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How to Buy an Investment Property Using a Self-Managed Super Fund (SMSF)

 In the ever-evolving landscape of personal finance, one aspect that often flies under the radar is superannuation. This fundamental financial tool plays a crucial role in securing your future, yet it remains one of the most overlooked aspects of financial planning. In this comprehensive guide, we'll shed light on what superannuation is, why it's indispensable, and provide expert advice tailored for the residents of Dubbo, NSW. Understanding Superannuation Superannuation is a prolonged savings strategy created to finance your retirement. It's a financial arrangement in which a percentage of your income is set aside into a superannuation fund, accumulating over the course of your working life. This nest egg is then invested to grow your wealth, ensuring you have a comfortable retirement. The Importance of Superannuation Superannuation is not just a savings account; it's a financial safety net for your retirement. By contributing to your super fund regularly, you're essentially creating a pool of funds that will sustain you when you decide to step back from the workforce. The power of compounding returns over time can significantly boost your retirement savings, providing financial security during your golden years. Choosing the Right Superfund Selecting the right superannuation fund is a critical decision that directly impacts your financial future. With numerous options available, it's essential to consider factors such as fees, investment performance, and the fund's reputation. For Dubbo, NSW residents seeking expert retirement planning solutions, it's advisable to consult with local financial professionals who understand the unique challenges and opportunities specific to the area. Dubbo, NSW Superannuation Advice: Why Choose a Local Australian Company? When it comes specifically to superannuation advice for Dubbo, NSW residents, opting for a local Australian company can offer distinct advantages. A local provider understands the economic landscape of Dubbo and can tailor advice to align with the region's specific retirement planning needs. Expert retirement planning in Dubbo, NSW is not a one-size-fits-all solution, and a local company can provide personalized guidance based on local market conditions and potential investment opportunities. Which Superfund is Best for You? The best superannuation fund for you depends on various factors, including your financial goals, risk tolerance, and investment preferences. While industry funds, retail funds, and self-managed super funds (SMSFs) each have their advantages, seeking professional advice ensures you choose a fund aligned with your unique circumstances. Explore the possibilities with expert retirement planning solutions in Dubbo, NSW to make informed decisions about your superannuation fund. Underrated Superannuation Advice You're Not Taking Regularly Review Your Superannuation Strategy : Life changes, and so should your superannuation strategy. Regularly assess your financial goals, contributions, and investment options to ensure your super fund aligns with your evolving needs. Consolidate Multiple Super Accounts : If you've changed jobs, chances are you might have multiple super accounts. Consolidating them can simplify management, reduce fees, and potentially boost your overall returns. Consider Salary Sacrifice : Explore the benefits of salary sacrifice to boost your super contributions. This tax-effective strategy can maximize your retirement savings over time. Final Words Superannuation is a cornerstone of financial planning and Dubbo, NSW residents can benefit from expert advice tailored to their local context. By understanding the importance of superannuation, choosing the right fund, and heeding underrated advice, you're taking proactive steps toward securing a financially stable retirement. For p ersonalized retirement planning solutions in Dubbo , consult with local experts to navigate the path to a prosperous retirement.

Retirement Planning in New South Wales: Your Path to a Secure Future

With the potential for frailty (on average) to span 20% of our retirement years, we need a plan. We need to think ahead. Decide what is important. While this may sound grim, it is not all bad. Having a plan can set you up to have choices and more control so you can maintain as much independence as possible. If frailty creeps up and you have not planned ahead, you might find yourself herded down a path based on the bias and the goals (no matter how well-intentioned) of the person who first says “I can help”. A plan gives you time to consider your preferred choices and be prepared. This may allow you to: · Ensure your home is modified and ready to continue living there. · Take away some of the stress and uncertainty from your family. · And most importantly, have the finances ready to pay for the support you need to ensure not only quality of care, but also quality of lifestyle. But not everything always goes our way or how we planned. This is why planning is important. Contact us today on 0487 181 676 to make an appointment to discuss your current or future aged care needs.

Many people fear the prospect of moving into residential aged care. So when the kids say "come live with us" they may jump at the chance to stay in a family home. But the family relationships can break down and granny flat arrangements may cause more problems than they solve. The message is to jump with eyes wide open, and with a realistic view of family dynamics. If you want to start exploring options to access support in your frailty years, call us on 0487 181 676 to make an appointment. 

Australia's population is ageing, which is good news for enjoying longer lives. But quality of lifestyle in our older years may rely on access to quality of care. And as our population ages, pressure on funding and resources is likely to increase. This is starting to focus discussions and reforms on who pays for care — Government or consumers. Make this year, the year you start to plan for all of your future years. Ask us about aged care and let us help you plan ahead. Call us on 0487 181 676 to make an appointment. 

I’m often asked where’s the best place to invest $1,000? Where’s the best place to invest my tax return? In the November edition of Money magazine a panel of 8 investors were asked for their best pick to invest $10,000. They suggested managed funds, shares, EFT’s and contributing to superannuation or parking the money in the mortgage offset account. However, you don't need $10,000 to get started, $1,000 will do.

