On Tuesday 9 May, the Federal Government handed down its Budget for the 2017–18 financial year.

According to Federal Treasurer Scott Morrison, this year’s Budget is founded on the principles of fairness, security and opportunity. Mr Morrison claims that the government’s proposed measures will raise almost $21 billion in revenue over the next four years, returning Australia’s budget to surplus by 2021. Here are some of the key Budget announcements. Note that each of these proposals will only become law if it is passed by Parliament.

Additional non-concessional cap for retiree downsizers
From 1 July 2018, people aged 65+ will be able to contribute up to $300,000 into super from the sale of their principal home, if they’ve owned their home for at least 10 years. The existing restrictions for contributions over age 65 won’t apply for these non-concessional contributions. What this could mean for you You may be able to contribute an additional $300,000 to super (or $600,000 for couples), over and above your existing concessional and non-concessional caps. However, if you or your partner receives the age pension, this could cause your entitlements to be reduced.

Super savings scheme for first home buyers
From 1 July 2017, individuals will be able to make extra voluntary super contributions of up to $15,000 a year beyond their employer’s Super Guarantee payments, up to a total of $30,000. These contributions will be taxed at 15% and can be withdrawn to go towards the deposit on a first home. Withdrawals will be allowed from 1 July 2018.

What this could mean for you
When you withdraw your extra contributions to pay for a deposit, they’ll be taxed at your marginal tax rate minus a 30% tax offset. While the tax concessions for these contributions may allow you to save a larger deposit, you won’t be able to access your money until retirement if you decide not to buy a home.

A 0.5% Medicare levy increase from 2019
From 1 July 2019, the Medicare levy will increase by half a percentage point from 2% to 2.5% of an individual’s taxable income. The Medicare levy low-income thresholds for singles, families, seniors and pensioners will increase from the 2016–17 financial year. What this could mean for you
The increased levy may also result in increases to many tax rates linked to the top personal tax rate, including fringe benefits tax and excess non-concessional contributions tax. Certain lump sum super payments that attract the levy may also be impacted, such as disability benefits paid to people under preservation age.

Extension of the deductibility threshold for small businesses
The government will extend the existing accelerated depreciation allowance for small businesses by 12 months to 30 June 2018.

What this could mean for you
If your small business has aggregated annual turnover below $10 million, you’ll be able to immediately deduct the purchase of eligible assets costing less than $20,000 where they are first used or installed ready for use by 30 June 2018. After that date, the immediate deductibility threshold will revert back to $1,000.

New levy for major banks
A major bank levy will be introduced for authorised deposit-taking institutions (ADIs) with licensed entity liabilities of at least $100 billion (indexed to Gross Domestic Product (GDP)). The levy will equate to an annualised rate of 0.06% – for example, the levy on a bank deposit of $500,000 will be approximately $300 pa. Superannuation funds and insurance companies won’t be subject to the levy.

What this could mean for you
It’s unclear at this stage how the levy will be implemented, and what the impacts might be on clients/customers and shareholders.

Incentives for investment in affordable housing
From 1 January 2018, resident individuals who invest in qualifying affordable housing will be eligible for an increase in the capital gains tax (CGT) discount from 50% to 60%. This increased discount will also apply to eligible Managed Investment Trusts (MITs) as of 1 July 2017.

What this could mean for you
To qualify for the higher discount, your residential property must be rented to low-to-moderate income tenants at a discounted rate and be managed through a registered community housing provider. You also need to hold the investment for at least 3 years. If you invest in an MIT, you’ll be eligible for the 60% discount if the trust invests in affordable housing that is available to be rented for at least 10 years, and you hold the investment for at least 3 years.

Restrictions on deductions for residential property investments
From 1 July 2017, depreciation deductions for residential plant and equipment (e.g. dishwashers and ceiling fans) will be limited to investors who actually incur the outlay – not subsequent owners. Also from that date, investors will be unable to deduct travel expenses related to inspecting, maintaining or collecting rent for a residential rental property.

What this could mean for you
If you’re a subsequent investor in a property, the acquisition of existing plant and equipment will be reflected in the cost base for CGT purposes. Grandfathering applies to plant and equipment that forms part of a residential investment property as at 9 May 2017 and will continue to give rise to depreciation deductions under current rules. The new rule around travel expense deductions applies to all property investors, including SMSFs, family trusts and companies.

