With you along the way
At East Coast Financial Planning we work with you along the way on life’s journey. Whether you are getting married, starting a family, embarking on the trip of a lifetime or planning to enjoy your years after work, we can help.
It all starts with understanding exactly what it is you want to achieve. We will then create your financial plan to help you get there.
We can help you with ...
Retirement Planning
Transitioning into retirement
You no longer have to retire on the day you turn 65. The day you stop working is now in your hands. By using a Transition To Retirement strategy you can take control of your retirement date, prolong your retirement or use it to turn a redundancy into a time of opportunity.
Managing your retirement
Reaching your retirement is a significant milestone, and it’s important you live the life you want to. There are still many ways to make the most of this stage of your life and you might have a few questions.
- Where should I invest my money?Should you leave it in super or start an income stream? Take the annuity or pension? How good are Retirement savings accounts?
- Make your money last Do you have the right asset mix? And have you structured your finances to maximise government benefits? And what’s the best way to manage your debt?
- Do I pay tax in retirement? It depends on how the money went into your super, how you take money out and how old you are. We look at ways to minimise the tax impact.
- How much can I withdraw from super? What are the minimums and maximums you need to be aware of.
- Preparing for residential careLooking for aged care can be difficult and there’s lots to consider. Being aware means being prepared.
- Estate planningGood estate planning isn’t just about making a will. It’s a good way to take stock of your finances. Read more
For retirement planning advice in Broadbeach contact East Coast Financial Planning on Phone 07 5530 5242.
Retirement Planning
Retirement may seem like a long way off but putting money into super now is still a tax effective way to invest your money. You also can benefit from the effects of compounding returns.
Read More ....
Retirement Planning
Transitioning into retirement
You no longer have to retire on the day you turn 65. The day you stop working is now in your hands. By using a Transition To Retirement strategy you can take control of your retirement date, prolong your retirement or use it to turn a redundancy into a time of opportunity.
Managing your retirement
Reaching your retirement is a significant milestone, and it’s important you live the life you want to. There are still many ways to make the most of this stage of your life and you might have a few questions.
- Where should I invest my money?Should you leave it in super or start an income stream? Take the annuity or pension? How good are Retirement savings accounts?
- Make your money last Do you have the right asset mix? And have you structured your finances to maximise government benefits? And what’s the best way to manage your debt?
- Do I pay tax in retirement? It depends on how the money went into your super, how you take money out and how old you are. We look at ways to minimise the tax impact.
- How much can I withdraw from super? What are the minimums and maximums you need to be aware of.
- Preparing for residential careLooking for aged care can be difficult and there’s lots to consider. Being aware means being prepared.
- Estate planningGood estate planning isn’t just about making a will. It’s a good way to take stock of your finances. Read more
For retirement planning advice in Broadbeach contact East Coast Financial Planning on Phone 07 5530 5242.
Superannuation
What is superannuation?
Superannuation (or super) is a fund specifically designed to help you save and invest for your retirement. It’s restricted as you generally can’t withdraw from super until you retire or reach your preservation age (that’s the intention, although there are special conditions of release). And super funds are set up as trust funds. This means a trustee is appointed to manage the fund on behalf, and for the benefit, of its members. Super receives special tax treatment compared to your other money. When it comes to investing over the long term, there aren’t many better tax-effective ways to save for your retirement. Lower taxes and more investment options – such as local and international shares, property and fixed interest investments – offer your super more potential to grow.
Why do I need super?
- Super is compulsory for employees. Superannuation Guarantee (SG) contributions** were introduced to help us take control of our retirement.
- The next step is to use our AMP super simulator to see how you’re tracking and determine what strategies you can use to reach your goals.
** Deposits into a super fund are called contributions.
Advantages of super
Super opens your money to the world of investment markets and you can choose how it is invested. Money in super is taxed in different ways to your other investments. It’s designed to reward you for investing for the long term. Your insurance premiums, which are part of your super contributions, may be paid from your pre-tax salary, which is a tax-effective way to enjoy the protection you and your family need.
How does my super work?
The most common type of super is an accumulation fund, which is like a managed fund or investment. The main difference is the advantageous tax treatment on contributions and earnings which your money enjoys until you retire. If you have a lot of assets and have the time, you may want to consider a self-managed super fund to take control of your super.
Making a contribution
Deposits into super are known as ‘contributions’. There are two types of contributions. They can be made from your:
- pre-tax income (concessional contributions) and
- post-tax income (non-concessional contributions).
Generally, concessional contributions (made from pre-tax income) attract a contributions tax of 15%, which can be significantly lower than your marginal tax rate. Tax on non-concessional contributions (made from post-tax income) does not apply. However, there are caps on both these types of contributions which vary depending on your age.