Today I thought I’d share how to read a superannuation statement. Tracey made an appointment with me because she thought her super was going backwards. We spent 30 minutes going over her statement and she went away happy. Her super was in good shape; just had to make one or two changes. I just showed her how to read the statement. Check your personal details are correct On the front page quickly check your personal details are correct. If they’re wrong honestly it can be a nightmare to correct but you’ve got to get onto it. You’ll never get your money out if your details don’t match. Check your account balance The REST statement gives us the balance on page 2. Other super funds want until the last page. We want to know the balance at the end of the last financial year. The balance of your super will be all your employer contributions, plus any contribution you have made, income and growth, minus fees, taxes, and insurance premium. Very broadly it should be 10% of your total salary multiplied by years employed. Employer contributions This current financial year your employer should now be putting an amount equal to 10% of your wage, every 3 months. Previously the amount was 9.5%. Has your employer met their obligation? Additional contributions You may have chosen to ‘salary sacrifice’ and have you boss putting more of your salary into super to reduce your tax. There’s nothing wrong with doing this but I would ask is it the wisest thing to do when you have debt. I often to the maths for clients to figure out the best thing to do, - invest or pay down debt. It’s what ultimately get you to your goal first. Investment returns What’s the actual return on my investment as a percentage and is it good? This is the tricky bit because it all depends on how the super funds presents the information. REST presents the information of page 3 and there are numbers all over the page for every investment position. Where do we start? Have a look where you are actually invested. This statement says my client is invested in the ‘Core Strategy’ fund. This fund did 8.75% over one year and 8.81% over 5 years. So now I want to know how this compares to other super funds. Is it above, below or showing the same average as other funds? Your super statement will undoubtedly say ‘we’re the best.’ I’m looking at a REST statement and they have a nice bar diagram showing their return was better than the ‘other funds.’ But look at the fine print at the bottom of the page. How are they rating themselves? Are the results before or after fees? What time frame are they using? It’s tricky because we must compare ‘apple with apples.’ Compare ‘apples with apples.’ We need to know the asset allocation of your investment. How much is defensive in ash and term deposits, and how much is invested in growth assets such as shares and property. This is how we compare the performance of the underlying investments in your super. So what is the asset allocation of your investment in super? REST shows the information on page 2. The Core Strategy fund has growth assets 76% and defensive 24%. To check of the performance of your fund we need to compare it with funds of the same asset allocation, in this case close to 76% growth. It often comes a surprise this is where our money is invested. We tend assume super is like a bank account we can’t touch. In fact, it’s an investment and we have to take ownership as to where it is invested. A typical growth fund is anywhere between 70 to 80% in growth assets, 70 to 80% invested in shares and property. It’s the riskier stuff compared to cash but over the long term it’s going to make a lot of money. REST has a balanced fund, a diversified fund and a high growth fund. The labels are all different across superannuation industry this is why we have to look at the underlying asset allocations. Red flags to look for if your super is sat in cash. It’s going nowhere and probably will be eaten up by fees. Another red flag: 100% invested in ‘high growth’ (or aggressive) position - you are risking everything! Go for broke! This may suit your nature and you are comfortable with this. Knowing your asset allocation so we go to websites such as SuperGuide or CanStar and make comparisons. Always check the fine print and make sure outcomes are calculated after fees. We want to know the actual return that come to us after they have taken their cut. Also look at the reporting period. Over the last 12 months the average middle-of-the-road or balanced investment has been returning a good 18%. Before you get excited this is abnormally high and result of the market reacting to the Government stimulus packages being poured into the economy because of the Pandemic. Over a 5 year term a balanced fund, say 60% growth, should be averaging between 6 and 7% over the long term. Check your fees. On the transaction page of the REST statement, I can see the actual administration fees charged. I would like to know how REST fees compare with other industry super funds. REST gives me another bar graph telling me on a balance of $50,000 they are about $200 a year cheaper. You might be in a retail fund. You’ll have to check out my next blog on retail fees but red flag if you have adviser fees and you’ve never seen your adviser. Perhaps you do see your adviser once a year but is the fee justifiable? Insurance premium Note how much life insurance you have and ask if it’s appropriate. Tracey didn’t realise she had $300,000 death benefit and paying for it. Again, the superannuation fund had given her the default amount of insurance cover and were deducted premium for it. I asked Tracey why would she, a single person with no debts, want $300,000? And to rub salt into the wounds: why are you paying for someone else to get rich? Sure, if you had debts, a mortgage, you may want this kind of cover. But as it is now, Tracey’s parents would get all the money. Bear in mind whoever your leave your super to, they get the balance of your super plus the life insurance. Check your nomination of beneficiary. Who do you want to leave your super to if you die? Superannuation is held in a Trust and therefore is outside your Will. Without a nomination it can take months to years for your family to receive your super. Are you on track to a good self-funded retirement? At the end of the day, I said to Tracey, is this super on track with your retirement goal? Tracey is in her 30’s and hadn’t thought this far. So I explained how superannuation is a forced savings plan so ultimately when we stop working (retire) we can pay ourselves a good wage for the rest of our lives. (I always add don’t count on Centrelink and the Age pension because it might no longer be around when we retire.) What’s the maths? Quickly, and in very round numbers it should be approximately 7 times your current annual salary. Stacey is earning $60,000pa so what she needs approximately $420,000. Now if you Google ‘Retirement calculator’ and punch in your numbers you should have a good idea you’re on track. Remember: you choose when to retire. For my clients I do more precise calculations starting with the question: how much a year do you want in retirement? Often the reply is we want to do better than the Age Pension but we’re not greedy; we’d be happy with $60,000pa. Therefore, I compute for them a figure in the vicinity of $800,000. That becomes the goal. The super statement starts making sense; this is how it all fits together. If Tracey’s is aiming to retire at 65 years she needs $420,000. There are calculators on the internet to do the projections. I do the precise maths. Tracy, your super fund is doing well so long as your employer keeps putting in $6,000 a year and you get an average of 7% return. But watch those fees and perhaps trim that life insurance! If you are worried about your superannuation or if you have questions about your super fund, please contact me. I would love to help answer your questions.