Obviously since I am based in Canberra, most of my clients are also from Canberra. Any run-of-the-mill financial planner can provide their clients with generic financial advice that usually applies no matter where they live. However my financial planning advice is tailored towards people that live in Canberra, people that are looking to retire in Canberra and/or people that are already retired and living in Canberra.
Below are a constantly evolving series of articles written by me that discuss financial planning specific to residents of Canberra, along with public servants.
Russell Dew Financial Services provide a range of professional and effective financial services dedicated to assisting public servants in Canberra.
How can you drive your wages further…
- Lease a new car rather than borrowing
- Buy a work related computer
- Build additional assets for retirement inside superannuation
- Commonwealth Superannuation
Review your Commonwealth Superannuation and use salary sacrifice contributions to reduce your tax rate.
Are your investments in the correct asset allocation for your comfort zone? The sleep test – can you sleep at night?
Non Superannuation Investments
Have you considered options outside of superannuation to invest in and build assets for retirement?
Clarify the benefits available from both your Comsuper Pension and the Age Pension.
- Then determine if you will have an adequate retirement income.
Paying your home loan off more quickly
You may be better to build up assets in superannuation before retirement as the tax rates are lower and at retirement you could have more funds to pay down your loan.
Public Servant? Interested in Starting or Improving Your Financial Plan for Your Future?
In many situations, there can be more investment, financial benefit and tax deductable options available for people. Make use of the beneficial options available for you and call us on (02) 6232 4252, email us or send a message.
Many pre-retirees worry that they do not have enough income to maintain their pre-retirement lifestyle. The reality is most couples are only living on $55,000 to $65,000 net income per year before they retire. During their life time of work, around ¼ of their income goes in taxes, children’s costs and loan repayments. Most clients once they retire will not have debts, children at home or pay much tax and so their living costs are very low.
Also retirees, aged between 65 and 67, can obtain an income from the Age Pension plus fringe benefits such as rates, utilities, medical and public transport discounts.
Retirees generally will have enough income to live on but may not have much in the way of lump sums to cover larger expenses such as car replacement, house repairs, travel and medical costs. A lump sum, accumulation target before retirement should allow for funds of at least $300,000 for a couple and $200,000 for a single person.
Retirement incomes in Australia come in a number of types including the Age Pension. For most retirees they will have assets in superannuation funds before retirement which can then be transferred at retirement to either an Allocated Pension or into Annuities.
Annuities have a fixed interest rate of return and can go for a fixed term or continue on for life. They may be set up to revert to the spouse on death.
Allocated Pensions have more flexibility because
- You have access to your invested funds if required,
- You can change your income amount at any time,
- There is no tax to pay after the age of 60,
- The income is only partly assessed on the Age Pension Incomes Test,
- On death the remaining assets can be passed onto your spouse and/or children.
The Commonwealth Government has consistently indicated its preference for working Australians to build their assets for retirement using superannuation. As an incentive the Commonwealth has reduced the tax rate on superannuation contributions to 15% if the contributions are made by salary sacrifice.
Salary Sacrifice is the reassigning of your wage back to your employer who then places these wages into your superannuation as an employer contribution. This avoids the contribution initially being taxed at your marginal tax rate before being placed into your superannuation fund.
This strategy can be used where both employer super guarantee and employee salary sacrifice contributions amounts to $25,000.
By reducing the tax on superannuation contributions down to 15% a worker can save up to 32% tax at the top marginal tax rate. This would help significantly in building up assets for retirement.
Borrowing money to invest into income producing assets is one way to both achieve a tax deduction and buy assets that will have an income for retirement.
The benefits of borrowing for an investment are
- The interest cost is tax deductible each financial year of the loan,
- The income and the asset value should rise over time creating a capital gain that can be realised on the asset sale in the future,
- Other tax credits can accrue, for example franking credits and depreciation allowances,
- The repayment of the capital is not tax deductible but eventually the lower debt means you have less interest costs and the investment eventually becomes profitable. That means the income exceeds the investment expenses.
- Eventually as the asset is paid off the income can be used to finance another loan in a new asset or use the income to finance your retirement.
Investing does require you to consider the risk of the investment. Risk can be reduced by diversifying across many investments and many classes of investments which mainly fall into the category of either property or shares.
Once a person receives any income payments via the Age Pension Scheme they will receive a pension card within 10 to 15 days. This card provides major discounts for State and Local Government services and various utilities. The discounts include:
- Gas, water and electricity,
- Public transport,
- Medical treatments.
Even retailers may give discounts such as at the Movies and special pensioner discount days.