Benefits
- Earnings in super are taxed at up to 15% (and only 10% on capital gains), which is lower than most people’s marginal tax rate. If you start a pension at retirement then the tax on earnings in super reduces to nil.
- If you withdraw after age 60 your money is tax free.
- You can withdraw your super balance (the benefit) when you reach your preservation age. This varies depending on your birth date. By 2025 everyone will have a preservation age of 60.
- There are different tax treatments on lump sum payments depending on the size of the benefit and the age and service period of the member.
- Money invested after July 1999 is fully preserved, which means it can’t be accessed until you reach your preservation age.
More flexibility
- Super is becoming more flexible with more strategies and ways to reach your retirement goals:
- The government’s co-contribution scheme is designed to help low to middle income earners get more into their super.
- Concessional contributions can be used to reduce your tax.
- A transition to retirement strategy means you can still work full time or part time after your preservation age and still contribute to your super.
- Self-managed super funds allow you to take even more control of your super.
East Coast Financial Planning, Financial Planners in Broadbeach provide superannuation advice. Contact us on Phone 07 5530 5242.
Superannuation
Superannuation is a way to save for your retirement. You build up super while you are working to make sure you can have a comfortable retirement.
Read More....
Superannuation
What is superannuation?
Superannuation (or super) is a fund specifically designed to help you save and invest for your retirement. It’s restricted as you generally can’t withdraw from super until you retire or reach your preservation age (that’s the intention, although there are special conditions of release). And super funds are set up as trust funds. This means a trustee is appointed to manage the fund on behalf, and for the benefit, of its members. Super receives special tax treatment compared to your other money. When it comes to investing over the long term, there aren’t many better tax-effective ways to save for your retirement. Lower taxes and more investment options – such as local and international shares, property and fixed interest investments – offer your super more potential to grow.
Why do I need super?
- Super is compulsory for employees. Superannuation Guarantee (SG) contributions** were introduced to help us take control of our retirement.
- The next step is to use our AMP super simulator to see how you’re tracking and determine what strategies you can use to reach your goals.
** Deposits into a super fund are called contributions.
Advantages of super
Super opens your money to the world of investment markets and you can choose how it is invested. Money in super is taxed in different ways to your other investments. It’s designed to reward you for investing for the long term. Your insurance premiums, which are part of your super contributions, may be paid from your pre-tax salary, which is a tax-effective way to enjoy the protection you and your family need.
How does my super work?
The most common type of super is an accumulation fund, which is like a managed fund or investment. The main difference is the advantageous tax treatment on contributions and earnings which your money enjoys until you retire. If you have a lot of assets and have the time, you may want to consider a self-managed super fund to take control of your super.
Making a contribution
Deposits into super are known as ‘contributions’. There are two types of contributions. They can be made from your:
- pre-tax income (concessional contributions) and
- post-tax income (non-concessional contributions).
Generally, concessional contributions (made from pre-tax income) attract a contributions tax of 15%, which can be significantly lower than your marginal tax rate. Tax on non-concessional contributions (made from post-tax income) does not apply. However, there are caps on both these types of contributions which vary depending on your age.
Benefits
- Earnings in super are taxed at up to 15% (and only 10% on capital gains), which is lower than most people’s marginal tax rate. If you start a pension at retirement then the tax on earnings in super reduces to nil.
- If you withdraw after age 60 your money is tax free.
- You can withdraw your super balance (the benefit) when you reach your preservation age. This varies depending on your birth date. By 2025 everyone will have a preservation age of 60.
- There are different tax treatments on lump sum payments depending on the size of the benefit and the age and service period of the member.
- Money invested after July 1999 is fully preserved, which means it can’t be accessed until you reach your preservation age.
More flexibility
- Super is becoming more flexible with more strategies and ways to reach your retirement goals:
- The government’s co-contribution scheme is designed to help low to middle income earners get more into their super.
- Concessional contributions can be used to reduce your tax.
- A transition to retirement strategy means you can still work full time or part time after your preservation age and still contribute to your super.
- Self-managed super funds allow you to take even more control of your super.
East Coast Financial Planning, Financial Planners in Broadbeach provide superannuation advice. Contact us on Phone 07 5530 5242.
Wealth Protection
Total and permanent disablement (TPD)
TPD cover provides a lump sum if you become unable to work due to a permanent disability. This cover can help you pay for medical expenses, repay major debts and help provide for your future.
Trauma cover
Trauma cover provides a lump sum if you’re diagnosed with a medical condition or undergo a procedure outlined in your policy. This may include a heart attack, major organ transplant, cancer or stroke — to name a few. Trauma cover is designed to help cover your medical costs and living expenses, providing you with some financial security during the important recovery period.