Tax changes for foreign tax residents and property owners
Foreign or temporary tax residents will no longer have access to the CGT main residence exemption on properties acquired after 7.30pm AEST on Budget night (9 May 2017). Also from Budget night, foreign owners of residential property that is not occupied or genuinely available on the rental market for at least six months per year will be subject to an annual levy of at least $5,000.

What this could mean for you
If you’re a foreign of temporary tax resident and you held an existing property before Budget night, the property will be grandfathered and you’ll be able to continue claiming the CGT main residence exemption until 30 June 2019. However, from 1 July 2017, the CGT withholding rate that applies to foreign tax residents will increase from 10% to 12.5%.

New thresholds for HELP debt repayments
From 1 July 2018, income thresholds for the repayment of HELP debts will be revised, along with repayment rates and the indexation of repayment thresholds.

What this could mean for you
A new minimum threshold of $42,000 will apply, with a 1% repayment rate. A maximum threshold of $119,882 will apply, with a 10% repayment rate. Currently, the maximum repayment threshold for the 2017–18 financial year is $103,766 with a repayment rate of 8%.

Reinstatement of Pensioner Concession Card entitlements
Pensioners who lost their Pensioner Concession Card entitlement due to the assets test changes on 1 January 2017 will have their card reinstated. Those who lost their entitlement were instead issued with both a Health Care Card and a Commonwealth Seniors Health Card. However these cards provided access to fewer concessions than the Pensioner Concession Card.

What this could mean for you
If your Pensioner Concession Card entitlement is reinstated, you’ll have access to a wider range of concessions than those available with the Health Care Card, such as subsidised hearing services. Your Pensioner Concession Card will be automatically reissued over time with an ongoing income and assets test exemption. You’ll also retain the Commonwealth Seniors Health Card, ensuring you continue to receive the Energy Supplement.

Increased pension residence requirements
An individual currently needs to have at least 10 years’ residence in Australia (at least 5 of which are continuous) to qualify for the age pension or disability support pension. From 1 July 2018, they’ll need to have at least 15 years’ residence in Australia or either a) 10 years’ continuous residence including 5 years during their working life, or b) 10 years’ continuous residence and not in receipt of an activity-tested income support payment for a cumulative period greater than 5 years.

What this could mean for you
This measure may impact you if you have less than 15 years’ residence in Australia or less than 5 years’ residence between age 16 and age pension age. However, existing exemptions will be maintained for humanitarian reasons or if you became unable to work while you were an Australian resident.

Other proposals

• A new Jobseeker Payment will replace 7 existing working age payments from 20 March 2020
• Job seekers and parents who receive working age income support will have increased activity test requirements from 20 September 2018
• The maximum length of the Liquid Assets Waiting Period will increase from 13 weeks to 26 weeks from 20 September 2018
• A one-off Energy Assistance Payment of $75 for single recipients and $125 for couples will be paid for those who qualify on 20 June 2017
• Family Tax Benefit rates will not be indexed for 2 years from 1 July 2017
• A new upper income threshold of $350,000 pa will apply to the child care subsidy from 1 July 2018.

For financial advice tailored towards your personal situation, please call TGFS Financial Planning today on 1300 755 521 or email mailto:trent@tgfsfinancialplanning.com.au

TGFS Financial Planning is an Authorised Representative of Consultum Financial Advisers Pty Ltd. ABN 65 006 373 995 AFSL No 230323 (Consultum). This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own circumstances or seek advice from a financial adviser and seek tax advice from a registered tax agent. Information is current at the date of issue and may change.

Following a turbulent political year globally in 2016 many could have expected 2017 to start sluggishly for the Australian share market. The fallout from Brexit and the US Presidential elections, both surprises to many, promised uncertainty for the value of equities. Instead the positive vibes in the US stock market since the election of Donald Trump has seen a spin off for the All Ordinaries index with the indices increasing from just under 5300 in early November to over 5800 by early March.

So, what does this mean for the 2017 year? After two years of sluggish profit performance on the back of low commodity prices and nervousness over the Chinese economy, the end of 2016 has provided some positive momentum moving forward. Some feel the share market may be getting a little overheated, but with a return to growth in profits, and low interest yields putting a damper on fixed deposit investments, there are plenty of factors that can keep the share market rising.

