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Jarickson

Life Insurance Brokers

Superannuation

Four ways to boost your spouse’s super

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Do you have a relatively good level of superannuation? Has your spouse been out of the workforce, looking after kids or running a business without contributing to super?

Heard all the ‘hype’ about Self Managed Super Funds and want to see how you can boost your super accounts to make it work?

It’s not uncommon to see a large difference in the value of superannuation held by two members of a couple.

There are a many different ways that you and your spouse can boost their superannuation balance. The four most common methods are via:

  1. Spouse Contributions

A spouse contribution can be made to a super fund by an individual on behalf of their spouse.

If your spouse’s total income (adjusted taxable income) is less than $13,800 a tax offset of 18% is available to you for contributions up to $3,000 that you make to your spouse’s superannuation fund.

The offset can be used to reduce the tax payable on your taxable income. You can contribute more than $3,000 to their super fund (within contribution limits) but you won’t receive the spouse contribution tax offset on anything above $3,000.

  1. Individual Contributions

If you have surplus income or cash funds in your personal or joint names, you may wish to consider using this money for you or your spouse to make after tax (aka: non-concessional) contributions to their super account.

The type and amount of contributions that can be made will depend on factors such as age and employment status.

  1. Splitting Contributions

In addition to contributing to your spouse’s super, you can also choose to have some of your own super contributions put into their super account (if they are under 65 and not retired).

Super contributions can only be split after the end of a financial year, and some super funds may charge a fee to do this. Two types of contributions can be split: employer and non-concessional contribution.

  1. Government Co-Contribution

If your spouse is under age 71, has at least 10% of their total income coming from employment or running a business and earning less than $49,488 (2014/15), they may be eligible to receive a Government Co-Contribution if they make personal non-deductible or after-tax contributions to their super account.

The co-contribution is paid at a rate of 50% of the eligible contributions with a maximum co-contribution of $500. The Government’s Co-Contribution is a great way to boost super savings. Use the government’s calculator to find out what you can receive back.

While these four strategies are all effective ways to boost superannuation which ones are right for your situation will depend on you and your spouse’s personal and financial situation. We recommend you speak to us and our aligned financial planners who will be able to guide you through the process and work out the best way for you to build your spouse’s super balance.

When to Consider an SMSF

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Self-managed super funds are also known as DIY super funds. They can have up to four members and are generally established by an individual or a family to manage the investment of their own superannuation savings.

Members of the fund must also be trustees, unless a corporate trustee is appointed in which case all members must be directors of the corporate trustee. Consequently, members are responsible for all investment and compliance decisions of the fund, including administration, trusteeship and taxation.

Managing your own super can offer greater control and access to a broader range of investment options such as shares,direct property and alternative asset classes not available to conventional super funds. However, they can be costly to run and all members are held responsible for their decisions, such as where legislative compliance is concerned.

When determining whether a self-managed super fund is right for you there are some simple steps you can follow.

  • Seek professional advice
  • Make sure you have enough assets, time and skills
  • Understand the risks and laws
  • Make sure your trust deed and investment strategy are tailored to suit the member
  • Make sure you can meet your record keeping and reporting obligation
  • Make sure you understand the auditing obligation

While self-managed super funds can be a very good way of looking after your super, it is extremely important that trustees understand what they are doing, and if in doubt, get some advice and/or assistance. The penalties for getting it wrong and becoming a non-complying fund are severe.

A Jarickson Insurance Adviser is available to provide advice about how to structure your Life & Disability Insurance in a self-managed super fund. Why not schedule a call with a Jarickson adviser now on 1800 674 435?

Information current as at 14 May 2015
The advice is general in nature only. Before acting you should consider the appropriateness of the

Self Managed Super Fund Trustee – which to choose?

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Video>> When determining whether you are going to begin a Self Managed Super Fund, there are many questions you need to ask yourself (with your accountant) before finalising it.

One of the major determinations is who is going to be the Self Managed Super Fund Trustee. Depending on the choice you make, this will make a big difference both in retirement and in the event of distributing to beneficiaries as part of the insurance plan within your self managed super fund.

Who better to ask that question than the Australian Tax Office with a very simple 2 minute video:

 

For information on how to make sure your Trustees decisions line up with your life insurance benefit wishes, contact us below by pressing the Mail icon. Alternatively, call 1800 674 435.

Commercial property investment over Residential – The basics?

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When talking property investment we generally think of residential real estate, often giving little or no thought to commercial property as a viable investment solution.

Commercial real estate is primarily used for business purposes and consists of three sectors – retail, office and industrial.

Six major reasons to invest in commercial property: 
– higher returns which range from between 6-9% PA nett, depending on length of the lease, location of property and strength of covenant
– majority of the time they will have longer leases than residential property – typically 3, 5 or 10 years with fixed or CPI annual increases
– tenant meets the cost of all outgoings, such as, council, water and strata rates, and more often than not also land tax, property management fees, general repairs and maintenance
– substantial less wear and tear and far less for tenants to damage. Most commercial properties are simple and include four walls, toilets, a kitchenette and air conditioning.
– accessible via your self-managed superannuation, making it a popular investment vehicle to those heading close to retirement

Sound fantastic? So why isn’t everyone investing in commercial property?

Although it all sounds fantastic, like all investing, commercial property investment is not without risks.

Some factors to consider when looking at commercial property as investment. 

  •  the required deposit is between 30-50% of purchase price which is a lot higher than residential
  •  potential for longer vacancy periods
  •  capital growth is often lower, influenced significantly by economic factors such as unemployment and consumer confidence

There are also other taxation issues to be taken into consideration, such as GST, which needs to be discussed with your accountant.

So while the associated risks with commercial property can be higher than those with residential, the benefits can be significantly greater. The key is to have experienced and reputable experts who can guide you in the right direction.

Simon Russo of Coutts Real Estate is a licensed Real Estate Agent specialising in commercial, industrial and retail property.

A common question Mr Russo gets asked,

“Overall, is commercial property a better investment than residential property?”

The answer is neither, as it really depends on what the investor is aiming to achieve and where they are at in their life cycle. Some may be aiming for high-yielding property for cash flow, whilst others might be prepared to wait it out for larger capital gains with minimal cash flow, so they may leverage into other investments.

As a licensed real estate agent of over 10 years, Simon Russo has the skill set and qualifications to confidently assist in the selling, leasing or buying of a commercial asset.

You can reach Simon HERE or by calling 0414 678 632

Older Working Australians

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The government and media have started talking about the prospect of Australian’s working longer, into their 70′s. This poses a few major problems, one of which is how to insure these people.

Considering as you get older, the chances your health and/or ability to work due to accidents gets into the higher risk area, the more you will need to protect the income you require to live. But insurers generally stop insuring you at Age 65!

Recently, one particular insurer have announced they will pay benefits till Age 70, keeping in line with the trend of older working Australians. If you were to lock in your premiums with a LEVEL Premium so you can save thousands in premiums over time.

To find out how you can ‘lock in’ your premiums till retirement, as opposed to getting an increased premium every year,Contact Me today or call 1800 674 435.

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