Make today count: #5 I will boost my super

Even though your financial strategy should be for the long term, there are things you can do each day to help you achieve your goals sooner. Here’s #5:

Your super has the potential to become one of your most valuable assets. The more you put into it now, the more you’ll get out of it when it’s time to retire – especially when you consider how your earnings compound over time. Here’s what you can do right now to help grow your nest egg.

First, make sure you only have one super account, (unless there’s a specific reason why you need multiple accounts). If you’ve changed employers over the years you might have ended up with multiple accounts in different super funds – which are all charging you fees. So choose your preferred fund and then ask them to track down all your lost super and roll it over into a single account.

Next, provided it’s right for your circumstances, you could talk to your employer about setting up a salary sacrificing arrangement so you can put some of your pre-tax dollars straight into super. Using ASIC’s Superannuation Calculator at www.moneysmart.gov.au you can see how even a small contribution on a regular basis can make a big difference at retirement. For example, if you’re aged 35 and earn $70,000 a year, salary sacrificing just $50 a week could add up to an extra $73,000 or more by the time you retire2.

How your financial adviser can help

No matter what financial position you’re in, there are plenty of things you can do today to start building the future you want. But the most important one is to talk to your financial adviser. With their experience and expertise, your adviser is in the best position to guide you at each stage of your financial journey. As well as helping you create a long-time financial strategy, your financial adviser will show how you can break it up into small, achievable milestones. Not only will this be easier to track your progress, it will also give you a clearer idea of what you can do to make each day count. Make today count.

Matthew Wood, Senior Wealth Advisor and Director, can help you with strategies to boost your super and achieve the lifestyle you deserve!

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2 Calculated using the MoneySmart Superannuation Calculator. Assuming an investment return of 5.7% pa and a retirement age of 67.


Disclaimer: This article has been prepared by Count Financial Limited ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124.

Information in this article is based on current regulatory requirements and laws, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its related entities, agents and employees for any loss arising from reliance on this document.

This document contains general advice. It does not take account of your individual objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision.

Insurance priorities for all ages – Life Stage: Mature Couples and Singles

Are your family, friends or adult children part of the large percentage of Australians who are under-insured? Here’s a simple guide to stage-of-life insurance priorities.

 

You likely have a sense of financial comfort. You’re feeling healthy but are aware that you’re entering an age bracket in which heart attacks, strokes and other serious illnesses can strike.

This is arguably the most important stage for personal insurance, whilst building a retirement fund, paying down a mortgage and supporting children.

Life insurance should be the priority. Also consider a mix of, Income Protection, TPD or Trauma. If you’re self-employed, discuss Business Overheads cover, which looks after fixed operating expenses if you can’t work due to illness or injury.

NEXT: Retiree

1 http://ricewarner.com/rice-warners-latest-underinsurance-research-report/


Disclaimer: Information in this article is based on current regulatory requirements and laws, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its related entities, agents and employees for any loss arising from reliance on this document.

This document contains general advice. It does not take account of your individual objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision.

Insurance priorities for all ages – Life Stage: Family with young children

Are your family, friends or adult children part of the large percentage of Australians who are under-insured? Here’s a simple guide to stage-of-life insurance priorities.

 

Priorities have shifted. You’re making your way up the work ladder but the pressures of a mortgage, a second car and young children are being felt.

What if you were suddenly unable to work? What if an accident or illness meant you were no longer around to help care for your family? How would mortgage repayments and school fees be met? Suggestions for this period include a selection from the previous three covers – Income protection, TPD, and Trauma – as well as Life insurance and Child Cover.

A financial adviser can ensure you are neither over-insured nor under-insured.

Life insurance – pays your beneficiaries a lump sum if you were to pass away.

Child Cover – in summary, child cover will pay a lump sum of to $200,000 in the event of 38 child trauma events, including severe burns.

1 http://ricewarner.com/rice-warners-latest-underinsurance-research-report/

NEXT: Mature couples and singles

http://ricewarner.com/rice-warners-latest-underinsurance-research-report/


Disclaimer: Information in this article is based on current regulatory requirements and laws, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its related entities, agents and employees for any loss arising from reliance on this document.

This document contains general advice. It does not take account of your individual objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision.

Insurance priorities for all ages – Life Stage: Early Career

Reviewing Your Financial Plan

Are your family, friends or adult children part of the large percentage of Australians who are under-insured? Here’s a simple guide to stage-of-life insurance priorities.

 

Research indicates that the majority of Australians are under-insured. Rice Warner’s recent report,1  for instance, said the median level of life insurance for working-age Australians covered only 42% of the financial needs (to maintain their standard of living) of remaining family members.

The first call for insurance advice should be a financial adviser. Here are the areas they are likely to cover.

This is a wonderfully busy and social period, but if you’re unable to work for two or three months, perhaps due to an injury on the ski slopes or an illness, how will you pay the rent or save for a house deposit?

Income protection is essential, plus a choice of TPD or Trauma insurance (explained below) is also recommended. A financial adviser can help figure out exact levels of cover required.

Income protection – covers up to 75% of current income, subject to a waiting period. Premiums may be tax deductible.

Total & permanent disability (TPD) – if you are permanently disabled and cannot work again the insurer pays a pre-agreed lump sum.

Trauma insurance – if you are diagnosed with a particular life-threatening illness covered by the policy, the insurer pays a lump sum.

NEXT WEEK: Family with young children

1 http://ricewarner.com/rice-warners-latest-underinsurance-research-report/


Disclaimer: Information in this article is based on current regulatory requirements and laws, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its related entities, agents and employees for any loss arising from reliance on this document.