After a recent decline in values commodity prices began to stabilise in 2016. Optimism in this area however is tempered by the risk that the Chinese economy will pull back from its recent strong levels of growth. The impact of U.S policy on imported goods, one of China’s largest export markets, will cause some nervousness in this area until it’s clear what direction this will take. What may be a driver of increased prices is the new U.S. administration who have highlighted infrastructure spending as an important part of their policy. This may help offset any anticipated drop in demand out of China.

The increased interest in equity investments in the last months of 2016 saw a sell down in bonds and a slight increase in the yields being offered on these. The long-term outlook for interest rate investments continues to be low with the Reserve Bank likely to make their next movement in the official cash rate upwards – but this is not expected any time soon.

Recent increases in property prices in Australia has resulted in a two-tier market, with both Sydney and Melbourne enjoying strong double digit annual growth while other centres have experienced more subdued results, and Western Australia a decline. Fears of overheating have been offset by a further drop in the official cash rate in 2016 and the likelihood that this will not move much in 2017. Major lenders have however been making some of their mortgage decisions independent on the Reserve Banks direction with the cost of offshore funds driving up their need to increase the mortgage rates on offer. Smaller centres like Hobart, Canberra and Adelaide may enjoy some of the best growth prospects during 2017.

As always, predicting the market comes with its fair share of uncertainty. It seems unlikely that 2017 will experience the level of political turmoil seen last year. The markets absorbed both Brexit and the U.S. elections reasonably well – but with the U.K yet to leave the European Union, a process that will take some time, and the effect of the Trump administration yet to fully take effect, both these issues may yet play a significant part in market movements in the future.

For financial advice tailored towards your personal situation, please call TGFS Financial Planning today on 1300 755 521 or email trent@tgfsfinancialplanning.com.au

TGFS Financial Planning is an Authorised Representative of Consultum Financial Advisers Pty Ltd. ABN 65 006 373 995 AFSL No 230323 (Consultum).This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own circumstances or seek advice from a financial adviser and seek tax advice from a registered tax agent. Information is current at the date of issue and may change.

Social media and town squares across America have already seen the reactive opinions to his rhetoric and actions, but the often-unreported response to his Presidency has come where it most affects the hip pockets of everyday investors. Since the election in November it’s been interesting to note the reaction of financial markets to his pending Presidency. At the end of January, the Dow Jones Industrial Average, the most commonly cited measurement of stock prices and hence investor confidence in the U.S, passed through the 20,000-point mark for the first time. By comparison the index sat at 17888 on November 7th, the day before the election. That’s an increase of almost 12% in just under 80 days, or around 50 points on average each day of trading. There aren’t many investors who will be unhappy about that.

Australian share markets have benefitted from the positive reaction across the Pacific. From a low of 5238 on election day the All Ordinaries index has climbed to a high of 5857 before reducing to 5655 on February 6th. Despite the recent drop the index is still tracking at 417 points or 8% higher in the last couple of months.

Prior to the election many pundits were predicting a negative impact for the economy should a Trump Presidency come into effect. Instead financial markets have embraced his arrival. So, where has the change in mood come from? When you look at the facts it’s not hard to see why.

Trump has been a very successful businessman – he is pro-business and in favor of bringing jobs and money back to America with a series of tariffs planned for introduction, a move to lower tax rates and a desire to deregulate many areas of industry. Businesses see him as a catalyst and that’s good news for investors. He intends to spend a considerable amount on improving the U.S. infrastructure and his reluctance to support environmental issues, criticized by many, will be seen as a cost reducer for many industries forced to pay large sums in compliance costs.His initial presidential actions, including the signing off on two previously mothballed pipeline projects, has seen confidence increase as he shows a willingness to follow through on his pre-campaign promises.

All potentially good news for US stocks but is this a positive for Australia? There’s little doubt that Australian market sentiment for shares follows that of the United States. If their share market rises so does ours. His plans to deregulate financial markets could be a plus for Australian financial institutions exposed to US earnings.There is some thought that the proposed infrastructure spend could be a positive catalyst for our mining industry although it is uncertain to what extent this will impact. Australia will not suffer from tariff controls as much as other U.S. trading partners such as Mexico and China, and although the Trans Pacific Partnership Agreement has been torn up this was to some expected regardless of who won the election.