Death cover
Death cover may be important for people of all ages, especially if you have others relying on you and large debts such as a mortgage. Death cover provides a lump sum to your beneficiaries if you die. This can be used to help meet the costs of your mortgage, other debts and/or cover your family’s future expenses. Many policies make an advance payment of the insured sum if you are diagnosed with a terminal illness. With Death, Total Permanent Disablement and Trauma cover you can:
- Find comfort in knowing your family will receive a lump sum payment to help them financially if you were to die or become terminally ill.
- Receive financial support if you become seriously disabled, maintain your quality of life and help meet the cost of rehabilitation programs and daily living expenses with TPD insurance.
- Take the financial pressure off and give yourself time to recover, should you experience one of the traumatic events listed in our trauma cover, including cancer, stroke, heart attack and coronary artery surgery. Children’s trauma cover can also be selected.
Income Protection Insurance
You insure your car, the family home and even your health – so why not your ability to earn an income. Have you ever thought about what would happen if you became ill or were injured and couldn’t work for an extended period of time? Would you be able to meet your financial commitments without your regular income? If not, it’s time you considered income protection. When you think about what life would be like without your regular income, your earning capacity becomes possibly your greatest asset. Chances are, you’ve based the achievement of your goals and ambitions on having a regular cash flow. If you became ill and were unable to work and maintain that cash flow, your goals may no longer be achievable.
Business Overheads Insurance
What would happen to your business if you were too ill or injured to work? Business Overheads Insurance helps you meet your ongoing business expenses by reimbursing eligible business overheads as a monthly amount if you are too ill or injured to work.
Protect your business expenses
Recover with peace of mind knowing that, if you are unable to work due to injury or illness, your business overheads insurance will reimburse your business expenses such as:
- Rent
- Property Rates
- Vehicle leases
- Salaries
East Coast Financial Planning provides wealth protection advice in Broadbeach. Contact us on Phone 07 5530 5242.
Wealth Protection
Insurance is the foundation of all financial plans. We can help you evaluate the risks and come up with the right insurance solution for you and your family.
Read More ....
Wealth Protection
Total and permanent disablement (TPD)
TPD cover provides a lump sum if you become unable to work due to a permanent disability. This cover can help you pay for medical expenses, repay major debts and help provide for your future.
Trauma cover
Trauma cover provides a lump sum if you’re diagnosed with a medical condition or undergo a procedure outlined in your policy. This may include a heart attack, major organ transplant, cancer or stroke — to name a few. Trauma cover is designed to help cover your medical costs and living expenses, providing you with some financial security during the important recovery period.
Death cover
Death cover may be important for people of all ages, especially if you have others relying on you and large debts such as a mortgage. Death cover provides a lump sum to your beneficiaries if you die. This can be used to help meet the costs of your mortgage, other debts and/or cover your family’s future expenses. Many policies make an advance payment of the insured sum if you are diagnosed with a terminal illness. With Death, Total Permanent Disablement and Trauma cover you can:
- Find comfort in knowing your family will receive a lump sum payment to help them financially if you were to die or become terminally ill.
- Receive financial support if you become seriously disabled, maintain your quality of life and help meet the cost of rehabilitation programs and daily living expenses with TPD insurance.
- Take the financial pressure off and give yourself time to recover, should you experience one of the traumatic events listed in our trauma cover, including cancer, stroke, heart attack and coronary artery surgery. Children’s trauma cover can also be selected.
Income Protection Insurance
You insure your car, the family home and even your health – so why not your ability to earn an income. Have you ever thought about what would happen if you became ill or were injured and couldn’t work for an extended period of time? Would you be able to meet your financial commitments without your regular income? If not, it’s time you considered income protection. When you think about what life would be like without your regular income, your earning capacity becomes possibly your greatest asset. Chances are, you’ve based the achievement of your goals and ambitions on having a regular cash flow. If you became ill and were unable to work and maintain that cash flow, your goals may no longer be achievable.
Business Overheads Insurance
What would happen to your business if you were too ill or injured to work? Business Overheads Insurance helps you meet your ongoing business expenses by reimbursing eligible business overheads as a monthly amount if you are too ill or injured to work.
Protect your business expenses
Recover with peace of mind knowing that, if you are unable to work due to injury or illness, your business overheads insurance will reimburse your business expenses such as:
- Rent
- Property Rates
- Vehicle leases
- Salaries
East Coast Financial Planning provides wealth protection advice in Broadbeach. Contact us on Phone 07 5530 5242.
Debt Management
- Inefficient debt, and
- Efficient debt
WHAT’S INEFFICIENT DEBT?
