Some people believe that the only time they need to see a financial planner for a review is when their situation changes dramatically.
However, there are some financial factors that have changed which may affect them that they are not aware of. Some examples of when this has happened to clients over the past few years are below:
Default insurance became mandatory across superannuation. In particular, those with industry super funds had insurance included as part of their superannuation policy.
However, as of 1 July 2019, this insurance will be cancelled if your account is inactive, regardless of your account balance. This is a swing in the total opposite direction following complaints of superannuation being eroded by insurance premiums.
This can be a major issue if you are unable to get replacement cover, for example, due to health reasons. Also, depending on your superannuation company, your financial planner may not be notified of this proposed cancellation, so they cannot elect to retain this on your behalf. You will need to elect in writing if you don’t want your insurance cancelled.
Contributions to super
In the past, the only way for employed persons to get a tax deduction for super contributions was through salary sacrifice, and only those who were self-employed could claim a tax deduction for after-tax lump sum contributions into super. However, as of last year, anyone can make a contribution to super and claim a tax deduction (there are other rules that apply).
Also, the limit on after-tax contributions has changed from $180,000 to $100,000 per year, and the limit on tax-deductible contributions has reduced over recent years from up to $50,000 to now $25,000 for everyone. A maximum limit on the amount you can hold in total Superannuation Pensions has also been imposed.
Downsizer contributions to superannuation are now available where you have downsized your home and want to put the proceeds into super (over and above other contribution limits).
When making these contributions you need to be careful you are making the right kind of contribution and that you notify your fund in writing of your intentions.
Centrelink Aged Pension
Eligibility ages for the Centrelink Aged Pension have increased, depending on your age.
There have also been changes to the Centrelink Income and Assets thresholds for benefit payments.
Seeking professional financial planning advice
For many of the above and particularly for more complex strategies, financial advice is strongly recommended.
Even a 30-minute to one-hour catch up with your financial adviser can help your adviser to identify if changes to the rules can affect you.
Also, your adviser might recognise something in your situation that you don’t see as a change, but that could affect your overall financial plan. Even if no changes are needed now, it might allow forward planning, and advisers always value a catch up with clients to see how they are travelling, even if no advice updated is needed at that time
Our team of specialists are here to help
If you are looking for any strategic financial advice, get in touch with our team of highly-trusted financial advisers. Contact us on 4962 4440 or you can fill out our Pre-appointment Questionnaire here and one of the team will be in touch.