The US dollar has painted a slightly different picture. After declining nearly 3 cents against the $US since the election the AUD has seen a steady increase since the end of December from a low of $0.7175 on December 24th to a current level of $0.7674 on February 4th. This has largely restored much of the losses sustained since the election result and reflects increased confidence in the economy and its performance plus a settling in of the understanding of Trump policies.

So, will the share market rally continue? The continued growth of the U.S. economy has many believing that it will but others aren’t so sure. President Trump has shown a willingness to push the boundaries of his authority and the risk of a backlash from many quarters creates uncertainty. If there is one thing investors don’t like it’s uncertainty. If Trump faces opposition from the courts or Congress to many of his measures it may see a market cooling, which will affect the share market performance in this country.

It’s always difficult to predict the vagaries of the market in any situation – with a new U.S.President determined to shake up the status quo and test the boundaries of the Constitution, the predictability of the market place becomes even more of a lottery – and what that will mean for Australia is anyone’s guess.

For financial advice tailored towards your personal situation, please call TGFS Financial Planning today on 1300 755 521 or email trent@tgfsfinancialplanning.com.au

TGFS Financial Planning is an Authorised Representative of Consultum Financial Advisers Pty Ltd. ABN 65 006 373 995 AFSL No 230323 (Consultum).This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own circumstances or seek advice from a financial adviser and seek tax advice from a registered tax agent. Information is current at the date of issue and may change.

Don’t be overwhelmed. Despite the impact there are steps you can take to get things back under control. Here’s our suggested list of the top seven things that can help tighten the budget and bring your credit cards back under control again.

1. Revisit your budget. The sooner you can get your debt levels down the sooner you can breathe easy. Now is an ideal time to revisit your monthly budget and spending habits and see what money you can commit to debt repayment. If you have current commitments such as Foxtel which you don’t use, or a gym membership you never get around to, that’s money you can put towards the debt repayment pot.


2. Consider switching your credit card. Banks are forever offering sweet deals to switch credit cards and reduce your interest charges. Free interest periods can buy you the time to get the debt back under control and avoid those expensive interest rates. Be aware however of the impact that cancelling and opening cards may have on your credit score.


3. Sell up what you don’t need. Everyone has a garage or closet full of stuff that’s never been used or outlived its useful period. These items may not be worth a lot individually but collectively can go a long way to paying off your debts. Now is the time for a stock take. Consider a garage sale, a car boot sale or listing them on Gumtree.


4. Stop using your card (at least for a while). The first step is to make sure you don’t make things worse. Put your credit card away for a while, at least until you’ve brought the debts back under control. Adding to your debtthrough retail therapy may make you feel better when you do it but only compounds the situation long term.


5. Prepare to avoid the same problem next year. They say prevention is better than cure. Now is the most effective time to make sure the same problem doesn’t happen next time. Set up a separate bank account where you can deposit a set amount regularly for this years Christmas spend – as little as $20 per week can be enough. Chances are you won’t miss it. When the time comes to fork out for those December bills later this year you will feel a whole lot better paying in cash.


6. Get rid of the highest interest rate debt first. The debt that will be killing you the most will be the one with the highest interest. Make sure you focus your surplus funds on getting this paid off ahead of the rest.


7. Bank any December bonuses. If the boss has been generous, or your tax refund from last year has just come through it can be tempting to treat this windfall as a chance for some free spending. Think twice. This could be the boost you need to get that debt paid off and back under control.

The important thing is to take action. Ignoring your increase in debt is no solution and, with high interest rates on credit card debt, will only make your situation worse. Work through the process step by step and you will begin to feel in control of your situation once more.

For financial advice tailored towards your personal situation, please call TGFS Financial Planning today on 1300 755 521 or email trent@tgfsfinancialplanning.com.au

TGFS Financial Planning is an Authorised Representative of Consultum Financial Advisers Pty Ltd. ABN 65 006 373 995 AFSL No 230323 (Consultum).

This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own circumstances or seek advice from a financial adviser and seek tax advice from a registered tax agent. Information is current at the date of issue and may change.