Inefficient debt is used to buy goods, services and assets that don’t generate any income. This means you need to rely on your own income sources and assets to repay this debt. Also, the interest cost on this type of debt is not tax deductible. Examples include home loans, credit cards and personal loans. This type of debt can impact other wealth building opportunities. Generally speaking, it is better to reduce this type of debt as quickly as possible and try to repay those charging the highest interest rate first. There are a number ways this can be done, such as consolidating your debts into the loan with the lowest interest rate.
WHAT’S EFFICIENT DEBT?
Efficient debt is used to buy assets with the potential to grow in value and generate an income. They can benefit you in two ways:
- The income from the asset can be used to help repay the loan, and
- The interest cost may be tax deductible, helping to minimise any tax.
This type of loan is often used to help build long-term wealth. Examples include investment property loans, investment loans and business loans.
SHOULD YOU BORROW TO INVEST?
Borrowing to invest (also called gearing) allows you to invest in assets you wouldn’t otherwise have been able to. It can help spread your money across different investment types, which can help reduce risk. This greater exposure gives you the potential to magnify your returns, but can also magnify your losses. If you have built up equity in your home or investment portfolio, you may be able to borrow against this equity.
MARGIN LOANS
Others take out special investment loans – often called margin loans. You can also borrow a lump sum with regular amounts to add to your investment – known as instalment gearing. Since the interest costs are usually tax deductible, gearing can be a tax-effective strategy. With margin loans, lenders allow a maximum gearing level known as the debt to asset ratio (or loan to value ratio – LVR). If markets fall and the value of your investment drops, a margin lender may make a margin call, requiring you to put up more money at short notice to restore the LVR. You might have to offer more security or even sell some of your asset holdings at current prices to bring your gearing down to the right level.
APPROACH
Retirees should consider how comfortable they are taking on more debt or focussing on eliminating their debt. Margin loans should only be considered by investors who are comfortable with an above-average level of risk. As any investment professional will explain, an opportunity should not be considered for its tax effectiveness. It needs to be measured by how strong the underlying asset is, and its potential for growth. Tax-effectiveness is a method which helps improve investment viability – it should not drive the decision.
East Coast Financial Planning provides debt management advice in Broadbeach. Contact us on Phone 02 4342 1888.
Debt Management
Effective debt management is not just about the interest you pay, but also the type of assets you’re investing in and prioritising your debts.
Read More....
Debt Management
- Inefficient debt, and
- Efficient debt
WHAT’S INEFFICIENT DEBT?
Inefficient debt is used to buy goods, services and assets that don’t generate any income. This means you need to rely on your own income sources and assets to repay this debt. Also, the interest cost on this type of debt is not tax deductible. Examples include home loans, credit cards and personal loans. This type of debt can impact other wealth building opportunities. Generally speaking, it is better to reduce this type of debt as quickly as possible and try to repay those charging the highest interest rate first. There are a number ways this can be done, such as consolidating your debts into the loan with the lowest interest rate.
WHAT’S EFFICIENT DEBT?
Efficient debt is used to buy assets with the potential to grow in value and generate an income. They can benefit you in two ways:
- The income from the asset can be used to help repay the loan, and
- The interest cost may be tax deductible, helping to minimise any tax.
This type of loan is often used to help build long-term wealth. Examples include investment property loans, investment loans and business loans.
SHOULD YOU BORROW TO INVEST?
Borrowing to invest (also called gearing) allows you to invest in assets you wouldn’t otherwise have been able to. It can help spread your money across different investment types, which can help reduce risk. This greater exposure gives you the potential to magnify your returns, but can also magnify your losses. If you have built up equity in your home or investment portfolio, you may be able to borrow against this equity.
MARGIN LOANS
Others take out special investment loans – often called margin loans. You can also borrow a lump sum with regular amounts to add to your investment – known as instalment gearing. Since the interest costs are usually tax deductible, gearing can be a tax-effective strategy. With margin loans, lenders allow a maximum gearing level known as the debt to asset ratio (or loan to value ratio – LVR). If markets fall and the value of your investment drops, a margin lender may make a margin call, requiring you to put up more money at short notice to restore the LVR. You might have to offer more security or even sell some of your asset holdings at current prices to bring your gearing down to the right level.
APPROACH
Retirees should consider how comfortable they are taking on more debt or focussing on eliminating their debt. Margin loans should only be considered by investors who are comfortable with an above-average level of risk. As any investment professional will explain, an opportunity should not be considered for its tax effectiveness. It needs to be measured by how strong the underlying asset is, and its potential for growth. Tax-effectiveness is a method which helps improve investment viability – it should not drive the decision.
East Coast Financial Planning provides debt management advice in Broadbeach. Contact us on Phone 02 4342 1888.
SELF MANAGED SUPERANNUATION
What is a Self Managed Super Fund?