The discounts especially mount up for pharmaceutical and medical treatments. An average couple could expect to save $2,000 to $3,000 per year.
Take Advantage of Financial Options Available to You
With their expertise in the area, a financial planner knows of the wide range of options available which can help you financially, assisting you in making the best choice for your investments and goals.
Depending on your situation, a financial planner can assist you with:
- Salary packaging, superannuation, investments and retirement planning in Yarralumla.
- Legally reducing the amount of tax you have to pay.
- Increasing your income and capital growth from your investments.
- Creating a sustainable and successful investment over time.
- Improving your Centrelink benefits and assistance.
- Covering the loss of income caused by the possible disablement or death of a family member.
Professional Financial Advice and Peace of Mind
There are thousands of different investment options to choose from. Figuring out what specific option or options to choose can be difficult and confusing.
A benefit of receiving financial planning advice and services is that you can relax, knowing that you receive advice and comprehensive knowledge about the options that are appropriate for you and your financial position. A financial planner will sit down with you and review your situation, income, your short term goals and your long term goals, then assist in creating a detailed plan to achieve your goals and benefit you accordingly.
Plan for Retirement Easily
Retirement is a time of life where you want to be able to relax. Under the guidance of a financial planner, you will receive continual advice in arranging and improving your retirement fiscal plans and options.
Unfortunately, retirement planning is a process that is often overlooked. Neglecting this process can leave people in a state where upon retirement, they are struggling heavily due to lack of funds available, especially with the cost of living set to rise even further.
Manage Investment Risks
Investing is a complex process, filled with risks that you need to look out for if you wish to avoid losing your money invested. A financial planner can assess your investment options in detail, the risks associated with them and the risk level you are comfortable with, providing you with a clear range of choices and any potential risks that could occur.
Social Security and Centrelink Assistance Made Simple
The Australian social security system can be complex, confusing and time consuming. A financial planner and advisor can assist in cutting through the long details and obtaining the benefits you need to live comfortably.
Financial planners are here to help with your financial goals. These may change overtime and various laws and opportunities may change, impacting on your financial goals. With ongoing support, you can always access professional advice to review your short term and long term goals, assess and avoid risks, and keep on track with improving your investments and position.
At Dew and Partners, we provide professional, comprehensive and competitively priced financial planning services, aimed to give you knowledge and control of investment processes and benefit you accordingly. We are located in Deakin, Canberra
If you have any questions or are looking to book an appointment, please call us on (02) 6232 4252 or send your enquiry.
It’s a question we receive a fair bit about financial planning in Canberra. With more and more people moving to Canberra, many are wondering what they can do to secure their future and along with that, their finances and retirement. We’ve compiled a list of benefits that a person may receive from financial planning in Canberra.
Plan for Retirement and Stress Less
Many people are looking forward to retiring and being able to relax, enjoying the many rewards of their years working. Unfortunately, it can be a common case where people leave their retirement planning too late, leaving them in a potentially confusing and stressful position.
By getting in early and setting up a plan for your future, you can identify areas where your investments may provide a more positive benefit to you and your family, along with whether or not you are on track for your goals, and what can be done to enhance your future (such as pension benefits).
Depending on your individual scenario, it may be possible to legally reduce the amount of tax payable by claiming certain expenses relevant to your profession and position.
Get More out of Your Public Servant Career
If you’re a public servant in Canberra, you may be wondering how you can make the most out of your superannuation, investments, salary packaging, or your retirement options.
A financial plan and planner can assist you with identifying areas where you can drive your wages further and potentially receive more benefits from your position and investments.
If you're intrigued to see how we can help you with financial aspects of your public servant role, you can find out more by reading our public servants section.
Centrelink Assistance and Advice
Depending on your case, you may be eligible to improve your Centrelink benefits and assistance. Through identifying your position and potential options available to you, you could receive further support to help you live comfortably and securely.
Continual Support and Professional Advice
Navigating the huge range of investment and career finance options can be incredibly complex, confusing and time consuming.
With their years of industry experience and knowledge, a professional financial planner can assist you in this process, helping you and your family navigate through the potential options available to you, along with discussing your relevant financial and personal goals that may impact on your future.
Overtime, your goals may change too. You may have a career change or could look at new investment opportunities. A financial planner can provide continual support and advice, helping give you more time to focus on your personal life and goals.
Time to Start your Financial Plan?
Whether you’re looking to start a financial plan or review your current one, Dew and Partners can provide the professional support and advice to assist you.
Staff are more than happy to field any queries you may have about our comprehensive range of services, along with appointment booking and explanation of potential options that may be available to you and your family.
If you’re interested, call us today on (02) 6232 4252 or send through a message via our contact us page.