Although this is a time of celebration, for many Christmas creates a lot of stress, most of it financial. Having young children can only add to it as it becomes difficult to say no to those you love the most. Add in some last-minute work deadlines and it’s easy to see why many find it their least favourite time of the year. Many of these problems can be prevented however with some careful planning on what you spend leading up to Christmas. Here’s our suggested hints on how you can make this period of the year a much more relaxing event.

Set a budget. The biggest issue at this time of year is overspending, but you don’t know you’ve overspent if you don’t even know how much you want to spend in the first place. The starting point is a good budget. Here’s how to break it down into the four key categories

• Pre-Christmas and New Year parties/eating out/drinking
• Gifts
• Christmas dinner
• Holidays/transport

Once you’ve determined how much money you have to spend this December, allocate it across the four categories according to your priorities. If you’re not planning on heading away anywhere then your holiday budget can be zero leaving more for each of your others categories. Divide your money up based on how many people you have to buy for, how often you plan to go out and so on, and see if you have a reasonable amount available for each. Breaking it down like this can allow you to set a budget per person for gifts and an amount to take to each dinner or drinks.

Pay cash where possible. One of the best ways to not overspend is to take the money out of your account and not use a credit or debit card. Spending $50 on your sister? Leave your cards at home, take the cash to the store and you can only spend what you have in your pocket.

Eliminate some presents. One of the traditions of Christmas is to keep giving gifts to people you feel obligated to buy for. Guess what? They probably feel the same. Do you swap meaningless clutter with your neighbours, second cousin, or send a gift card to Aunty Joan who you haven’t seen in three years? Reach an agreement that you aren’t going to continue.

Ditch Christmas cards. If you’re still hanging on to this tradition, it’s time it went! With postage now more expensive it’s not worth the cost or hassle. Send an e-card instead.

Create a Christmas account. You may be a little late for this year, but once January rolls around discipline yourself to create an account and, based on the budget you set for this year, allocate some of each week’s pay to your account during the year. By the time Christmas arrives next year the money will be sitting ready for you.

Avoid impulse spending. Don’t buy anything the first time you see it. Marketing is full of “limited time offers”. Walk away and if you still want it the next day maybe, just maybe, it’s meant to be.

Pick up some post Xmas bargains. Along with establishing your Christmas account new year/January can be a great time to pick up some Christmas presents for next year at a heavy discount on pre-Christmas prices.

Mind the food budget. One of the biggest areas of overspending is food. Statistics on Christmas food consumption show nearly $1 billion in Christmas food is thrown away in Australia next year, that’s roughly $45 for every person in your household. A family of four represents nearly $200 of wasted food.

These 8 steps will help you negotiate the mine field of Christmas temptations in front of you and hopefully make this Christmas even more merry than usual. For more specific help don’t hesitate to contact us.

If you’ve spent any amount of time as an investor you will have been exposed to the highs and lows that financial markets can create. Often the markets appear quite logical whereas at other time there appears to be no rhyme or reason for their behavior. Mastering the markets has been an elusive goal for investors for centuries – even geniuses such as Sir Isaac Newton have fallen foul of market volatility, losing a significant sum of money during the South Sea Bubble crash of the 18^th century.

To this day pundits claim to be able to predict market movements yet few have success in doing so. Those who have taken a long-term approach to their investments, ignoring short term market movements, have shown this approach to be the more successful.

You can’t avoid market volatility – but you can manage its downside to your advantage and at least minimise the risks you face. Here’s our suggestion on some strategies that will help you in the long term.

• Don’t try and second guess the markets. There are too many factors affecting share prices to believe you can second guess short term price movements. Taking a long-term attitude to the fundamentals of a company will normally yield you the most secure return. Since 1900 the Dow Jones industrial average has increased from less than 100 to over 18000 – an annual growth rate of 10.4% per annum on average. That’s despite living through one of the most turbulent centuries in history with two world wars, a major depression and an arms race that threatened to end mankind.Of course some decades had little to no growth but the overall result has been positive for investors.
• Consider dollar cost averaging. This is where you use any decline in prices as an opportunity to purchase more stock, lowering the average price you have paid for the ones you hold. For many the natural reaction to a declining market is to sell but by then the damage has been done. Adopting Warren Buffett’s approach of purchasing when the market is “on sale” can be a more lucrative opportunity to improve your long-term gains.
• Keep a balanced portfolio. Having all your eggs in one basket, or just a couple of baskets, is a recipe for disaster. Balancing your risk is the safest option to protect your equity and will minimise any drop in one sector of the market. How your portfolio is made up will be dependent on your stage of life and whether you are seeking income or growth from your investments.
• Have someone else manage your fund. The risk of managing your own investments is that it becomes easy to be emotionally involved. Leaving your portfolio in the hands of a sound financial advisor will see you resisting the urge to tamper with your portfolio or make decisions based on an emotional reaction.

