Tag Archives: Planning

Get Retirement Ready!

Planning is key… and so is getting advice!

Avoiding pinching pennies in retirement because you haven’t saved enough means serious planning.

First, figure out how much you’ll need!

Find out how much income you will need by answering a few simple questions:

  • What are your perosnal retirement goals?  Do they include climbing mountains, lawn bowls, sky-diving or spoiling the grandkids?
  • What kind of lifestyle do you want?  Are you quite frugal or want to live it up?
  • What is your life expectancy?  Do you have good genes and are likely to outlast your cronies?  Or have you lived a little harder than most and might not see the great-grandkids arrive?

While it’s relatively easy to set goals and have some lifestyle expectations for retirement, estimating how long you’ll live can be tricky, but is crucial to your retirement decisions. It can help decide your own asset allocation or when to stop working to ensure you have enough funds for your retirement.

Although there are tools and calculators you can use for working out life expectancy, your financial adviser can help guide you through the process too. Your adviser can also help you come up with an estimate of your required retirement income based on your lifestyle expectations, risk profile and life expectancy.

Second, ensure you’ll have enough income!

With an estimate of how much you’ll personally need, your adviser can make recommendations to help you meet your required retirement income. These strategies may include transition to retirement or contribution strategies, growing your retirement fund by investing some or all of it or even growing wealth outside of superannuation.

Most investment products carry some sort of risk, so it’s important to choose ones that suit your risk appetite and need for returns.

If you want a regular flow of income in your retirement, there are options available for you, as well as ensuring you won’t outlive your funds.

Always seek professional advice and how you can get appropriate outcomes for you.  And of course, I’d love to help!

Create a great financial new year

New Year’s resolutions are easy to make but often hard to keep. But there are real benefits to making financial resolutions. Here are some helpful suggestions to get you started.

Chances are by now, you’ve forgotten what you wanted to achieve last New Year’s Eve, but a new financial year is also a great time to reset.

Get back to basics

If you find it near-impossible to reach your financial goals, you may need to revisit the basics: sticking to a budget. Does temptation usually unravel all your good saving intentions? Consider opening a locked savings account that you can’t deduct money from for a period of time, and automatically transfer funds into it each payday.  Automating everything in your life that can be is truly a gift!

Plan for large purchases

Whether you need a new fridge or are considering placing a deposit on a home, the earlier you start planning for these purchases, the more manageable they become.

If you know you’ll need a new item in 6 months that costs $1,000,  that means you need to set aside around $40 per week to make it happen… that’s a few sneaky coffees that may need to go!

Set up an investment plan

If you’re considering investing this year (instead of someday,) developing a sound investment plan is essential for your success. This may include working with your financial adviser to identify clear financial targets, calculate how much you can afford to invest and determine how much risk you’re willing to take on. 

If you’d like to have a small nest egg before you sit down with someone, again, automate the process so every week you’re setting aside an amount to put towards that portfolio.  Everyone started somewhere!

Review insurance policies

Knowing you are properly insured provides peace of mind if your circumstances change unexpectedly. But identifying appropriate insurance policies and levels of coverage for your unique situation can be difficult – and getting it wrong is risky… as you’ll likely find at claim time. This is why it’s important to regularly review your insurance policies with your financial adviser, especially if your situation changes.

You may be able to find that funding via various structures frees up cash flow to invest in personal insurances you may not have otherwise been able to afford.  Good advice is worth every cent!

Check your super

If you have multiple superannuation accounts – or have forgotten where your super is – you’re not alone. According to the Australian Taxation Office, there’s $18 billion of lost super waiting to be claimed nationally.1

Effectively managing your super is vital for building your retirement nest egg. Contact your financial adviser who may help you manage your super.  It’s also worth seeing what insurances are covered in your fund so you aren’t paying extra for cover you don’t need.

Set retirement goals

The earlier you set clear goals for your retirement, the more options you’ll have. Work out what assets you have – from your home to superannuation – and review your current spending patterns, then determine your goals for retirement and what lifestyle you’d like to enjoy. This will help you calculate how much you’ll need.

Remember, we’re now living a lot longer, which means our money may now need to last 30 years in retirement, or we may choose to work longer.  Our health is also an issue that needs consideration as we age and this too will impact our retirement years.

Create an estate plan

Estate planning involves more than writing a will. It outlines what you want done with your documents, contacts, debts, bills and assets, making the process easier for your beneficiaries after you’ve passed away.

Whatever your financial New Financial Years’ resolution may be, seeking professional advice may help you make it reality this year.

 

Note:
1 The Sydney Morning Herald, 2017, ‘Almost $18b in lost super waiting to be claimed’. Accessible at:

http://www.smh.com.au/money/super-and-funds/tax-office-holds-records-of-almost-18-billion-in-lost-super-20170920-gylo3z.html

A money-wise wedding

Creating a budget for the big day

Whether you’re planning a large, luxurious, lavish and luscious wedding or a small, intimate affair, smart budgeting could help free you from financial worries, so you can enjoy your special day even more.

