Purchasing property through self managed super funds is a complex and heavily regulated process. A recent article ion News.Com.Au highlights the need for people to receive relevant assistance and advice to avoid the many pitfalls and errors that can impact the process negatively.
Here at TSI we knew this expanding form of property portfolio development would mean we had to be informed and find an affiliate for our clients to work with – that’s how we came to work with Supershift.
With any financial decisions, a full risk assessment must be done to ensure you know exactly what you are getting into – and that is why SuperShift and TSI are there with you every step on the way. This is a simple way to avoid common mistakes in the field.
To read the news.com.au please see below. Click the following links for more information on SMSF or SuperShift.
THE Federal Government’s recent tinkering with superannuation rules continues to undermine the confidence of Australians in using super as their retirement foundation.
Super is the most tax-effective means of building a retirement nest egg. But is it too attractive and can we trust politicians to keep their grubby mitts off it?
We know it’s tempting for politicians to water down the tax concessions to bolster the Federal Budget but if you want the system to work properly, and reduce the cost of future age pension payments, politicians can’t sacrifice long-term confidence for short-term gain.
The reality is retiring rich means starting to plan early and building a separate retirement nest egg on top of superannuation. That retirement plan starts out aggressively for young investors and becomes more safety conscious as retirement approaches.
It’s important to have a strategy that reflects your stage of life. That strategy changes depending on the financial pressures each stage brings.
For example, young investors can take more risk because they have time to recover from corrections. But as you get closer to retirement, the strategy needs to be more conservative because you have fewer investing years to make up for losses.
We think this is the best use of spare cash for the different stages of your financial life. Remember to keep adjusting your options, depending on your changing risk profile.
* Age 25-34
Direct 50 per cent to the mortgage, 20 per cent to superannuation (keeping within contribution limits), 20 per cent to aggressive share investment and 10 per cent to cash reserves.
You have the luxury of being able to take maximum risk. You’re probably not earning much, your retirement investing is small and you have plenty of incentives to forget about it altogether. Don’t.
Making a big dent in mortgage repayments should be the No.1 priority. It is capital gains tax free and not a bad investment performer.
The rest of your savings should be split between superannuation and shares.
* Age 34-44
Put 40 per cent of your spare cash into mortgage payments, 20 per cent to super, 30 per cent to aggressive share/trust investments and 10 per cent into cash reserves.
You’ve still got more than 20 years to retirement, so your risk profile is as good as it was five years ago. But your once-tiny nest egg has begun to grow, so you should move some of your money away into less aggressive share or balanced funds, which can perform just as well but take a lower risk profile.
By this time, you should be getting on top of the mortgage.
* Age 45-55
Pay 40 per cent to super, 10 per cent to aggressive growth shares and funds, 20 per cent to balanced funds, 20 per cent to capital stable funds and 10 per cent to cash reserves.
The next 10 years will tend to be your peak earning years, but you’ve now built such a substantial nest egg that a market catastrophe could leave you without the earning or investing years to make back all you lost. For the first time, safety outweighs growth.
* Age 55-64
Thirty per cent super, 20 per cent balanced funds, 40 per cent capital stable and 10 per cent cash reserves.
You need to know what you’re going to have when retirement comes. Capital stable funds can fluctuate, but you’re a long-term holder, not a speculator. If interest-rate yields fall, at least the fixed-interest investments in the capital stable funds will increase in value. We’ve kept the exposure to the balanced funds but make sure you are with a conservative manager. Invest in a fund that has a higher exposure to fixed interest and blue chip shares.
* Age 65+
Happy retirement. Because you started planning all those years ago, the house is paid off, you have the maximum super payout possible and have built a tidy nest egg of other investments to ensure an enjoyable retirement.
– Contribute, contribute, contribute.
– Take a portfolio approach.
– Don’t be too conservative.
– Focus on consistency rather than timing.
– Pay off the mortgage.
– Protect what you already have.
> INSURANCE: Protect your pet
THESE days you can insure almost anything but whether or not you need it is up to you. The essentials like home and contents, health, car and travel insurance are almost no-brainers.
But deciding whether to fork out for anything else can be tough, especially when it’s for something sentimental like a family pet. Yep, pet insurance has become a big business as we protect man’s best (and expensive) friend.
The RSPCA offers its own insurance cover and even Medibank Private has a pet cover.
Before making a decision, you need to factor in the pet’s age and health to see whether it would be worth it.
If the worst were to happen, and you were to lose that family pet, then would the money really make you feel better? If you have a pet that is constantly in and out of the vet’s office, then it may go a long way to taking some of the pressure off your wallet.
There are plenty of choices, so it’s worth shopping around.
Read more: http://www.news.com.au/money/superannuation/fatten-your-savings-beyond-super/story-e6frfmdi-1226620754149#ixzz2TEvO08lb