Market volatility can be nerve wracking to deal with but managing it well could create opportunities where others are fearful and provide you with the chance to increase your long term return from your investments. Talk to our expert team today to discuss how your portfolio can be protected against fluctuations.

Check to make sure you are eligible. Access this link to find all Information you need to know about your claim for Age Pension and Pension Bonus in the booklet provided.

Age pension benefits are available to eligible applicants who have reached the age pension age, which is 65 years old at present. Starting 1 July 2017 the age pension age increases incrementally until reaching 67 on 1 July 2023. The following table illustrates the increases in age:

The age pension is subject to both the Centrelink income and asset tests.

When you become eligible, apply as soon as possible. The sooner you do, the sooner your payment will start. Have the following information ready for you and your spouse or partner:

• Bank account information as well as your BSB number
• Tax file number
• Residence information, including, if applicable, the date you became an Australian citizen, along with visa information and the dates you lived in other countries

You should also have the following information available:

• Assets and income
• Your shares
• Your financial and superannuation shares
• Your income streams
• All real estate assets you own

You can apply for Age Pension online or by means of a claim form. Starting early in 2016, you can access your Centrelink online account only on myGov. Just go to Start using myGov now

If you have an online Centrelink account

Log onto it using your Customer Access Number (CAN) and password. To start your claim select Apply for a Payment and then Make a Claim.

If you don’t have an online Centrelink account

If you don’t have an account but do have a Customer Reference Number (CRN) you can go ahead and register. If you don’t have a CRN go to your nearest service centre to use your identity documents to obtain a CRN.

If you cannot claim online

In that case call 132 300 or visit the nearest service centre to obtain a personalized claim form and register an intent to claim. That will enable you to start getting paid at the earliest date possible.

The myGov staff will ask you some questions to ascertain your circumstances and personalize your claim form. You can simplify the process by contacting them first.

As an alternative to this process you can print and fill out the Age Pension and Pension Bonus form and the income and assets form.

Supporting Documentation

Be prepared to fill out some additional forms, based on your specific circumstances, to substantiate your claim. Except for identity documents you may submit most supporting documentation online or use your Express Plus mobile app. If you haven’t already confirmed your identity with myGov you will need to visit a nearby service centre to submit your confirmation of identity documents.

If you cannot return these within 14 days, request more time.

Submit Your Claim

If, like most people, you want direct payment of your funds into your bank account be sure to provide your bank details when you submit your claim.

Remember that you always have recourse to an appeal. For details check out reviews and appeals.

For financial advice tailored towards your personal situation, please call TGFS Financial Planning today on 1300 755 521 or email trent@tgfsfinancialplanning.com.au

TGFS Financial Planning is an Authorised Representative of Consultum Financial Advisers Pty Ltd. ABN 65 006 373 995 AFSL No 230323 (Consultum).

This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own circumstances or seek advice from a financial adviser and seek tax advice from a registered tax agent. Information is current at the date of issue and may change.

Everyone has their own ways of spending money that ranges from buying much-needed necessities to purchasing luxury items. While some of us are great at saving, others, not so much. From contributing to your super account to receiving age pension, retirement can be, well, tiring when you don’t know what you’re doing. This guide will help get you on the right track to retirement to ensure you make the big step at the right time without struggling with money in the long run.

How Much Does A Retiree Need Annually?

For singles around the age of 65, ASFA finds that a minimum of $23,695 annually is ideal with a bit of wiggle room for extra spending and that $42,962 provides for a more comfortable lifestyle. As for couples, $34,090 is needed each year for modest living or approximately $58,915 for those who aim for a more adequate lifestyle [1].

By the age of 85, singles will need an approximate $23,062 for modest living or $38,460 for comfortable living whereas couples typically need $34,257 for modesty or $53,937 for comfort, as also found by ASFA [2].