Following these steps may help ensure no one’s worried about debt on the honeymoon.  And remember, even if you only plan on doing the walk down the aisle once, it’s just a day… and the rest of your life is what it’s all about.

Starting with massive debt and stress about money is a less than ideal way to continue your life together.

1. Plan early

Given that the average (is there such a thing?) Australian wedding costs $36,200[1], the sooner you start saving, the sooner your dream wedding can become a reality.  (I hope your parents are all over this stat!)

The day after the engagement is fine… tho some do start even before that… like while you’re watching the latest episode of Batchelor in Paradise and dreaming about finding Mr or Mrs Right.

2. Create a budget

Take stock of your income and calculate the maximum you can afford to spend on the wedding – and your ideal cost scenario. Will your parents be pitching in and what can you expect from them?

Knowing what you can spend in each area means that you’re all over it when negotiating with suppliers.  If you don’t have room to move, you can play hard-ball or find someone else who is willing to come to the party.

No-one will remember if you had the world’s largest bouquet or the best tablecloths or the food you serve (unless the oysters are dodgy,) it’s all about celebrating your love and new life.

3. Talk to your family

If you’re part of the bride’s or groom’s family and want to contribute, let them know. You could contribute a set figure or fund a specific part of the ceremony, such as the flowers, drinks (very brave move!) or venue.

If you’ve got friends in the right places, make sure you include them in your planning.  Chances are, they may also know some others who are happy to help.

4. Prioritise

What must you have at the wedding and what can you compromise on? For example, do you want a live band but aren’t fussed about fancy table decorations?  Do you want the Disney fairytale carriage experience, or your mate’s EH Holden will do the trick?  Agreeing on your priorities up front can help you clarify which aspects to save for and which to downplay or skip altogether.

Do you want the amazing Vera Wang frock that you can rock on the day and hang in the cupboard for the rest of your life and drag from home to home; or would you rather spend it on the honeymoon or save for a housing deposit?  Life’s full of compromises!

5. Start a spreadsheet… if you must!

Once you have an idea of your budget and priorities, it’s time to dive into the details.  OK, not everyone loves this part, but it is really necessary!

If you’re an excel nerd, use a spreadsheet to list a maximum cost for every wedding-related item from bouquet to band and compare it with vendors’ quotes. Don’t forget to take into account hidden costs like insurance, corkage and the marriage licence or celebrant as well as costs related to the rehearsal dinner and honeymoon.

Otherwise, a wedding planning notebook is fine… as long as you have something to track it all in.

6. Stay accountable

Avoid blowing out your budget by keeping your spreadsheet (or Kikki K notebook) up to date, setting up a wedding-expenses-only bank account, and sticking to your guns as far as your limits and priorities are concerned.

If you’ve created your budget and despair of affording your dream wedding any time soon, don’t worry. Here are some tips to help you reign in your costs.

  • Limit your guest list to your favourite people: At $100 per head, every 10 guests cost you $1,000.
  • Think outside the box when picking a wedding venue: A park, garden, art gallery or friend’s house may be more affordable than a hotel, and the natural ambience can save you money on decorations.
  • Book an out-of-season wedding: It can be cheaper to schedule a wedding in winter, on a week night or a Sunday morning.
  • Keep your menu simple: Stick with the specialties of the season and region, consider canapes or buffets over three-course meals, and ask for house spirits (not top-shelf varieties) or beer and wine.
  • Investigate hiring over buying: If there’s some items you don’t need forever, like suits or gowns it may be worth hiring for the day and giving back.  No dry-cleaning necessary!

Call in an expert

While you may call upon a wedding planner to help you organise your special day, a financial planner may be just as important.

A professional financial adviser may help you create and stick to your budget as well as stay accountable – so you can focus on the important things, like celebrating with the people you love!

If all that just sounds too hard, run off to the Registry office and have a party when you make the announcement!

And hey!  Congratulations!!

 

[1] Australian Securities and Investments Commission, ‘How much can a wedding cost?’. MoneySmart. Available at: https://www.moneysmart.gov.au/managing-your-money/budgeting/simple-ways-to-save-money/how-much-can-a-wedding-cost

Running a Small Business? Make sure you are properly insured

Running a small business is hard work. The last thing you need is to lose it all because of poor insurance choices.

Do your homework

First you need to work out what needs to be covered. There are the obvious things such as plant and equipment, the less obvious things such as public liability, professional indemnity, and finally protecting the financial performance and position of the business on the sudden loss of a key person.

Policies should cover a wide range of eventualities and each business should have a policy package specifically geared to its needs.

People are the most important assets, and the success of the business may hinge on key personnel.

Business expense insurance can cover certain fixed business expenses, and key-person insurance can protect the financial performance in the event of a key person or business owner dies, is permanently disabled or suffers a traumatic event.

Insufficient coverage

Owners risk losing control of their companies, serious financial losses, and complex partnership problems by being uninsured, or underinsuring against something going wrong.