Self managed super funds (SMSF) are the largest and one of the fastest growing super segments in Australia. An SMSF is one where you, as a trustee and member, have responsibility over the management, investment and administration of your super fund. SMSFs are quite different from other super funds because they’re run by you, for you and any other members of your SMSF. SMSFs are established for the purpose of building retirement savings. A super fund (except in the case of a single member fund) is an SMSF if all of the following apply:
- the fund has up to four members
- if the trustees of the fund are individuals, each individual trustee is a member
- if the trustee of the fund is a corporation, each director of the corporation is a member
- each member is a trustee of the fund or a director of the corporate trustee of the fund
- no member is an employee of another member, unless they are related and
- no trustee of the fund (or director of a corporate trustee) is paid for services performed in relation to the fund, except in certain limited circumstances.
It is also possible for you to set up your fund with only one member. SMSF structures can be quite simple or complex depending on your needs. There’s a lot to consider, but you can outsource aspects, such as administration, to save you time and free you up to focus on what’s important to you.
What are the benefits of having an SMSF?
The benefits of SMSFs include:
- Greater control over your super, as you make the key decisions and you’re in charge of where you invest your money.
- Flexibility and choice. You construct your fund’s investment strategy and enjoy more investment choice. The choice of investments in SMSFs is far greater than what other super arrangements can offer. You can invest in property, direct shares, cash, term deposits and more.
- Costs. You are in control of what services you require and how much you pay for them.
- Tax advantages. There are potential tax savings in SMSFs depending on your personal circumstances and investment strategy.
- Pool your super with family or other members of the fund, for potential cost savings.
- The potential to borrow to buy a property within your super fund.
- Insurance can be included in your SMSF to protect your income and assets, for example life insurance, total and permanent disability (TPD) and income protection.
- Planning for when you’re not around, by specifying who you want to leave your money to.
What type of investments can you make?
Common types of investments in SMSFs are:
- Shares and other listed securities including exchange traded funds (ETFs).
- Separately managed accounts – where a share portfolio is constructed and managed by a professional investment manager based on your needs.
- Managed funds – covering most asset classes including Australian and international shares, property, alternative assets, fixed interest and cash.
- Term deposits.
- Direct property – including business, residential, commercial and retail property.
- Other assets such as derivatives, unlisted shares and collectables (for example artworks).
Super law doesn’t specify the various types of investments for super funds, however the Superannuation Industry (Supervision) Act 1993 requires trustees to comply with a number of duties and obligations when making investment decisions.
What are your responsibilities as a trustee?
SMSFs give you full involvement in your fund’s operation and the opportunity to make decisions around how your super is managed. However, as an SMSF trustee, you’re also responsible for running the fund in accordance with your fund’s trust deed, as well as super, taxation and corporations law and other general rules such as trust law. You will need to stay on top of your fund’s ongoing compliance requirements including tasks such as fund reporting, record maintenance and monitoring, meeting minutes, statutory obligations, tax, audit and actuarial reporting.
What’s the difference between an individual and corporate trustee?
An SMSF can have either individual trustees or a corporate trustee. In the case of individual trustees, each member of the fund is appointed as a trustee of the fund, while with a corporate trustee, each member of the fund is a director of the corporate trustee. An SMSF may have individual trustees, however a company trustee may be a good option where:
- there is only one fund member
- membership of the fund may change, eg through divorce or children subsequently joining the fund, or
- it’s envisaged that the fund will outlast the original members.
Choosing between an individual or corporate trustee structure may influence the way you manage your fund, so it’s important you choose the option that meets your needs.
What will your SMSF cost?
The costs of setting up and running an SMSF vary depending on, among other things, your circumstances, super balance, investment strategy and how you choose to manage your fund. The more complex you make it, the more it is likely to cost.
What do you need to consider before starting?
There’s a lot to consider before you decide to set up an SMSF. This includes, among other things, your super balance, the number of members joining the fund and their ages, how much time you have to spend on your SMSF, your retirement goals, investment preferences and your risk profile. You generally need someone to help you set up your SMSF. Please contact us for assistance. You generally need to have a reasonable amount of super, or be looking to build up your super quite quickly, to justify the costs of an SMSF. Everyone has a different view of ‘how much’ money is enough to start a SMSF, but as a guide the ATO’s suggests a minimum of $200,000 (that is, if the total balance of all members in the fund equates to $200,000 or more). As an SMSF trustee, it is important that you are aware of and understand the duties, responsibilities and obligations of being a trustee. You will need to ensure that your fund operates in accordance with all applicable laws. You will also need to be aware of and follow the rules set out in your fund’s trust deed. You need to be comfortable making investment decisions around when, where and how to invest or consider working with an adviser to help you. In particular, you should seek advice around borrowing if this is of interest to you. Depending on your circumstances, gearing in your super may not be appropriate. Please contact us before deciding if an SMSF is right for you.