ASFA considers a comfortable living style to be one that includes private health, occasional travel, moderate spending on luxury items, and eating out once or twice per week whereas a modest lifestyle would include about half as much luxury spending. ASFA, though, does put into consideration that both a modest and a comfortable lifestyle should include good health and home ownership, which are already incorporated into the statistics above.

How Much Does One Receive From Age Pension?

Updated as of January 2016, full age pension for both singles and for couples separated due to bad health can expect to receive a total of approximately $20,498 annually, just enough for a semi-modest lifestyle of living. For couples, though, age pension is around $30,903 for the two combined and again is about sufficient for a modest lifestyle throughout retirement [3].

Keep in mind, though, that age pension depends on a variety of different factors, including income that may increase or decrease your overall amount of age pension. Listed above is the maximum expectancy for age pension, but never assume you’ll receive that very amount.

Are You On The Right Track To Retiring?

As you may or may not know, the retirement gap is the gap between where you currently stand with your retirement savings and the actual savings you need for a comfortable style of living once you do retire. You may now be wondering whether or not you’ll have enough savings in your super account to make the commitment to retiring, but it’s quite simple once you understand just how important it is to make the right contribution levels to your super.

According to a recent Intergenerational Report (IGR) from the Government, those aged 60 or older had a median super account balance of $95,000 in 2011/12, an amount much too low for retirement, though many of which were expected to receive retirement support through age pension once they reach the age requirement. Seeing this statistic should open your eyes to the true reality of retirement: Not everyone is prepared, but they should be.

Both the IGR and ASFA suggest contributing as much to your super account as possible to ensure a successful retirement. After all, your super account as well as any entitlement to Age Pension is what you’ll be needing to get by day by day on once retired. According to the table below provided by ASFA, one who has an income of $50,000 will end up adding over $50,000 in their super account over the course of 30 years when making 12 percent contributions, versus 9.5 percent [4].

In general, it’s quite important to know whether or not you’re on the right track to retirement. Remember, it’s never too late to start or to increase you level of contributions to your super. Every drop counts.

How Much Should You Be Contributing?

Your level of contributions are dependent on your current income and when you plan on retiring, and your desired lifestyle in retirement. You can find various calculators online to predict whether or not you’re ready for retirement and to figure out whether you’re making contributions large enough to your super account to retire. One calculator called the Retirement Goal Calculator will tell you how much you should save monthly and annually to reach your retirement goal. It’s a good idea to take use of these calculators to help predict where you stand today and if and when you’ll be ready for retirement moneywise.

Please give us a call on 1300 755 521 or email trent@tgfsfinancialplanning.com.au for financial advice regarding your retirement. We’re happy to assist you along the way and give you any additional information you may need to make your retirement a successful one.

TGFS Financial Planning is an Authorised Representative of Consultum Financial Advisers Pty Ltd. ABN 65 006 373 995 AFSL No 230323 (Consultum).

This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own circumstances or seek advice from a financial adviser and seek tax advice from a registered tax agent. Information is current at the date of issue and may change.

[1]ASFA Retirement Standard (September 2015)
[2]Ibid
[3]Australian Department of Human Services
[4]ASFA November 2014: The future of Australia’s super – a new framework for a better system


]]> https://www.tgfsfinancialplanning.com.au/saving-for-retirement-how-much-will-you-need/feed/ 0 https://www.tgfsfinancialplanning.com.au/get-on-top-of-your-finances-in-your-50s/ https://www.tgfsfinancialplanning.com.au/get-on-top-of-your-finances-in-your-50s/#comments Wed, 03 Feb 2016 00:56:47 +0000 http://172.16.25.10/tgfs/?p=436 Continue reading Get On Top Of Your Finances In Your 50s]]> When you’re in your 50s life is a complete change from your earlier years. You may have already paid off your mortgage and have even more spare cash now that the kids have moved out and aren’t as dependent on you. Your career has had long enough to evolve to what you want it to be, both from a financial and rewards point of view. So what is the next step for you and your finances?

There are a couple of aspects that you’ll want to consider at this time of your life. Retirement is not a long way off, so it’s time to decide how you want to spend those years and how you’re going to plan for them.

