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Good Financial Decisions Will Reap Rewards

The financial decisions your clients make now could have an impact on their lifestyle in the future. As retirement gets closer, the choices they make now could determine the kind of lifestyle they'll have once they stop working.

If you expect to keep working for years or even decades, planning for retirement may be the last thing on their mind. But retirement is a long-term goal that they need to think through carefully. For starters, they should have a clear idea of the kind of lifestyle they want when they leave the workforce, so they can follow a strategy that will help them achieve it.

With rules, around super about to change from 1 July 2017, these changes might affect your retirement plans.

What should you should be thinking about?

1. Get a strong financial foundation

Put together a realistic budget so you can keep up with their regular expenses while at the same time putting money aside for a rainy day.

2. How do I invest in my future?

When do you plan to retire? What kind of retirement lifestyle do you want?

If retirement is still miles away, you may need a long-term growth strategy which includes informed decisions about market volatility and warnings regarding impulse decisions such as switching investments unnecessarily or trying to time the market.

3. How do I protect what matters?

While building your wealth for the future, you will want to help secure that wealth. That's why it's important to protect not only assets, but also your ability to earn an income. You may need help on the types of insurance that best fit your needs, lifestyle and budget. For example, by taking out income protection insurance, you receive regular payments if you are sick or injured and can't work for an extended period. And then there's life insurance, which helps ensure your loved ones will be looked after financially if you die or become permanently disabled.

4. How can I boost my super?

An effective way to build retirement savings is to arrange with your employer to swap some of their salary for extra employer super contributions. This is known as salary sacrificing. Pre-tax super contributions - which include employer's compulsory contributions and any salary sacrifice contributions they arrange - are also called 'concessional contributions'. Currently you can make $30,000 worth of these contributions a year (before extra tax applies) if they're under 50, but this will go down to $25,000 a year from 1 July 2017.

5. Help your spouse

If you are paying off a mortgage or raising a family, keeping up with day-to-day expenses can be challenging enough without having to focus on their retirement savings. But the good news is, if you have a partner they might be able to get a helping hand from the government to grow their nest egg depending on their partner's income.

Let's say your client is working full time, but their partner is only working part time while their children are little. If your spouse is earning less than $13,800 a year (or less than $40,000 a year from 1 July 2017), any money they put into their super account will earn them a tax offset up to a maximum of $540. What's more, if your spouse earns under $37,000, and pre-tax contributions are made to their super (eg, employer contributions), they may receive a contribution of up to $500 from the government into their super.

For more information on any on these or related matters please call us 1300 861 143.


This information is current as at 30/05/17. This article has been prepared by Heart1Stop, a social media brand owned by Heart Mortgage Services and Heart Financial Advisers. The information contained in this article is an overview or summary only and it should not be considered a comprehensive statement on any matter nor relied upon as such. The views expressed here are not those of Heart1stop, Heart Mortgage Services, Heart Financial Advisers, shareholders, directors or staff and associated contractors and business associates. This article has been prepared without taking into account any person’s objectives, financial situation or needs. Because of this, you should, before acting on any information contained in this article, consider its appropriateness, having regard to your objectives, financial situation or needs. Any taxation information contained in this article is a general statement and should only be used as a guide. It does not constitute taxation advice and is based on current laws and their interpretation. Each individual’s situation may differ, and you should seek independent professional taxation advice on any taxation matters. While the information contained in this article may contain or be based on information obtained from sources believed to be reliable, it may not have been independently verified. Where information contained in this publication contains material provided directly by third parties it is given in good faith and has been derived from sources believed to be accurate at its issue date. It is not the intention of Heart1Stop or Heart Mortgage Services and Heart Financial Advisers that this publication be used as the primary source of readers’ information but as an adjunct to their own resources and training. To the maximum extent permitted by law: no guarantee, representation or warranty is given that any information or advice in this publication is complete, accurate, up to date or fit for any purpose; and no party of Heart1Stop or associated entities as mentioned is in any way liable to you (including for negligence) in respect of any reliance upon such information. This article may also contain links to websites operated by third parties ("Third Parties") who are not related to Heart1Stop. These links are provided for convenience only and do not represent any endorsement or approval by us.

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