How do you set up an SMSF?
The general process of setting up an SMSF involves creating a trust deed, appointing trustees, completing ATO forms, setting up a bank account, rolling over your super, setting an investment strategy and so on. Please contact us before proceeding.
What happens after you set up an SMSF?
This is when you begin to take control of your super by setting up and implementing your investment strategy. However, on an ongoing basis there’s a lot that needs to be done to maintain your SMSF and keep on top of the administration and compliance. The laws governing SMSFs are complex and can change – you need to ensure you stay on top of regulation changes and compliance. This is where a quality support network is really important. Our administration service can help you with your compliance responsibilities, as well as the day-to-day running of your fund, by keeping track of contributions, assets you purchase, income, expenses to be paid, taxation and other kinds of reporting requirements.
For more information about Self Managed Super Funds (SMSF) contact East Coast Financial Planning on Phone 07 5530 5242, Financial Planners in Broadbeach.
SELF MANAGED SUPER
An SMSF is one where you, as a trustee and member, have responsibility over the management, investment and administration of your super fund.
Read More ....
Self Managed Superannuation
What is a Self Managed Super Fund?
Self managed super funds (SMSF) are the largest and one of the fastest growing super segments in Australia. An SMSF is one where you, as a trustee and member, have responsibility over the management, investment and administration of your super fund. SMSFs are quite different from other super funds because they’re run by you, for you and any other members of your SMSF. SMSFs are established for the purpose of building retirement savings. A super fund (except in the case of a single member fund) is an SMSF if all of the following apply:
- the fund has up to four members
- if the trustees of the fund are individuals, each individual trustee is a member
- if the trustee of the fund is a corporation, each director of the corporation is a member
- each member is a trustee of the fund or a director of the corporate trustee of the fund
- no member is an employee of another member, unless they are related and
- no trustee of the fund (or director of a corporate trustee) is paid for services performed in relation to the fund, except in certain limited circumstances.
It is also possible for you to set up your fund with only one member. SMSF structures can be quite simple or complex depending on your needs. There’s a lot to consider, but you can outsource aspects, such as administration, to save you time and free you up to focus on what’s important to you.
What are the benefits of having an SMSF?
The benefits of SMSFs include:
- Greater control over your super, as you make the key decisions and you’re in charge of where you invest your money.
- Flexibility and choice. You construct your fund’s investment strategy and enjoy more investment choice. The choice of investments in SMSFs is far greater than what other super arrangements can offer. You can invest in property, direct shares, cash, term deposits and more.
- Costs. You are in control of what services you require and how much you pay for them.
- Tax advantages. There are potential tax savings in SMSFs depending on your personal circumstances and investment strategy.
- Pool your super with family or other members of the fund, for potential cost savings.
- The potential to borrow to buy a property within your super fund.
- Insurance can be included in your SMSF to protect your income and assets, for example life insurance, total and permanent disability (TPD) and income protection.
- Planning for when you’re not around, by specifying who you want to leave your money to.
What type of investments can you make?
Common types of investments in SMSFs are:
- Shares and other listed securities including exchange traded funds (ETFs).
- Separately managed accounts – where a share portfolio is constructed and managed by a professional investment manager based on your needs.
- Managed funds – covering most asset classes including Australian and international shares, property, alternative assets, fixed interest and cash.
- Term deposits.
- Direct property – including business, residential, commercial and retail property.
- Other assets such as derivatives, unlisted shares and collectables (for example artworks).
Super law doesn’t specify the various types of investments for super funds, however the Superannuation Industry (Supervision) Act 1993 requires trustees to comply with a number of duties and obligations when making investment decisions.
What are your responsibilities as a trustee?
SMSFs give you full involvement in your fund’s operation and the opportunity to make decisions around how your super is managed. However, as an SMSF trustee, you’re also responsible for running the fund in accordance with your fund’s trust deed, as well as super, taxation and corporations law and other general rules such as trust law. You will need to stay on top of your fund’s ongoing compliance requirements including tasks such as fund reporting, record maintenance and monitoring, meeting minutes, statutory obligations, tax, audit and actuarial reporting.
What’s the difference between an individual and corporate trustee?
An SMSF can have either individual trustees or a corporate trustee. In the case of individual trustees, each member of the fund is appointed as a trustee of the fund, while with a corporate trustee, each member of the fund is a director of the corporate trustee. An SMSF may have individual trustees, however a company trustee may be a good option where:
- there is only one fund member
- membership of the fund may change, eg through divorce or children subsequently joining the fund, or
- it’s envisaged that the fund will outlast the original members.
