive issue, it’s easy for couples to either avoid the topic, resent each other’s spending or openly argue: this isn’t good for anyone.

A financial planner, as a neutral third party, can help couples out of this tug of war to get on the same page. Budgeting isn’t boring; it could bring back that loving feeling. And it definitely minimise relationship tensions and stress.