Having the wrong kind of insurance is equally risky and ultimately a waste of money, which is why it’s necessary to seek advice on the right insurance for your business.

It’s also important to regularly review and update your insurance, especially when your business grows or changes.

There is always tax

You do not have to pay capital gains tax (GST) on a business insurance settlement, provided you tell the insurer before making the claim what proportion of the premium you can claim GST credits for, which will be the part that relates to business purposes.

But remember, your accountant should assess all taxation matters.

Working together with your financial adviser to determine what insurances can be put in place is an important consideration when running a business.

The Insurance Council of Australia, http://www.understandinsurance.com.au, and the Australian Taxation Office, www.ato.gov.au, have more information.

Women & Retirement

Seeing there’s actually no fixed aged when you can retire, it’s really completely up to you.  What it does come down to usually is, can you fund it?

Most start thinking in their’s 50’s about how it’s all going to work, as entitlement to the Age Pension is somewhere between 65 and 67, depending on when you were born.

Often a gradual transition is the way to go, slowly cutting back on days at work, going part time before finally exiting the work force for good.  Other conditions to consider when approaching retirement and leaving the work force for good are the loss of social interaction provided by work and the mental stimulation that’s provided.

Do you have hobbies that can take the place of your usual schedule or will boredom quickly creep in?  Exiting slowly can help you keep a hand in, whilst transitioning slowly, giving you a taste for what lies beyond work.

Some may choose to continue working part-time towards their 70’s as life expectancy moves forward.  Others have always wanted to volunteer for a local school or charity and now enjoy giving back to their local community.

If you still have a partner, discussing expectations and plans for life after work is essential to ensuring you’re on the same page.  Suddenly being together 24/7 isn’t everyone’s ideal start to their retirement years.

For others, it’s time to buy that caravan or Harley (or both!) and join the multitudes of Grey Nomads touring the country!

For others it’s not so easy.  Forced retirement may be brought on by having to assist in caring for aging parents or unwell children or grandchildren.  This can seriously impact your ability to put away additional funds to help in your retirement years.

And still, financial considerations remain top of mind.  How much you’ll need in retirement is completely dependent on the lifestyle you’ll be living…  And what you have saved to boost your pension will often dictate that lifestyle.

You might want to sit down with your planner long before retirement is on the horizon and discuss strategies that may suit your circumstances.  If your debt is low, it may be time to give your superannuation funds a boost by implementing salary sacrifice strategies.  For those closer to retirement, it might be worth considering a Transition to Retirement strategy.  Those on a lower income may be able to take advantage of the Government’s Co-Contribution strategy.

Getting the right advice for your situation is likely the best investment you can make in your future.  So how does retirement look for you?

Bali Retreat for Wealth Planning Partners

 

Well, the inaugural Wealth Planning Partners (WPP) retreat has been held, done and dusted in Canggu, Bali, Indonesia.

Bali has never been high on my list of Must See places, but I can certainly see why the Aussies have been heading there for decades! The Balinese are friendly (tho more than happy to take the tourist dollars) the beer is cold, and the weather is always warm and humid which most of us are used to.  Basing our stay in Echo Beach between the rice fields and beaches was really special and a lot was accomplished.

We kicked off our first day with a Mexican dinner which served the three of us, with drinks for under $50.  Expensive by local standards!  The following morning was a massage each and session on Social Media and why it’s so important to an adviser’s business going forward.  After lunch, one of our guest speakers, Ian, a lawyer from Brisbane dropped by and we learned about Trusts and structures used for the protection of wealth and to note when we need to recognise that our clients need to sit down and discuss further with a lawyer.

But it wasn’t all work and for Saturday we met up with some friends in Kuta, and headed to Tannah Lot in the afternoon for a sunset tour.  It’s really been commercialised, but certainly some great photo ops!  Then we hit Ubud on Sunday for the Paon Bali Cooking School.  By evening we’d had a spa treatment at Ayana Spa (formerly the Ritz Carlton) and finished off at the Rock Bar for drinks.   If you ever get a chance to go to Bali, all of these are a Must Do!

Monday, it was back to the grind and we were joined by another guest who filled us in on the Big 4 banks, where they sit in the Aussie economy and how we all fit into the grand scheme of things.  A great ‘who’s who in the zoo’ for the rookies.  Ian followed up with a second session, this time on the benefits of Key Man cover and Debt Reduction planning in Business Risk.  We found a great hotel for lunch at the suggestion of a local and loved the artifacts on display at the Hotel Tugu, apparently the life’s work and collection of a wealthy Javanese businessman, now on display for all to enjoy.

Tuesday, we all worked on our ‘WHY’ – why do we want to be planners? what can we give back to the customer? what’s so special about us? and why would you want to use WPP and it’s advisers?  Always a spot of soul searching goes on there, but great to revisit for me, and good for the guys to explore.

If the whole trip was to have us work more cohesively as a team and understand our individual roles, then the trip was a resounding success.

Learning what we can do when we play as a team has been good for us all.  I just know it’s going to be a great year for WPP!