Choosing between an individual or corporate trustee structure may influence the way you manage your fund, so it’s important you choose the option that meets your needs.
What will your SMSF cost?
The costs of setting up and running an SMSF vary depending on, among other things, your circumstances, super balance, investment strategy and how you choose to manage your fund. The more complex you make it, the more it is likely to cost.
What do you need to consider before starting?
There’s a lot to consider before you decide to set up an SMSF. This includes, among other things, your super balance, the number of members joining the fund and their ages, how much time you have to spend on your SMSF, your retirement goals, investment preferences and your risk profile. You generally need someone to help you set up your SMSF. Please contact us for assistance. You generally need to have a reasonable amount of super, or be looking to build up your super quite quickly, to justify the costs of an SMSF. Everyone has a different view of ‘how much’ money is enough to start a SMSF, but as a guide the ATO’s suggests a minimum of $200,000 (that is, if the total balance of all members in the fund equates to $200,000 or more). As an SMSF trustee, it is important that you are aware of and understand the duties, responsibilities and obligations of being a trustee. You will need to ensure that your fund operates in accordance with all applicable laws. You will also need to be aware of and follow the rules set out in your fund’s trust deed. You need to be comfortable making investment decisions around when, where and how to invest or consider working with an adviser to help you. In particular, you should seek advice around borrowing if this is of interest to you. Depending on your circumstances, gearing in your super may not be appropriate. Please contact us before deciding if an SMSF is right for you.
How do you set up an SMSF?
The general process of setting up an SMSF involves creating a trust deed, appointing trustees, completing ATO forms, setting up a bank account, rolling over your super, setting an investment strategy and so on. Please contact us before proceeding.
What happens after you set up an SMSF?
This is when you begin to take control of your super by setting up and implementing your investment strategy. However, on an ongoing basis there’s a lot that needs to be done to maintain your SMSF and keep on top of the administration and compliance. The laws governing SMSFs are complex and can change – you need to ensure you stay on top of regulation changes and compliance. This is where a quality support network is really important. Our administration service can help you with your compliance responsibilities, as well as the day-to-day running of your fund, by keeping track of contributions, assets you purchase, income, expenses to be paid, taxation and other kinds of reporting requirements.
For more information about Self Managed Super Funds (SMSF) contact East Coast Financial Planning on Phone 07 5530 5242, Financial Planners in Broadbeach.
Estate Planning
PROVIDING FOR FUTURE GENERATIONS
We’d all like to leave a legacy and provide for those closest and dearest to us once we’re gone. Estate planning is an effective method to take an overview of your assets, consider how they’re structured and how you’d like them to be distributed after you die. It’s just as important to provide for yourself as it is for the future.
REVIEWING YOUR WILL
A will sets out how you want your estate to be managed and distributed after your death. It can also include the appointment of a guardian for your children. Without a will, management of your estate can be costly, time consuming and distributed according to state based legislation. It’s important to have a valid will and to review it regularly to make sure it is still in line with your intentions. While they may be effective for simple straight-forward estates, they don’t serve more complex estates as effectively. And a will with even a small flaw may lead to an expensive process if it is contested or it doesn’t have a residue clause which directs how to distribute assets not included in the original will.
GRANTING ENDURING POWER OF ATTORNEY
If you were to become incapable of handling your affairs, control of your assets could revert to a person appointed by a court. It would be more useful if you had an enduring power of attorney set up now so that if you cannot manage your affairs, someone you trust and have chosen to act for you, can make the important decisions affecting you and your affairs.
SELECTING AN EXECUTOR
An executor distributes your assets after your death. This involves applying to the Supreme Court for probate, which gives them permission to execute your will. It can be a difficult job if your will involves setting up trusts and lodging tax returns and you should ensure they are willing and that you have nominated an alternate as a back-up in case they pass away before you do or change their mind. You should consider appointing your solicitor or using a trustee company.
GIVING GUARDIANSHIP
A guardian can make decisions regarding where you live and your medical care if you lose the capacity to make your own decisions. It’s important to select someone you trust as soon as any signs appear that you may need these decisions made for you.
CONSIDERING A FAMILY TRUST
A family trust, also known as a discretionary trust, is a common structure used by small businesses to share the business’ income in the most tax-effective way among beneficiaries within the family group and to protect family assets. It is most useful where the business is generating income and experiencing growth. It involves setting up a trust with a nominated trustee, who has responsibility for distributing the estate to your nominated beneficiaries. It can also be used to protect assets from dependants’ creditors or if a dependant isn’t capable of managing money.
WHAT HAPPENS TO MY SUPER AND INSURANCE WHEN I DIE?
The death benefit is usually paid to your nominated beneficiaries. The superannuation balance is transferred into the Cash option on notification of your death. The balance will be paid depending on who you have nominated as beneficiaries.