Be In Charge Of Your Lifestyle

Many of us have to lead a reactionary lifestyle for most of our working lives. We have to work hard to afford mortgage payments, plan for our partner staying at home with a young family, and react to work pressures which the ups and downs of the economy invariably throw at us.

In your 50s it’s likely that you’ve got a little more financial freedom than you had in your youth, so you and your family can plan for your future. What do you want out of life now? Are you happy in your new home or would you like to move to a new one? Would downsizing improve your position and your finances? There are many different options available to you, so once you know exactly what your financial situation is you can start making your dreams come true!

How Much Money Do You Have Available To You?

Once you have an idea of which track you want to take, you will need to set up the necessary plans to achieve your goals. Firstly, look at these financial aspects so that you’re ware of exactly what money will be available to you.

• Superannuation – Is your super invested in the most effective way? Look at adding more contributions now that you have more spare cash, and speak to a professional regarding your super fund’s investments. Remember, you can change your investment options at any time, so ensure that they aren’t outdated or in a poorly-performing investment.
• Other investments – It’s likely that you’ve invested elsewhere throughout the years, through managed accounts, shares and real estate. Ensure that your portfolio is up to date and that your money is invested wisely. Again, speak to a professional to see if there are any better options for your investments. You may also decide that this is the best time to sell your real estate, if you get a good return on it, so that you can benefit from a lump sum to boost your financial freedom.
• Insurance – Which insurances do you have? Is your life and income insurance at the most appropriate level for your circumstances? Many older people fall into the trap of having too high a level of insurance for their circumstances. Check your policy and update or change it if necessary. Ensure that your family is covered financially should the worst happen so that you can look forward to your retirement with the peace of mind knowing that you’ve done the best for them.
• Day-to-day spending – It’s important to regularly check your pending, regardless of your age. Now that you’re looking forward to your retirement this is even more important. Look at any things that you’re spending extra money on that you don’t necessarily need so that you can focus on buying the things you want.

Planning For Your Retirement

Once you’ve looked closely at your finances, you may find that you haven’t got as big a nest egg as you thought. There’s no need to panic – many people find themselves in this situation, and it’s never too late to make amends. There are several things you can do to boost your savings.

At this time of your life you’re probably earning more than you have at any other time. Use this extra money to add to your super fund or put some money away in a term deposit. This is an ideal way of getting extra interest on your cash, as a term deposit (or TD) is low-risk, and you simply leave a lump sum in the bank for a fixed amount of time with a fixed interest rate.

Pre-retirees are also eligible for assistance from the government in the form of a Transition to Retirement strategy, or a TTR. This is available to the over 55s, and allows you to withdraw some of your pension while you’re still in employment. There is also a salary-sacrificing scheme in place, in which any contributions up to $35,000 are taxed at just 15%. To find out more about these, visit the Australian Taxation Office’s website, www.ato.gov.au.

Although most people in their 50s find that they are earning more money than they have done before, everyone’s circumstances are different and there are many who still struggle financially leading up to their retirement years. If you’re one of these people, there are schemes available which can help you to boost your finances. For example, if you’re on a low- to middle-level wage you may be eligible to receive a co-contribution from the government for your super. This scheme means that, for every $1.00 you contribute to your super (up to $500), the government will contribute $0.50.

You’re Not Alone

Everyone in their 50s needs to look forward to their retirement years, whether they’ve got grand plans (such as that vacation you’ve had your heart set on for years) or they’re just looking forward to relaxing and enjoying more time with their friends and family. Take the time to speak to people who are in the same situation as you, and see how they’ve planned for their retirement. They may have had some good ideas that you haven’t considered.

Also, there is plenty of professional help available. You may wish to speak to solicitors, tax professionals or financial advisors to see what the best options are for you. Whatever you decide to do, getting your finances in check before you retire will allow you to enjoy the time and money that you’ve worked so hard to earn.

For financial advice tailored towards your personal situation, please call TGFS Financial Planning today on 1300 755 521 or email trent@tgfsfinancialplanning.com.au

TGFS Financial Planning is an Authorised Representative of Consultum Financial Advisers Pty Ltd. ABN 65 006 373 995 AFSL No 230323 (Consultum).

This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own circumstances or seek advice from a financial adviser and seek tax advice from a registered tax agent. Information is current at the date of issue and may change.