WHO CAN BE MY BENEFICIARY?
If you are insuring through your superannuation, you need to understand the difference between binding and non-binding beneficiaries and issues to be aware of. If you have insurance outside of superannuation, you can nominate anyone to be a beneficiary.
PROTECTING WHAT YOU HAVE
The best way to look after your family’s future is to ensure you have enough cover.
To find out more Estate Planning phone East Coast Financial Planning on Phone 02 4342 1888, Financial Advisers in Broadbeach.
Estate Planning
We’d all like to leave a legacy and provide for those closest and dearest to us once we’re gone. Estate Planning ensures your assets are distributed to the right people at the right time.
Read More ....
Estate Planning
PROVIDING FOR FUTURE GENERATIONS
We’d all like to leave a legacy and provide for those closest and dearest to us once we’re gone. Estate planning is an effective method to take an overview of your assets, consider how they’re structured and how you’d like them to be distributed after you die. It’s just as important to provide for yourself as it is for the future.
REVIEWING YOUR WILL
A will sets out how you want your estate to be managed and distributed after your death. It can also include the appointment of a guardian for your children. Without a will, management of your estate can be costly, time consuming and distributed according to state based legislation. It’s important to have a valid will and to review it regularly to make sure it is still in line with your intentions. While they may be effective for simple straight-forward estates, they don’t serve more complex estates as effectively. And a will with even a small flaw may lead to an expensive process if it is contested or it doesn’t have a residue clause which directs how to distribute assets not included in the original will.
GRANTING ENDURING POWER OF ATTORNEY
If you were to become incapable of handling your affairs, control of your assets could revert to a person appointed by a court. It would be more useful if you had an enduring power of attorney set up now so that if you cannot manage your affairs, someone you trust and have chosen to act for you, can make the important decisions affecting you and your affairs.
SELECTING AN EXECUTOR
An executor distributes your assets after your death. This involves applying to the Supreme Court for probate, which gives them permission to execute your will. It can be a difficult job if your will involves setting up trusts and lodging tax returns and you should ensure they are willing and that you have nominated an alternate as a back-up in case they pass away before you do or change their mind. You should consider appointing your solicitor or using a trustee company.
GIVING GUARDIANSHIP
A guardian can make decisions regarding where you live and your medical care if you lose the capacity to make your own decisions. It’s important to select someone you trust as soon as any signs appear that you may need these decisions made for you.
CONSIDERING A FAMILY TRUST
A family trust, also known as a discretionary trust, is a common structure used by small businesses to share the business’ income in the most tax-effective way among beneficiaries within the family group and to protect family assets. It is most useful where the business is generating income and experiencing growth. It involves setting up a trust with a nominated trustee, who has responsibility for distributing the estate to your nominated beneficiaries. It can also be used to protect assets from dependants’ creditors or if a dependant isn’t capable of managing money.
WHAT HAPPENS TO MY SUPER AND INSURANCE WHEN I DIE?
The death benefit is usually paid to your nominated beneficiaries. The superannuation balance is transferred into the Cash option on notification of your death. The balance will be paid depending on who you have nominated as beneficiaries.
WHO CAN BE MY BENEFICIARY?
If you are insuring through your superannuation, you need to understand the difference between binding and non-binding beneficiaries and issues to be aware of. If you have insurance outside of superannuation, you can nominate anyone to be a beneficiary.
PROTECTING WHAT YOU HAVE
The best way to look after your family’s future is to ensure you have enough cover.
To find out more Estate Planning phone East Coast Financial Planning on Phone 02 4342 1888, Financial Advisers in Broadbeach.
Why Choose Us?
Exceptional Personal Service
Our focus is on listening, understanding, and caring about your concerns and providing you with an individual level of service.
Ongoing Support
Our friendly team will support you throughout your journey with us and answer any questions you have along the way.
Knowledge and Experience
Our Financial Advisers are highly qualified and have the knowledge and experience necessary to focus on all your important financial matters.
A Holistic Approach
We want to understand exactly what you want to achieve in life and provide you with strategies to guide you towards your goals.
Keep You On Track
We will keep you accountable along the way because we want you to stay on track to achieve your goals.
Ease and Convenience
Deal with one company for your superannuation, investment, debt management, insurance and estate planning needs.
Justin Smith
Adv. Diploma Financial Planning, Diploma Financial Services (Financial Planning)
Justin commenced his financial services career more than 30 years ago. This has led to a fantastic journey where he now owns and operates his own financial planning practice.
Through Justin’s experience and knowledge, he has a passion to place focus on client strategies and outcomes to help protect and build their lifestyle as they navigate their way through life's planned and unplanned changes.
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