This document contains general advice. It does not take account of your individual objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision.

Protecting your income

How does income protection insurance work and what is its value?

Anybody who relies on an income can have their investment plans and their lifestyles derailed by an unexpected absence from work. Income protection insurance can help to cover against such damage by providing cash flow during a prolonged period of illness or injury.

In its most basic form, an income protection insurance policy can help you to receive a percentage of your income for an agreed time period in the event that you must stop work or you can only work in a reduced capacity due to injury or illness.

The income percentage covered in a typical policy is up to 75%. The agreed time period of benefit payments can vary broadly. A benefit period can be chosen of two years, five years, to age 60 or age 65.

The ‘waiting period’ before benefits begin – commonly 30 days to 90 days – can also be chosen in order to customise the cover and the premium. This means that if a person has a certain amount of annual leave or sick leave accrued, they may decide to reduce premiums by delaying insurance payouts until those other sources of income have run their course.

Premiums are generally tax deductible which make them beneficial to hold the policy in the individuals name but many super funds also offer income protection insurance. Importantly, speak with your financial adviser, to ensure your insurance suits your needs, and to determine whether it is more appropriate to be set up within or outside superannuation.

CASE STUDY

Wendy is a single mother who works in an office. Her income is important for paying her mortgage, supporting her young son and investing for the future. After a discussion with her Financial Adviser she decides she would like the maximum income protection cover the chosen policy offers – 75% of her current income until the age of 65. Her adviser recommends, in order to keep her premiums lower, that she investigates the amount of leave she has accrued. This adds up to two weeks of annual leave plus 10 days of sick leave. She also has an emergency savings fund that could cover her living costs for up to two months. By stretching her waiting period out from 30 days to 90 days, her premiums are reduced.


Disclaimer: Information in this article is based on current regulatory requirements and laws, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its related entities, agents and employees for any loss arising from reliance on this document.

This document contains general advice. It does not take account of your individual objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision.

Care when you need it most

Total and permanent disability (TPD) insurance can help pay for care and medical expenses in the event of a sudden serious illness or accident.

None of us can predict the future, and few of us like to think about it – especially when it comes to considering worst case scenarios. In Australia, our overwhelming preference is to take the out of sight/out of mind approach. This has led to 95 per cent of us lacking adequate levels of insurance, according to the Lifewise/Natsem Underinsurance Report. Yet the report also calculates that over the next 10 years more than one million working-age parents with dependents will be affected by death or an illness or accident.

That’s where TPD insurance comes in. It is designed specifically to safeguard against financial hardship from serious illness or accident by providing a lump sum payment that can be used as an income stream to pay off debts, cover medical/rehabilitation expenses and pay for home care. All of these income needs can quickly erode savings and adversely affect your family’s lifestyle choices.

TPD cover came in very handy for Sue and Mike*, a couple raising three children on a single-income of $85,000 per annum. When Mike became a paraplegic last year after a serious car accident, he was unable to return to work as a motor mechanic. Thanks to his TPD insurance cover, he received a benefit of $500,000, which was enough to cover the mortgage, as well as refitting the home and paying for a carer.


What does TPD cover?

TPD insurance can be purchased either as a stand-alone product or within your superannuation. It may also be part of a broader insurance package. It generally covers any medically diagnosed illness or injury that is deemed ‘total and permanent’. In other words, a physical condition or psychological disorder (excluding self-harm) that prevents you from returning to work. Some examples of TPD claims include cancers, skeletal injuries, the loss of limbs and loss of eyesight.

Depending on your circumstances, TPD covers you if you are unable to ever work again in ‘any occupation’. It can also protect you if you can no longer work in your ‘own occupation’. Another type of TPD covers those who are not currently employed but are no longer able to perform two out of five activities of daily living, such as eating or bathing. The ‘own occupation’ definition is not available within superannuation.

Taking out TPD insurance generally involves a risk assessment that will take into account your medical and family history, occupational hazards and lifestyle choices such as smoking and other high-risk activities. Depending on the sum insured, a formal medical assessment (including blood tests and other health reports) may be necessary.

Because TPD cover is intended to protect against loss of income, policies taken out by employed people generally expire once you reach the age of 65. However, people over 65 can generally convert to ‘non-occupational’ TPD cover, which may be held until the age of 80.

Start a conversation

It’s a good idea to have a chat to your financial adviser who can help you to assess your future financial needs if the worst happens and you need to call on your insurance. While you may have life insurance and TPD as a default option as part of your superannuation accounts, it is important to understand what exactly you are covered for and whether it suits your circumstances and requirements. This will ensure that you are protected properly and that you will be financially secure if something happens.

Did you know that you can also purchase TPD insurance for other family members and even friends? That means you can help protect all of your loved ones from financial catastrophe if they’re not in the position to take out their own cover.

CONTACT US FOR MORE INFORMATION


Disclaimer: This article has been prepared by Count Financial Limited ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124.

Information in this article is based on current regulatory requirements and laws, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its related entities, agents and employees for any loss arising from reliance on this document.

This document contains general advice. It does not take account of your individual objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision.

Peace of mind

When life throws a curve ball, it can do major damage to your lifestyle and financial security, or it can be batted away, allowing life to go on as normally as possible, and loved ones to feel the same security that they always did. That is the purpose of personal insurance – it turns a negative experience into a positive outcome.

David saw a financial adviser in 2010, who reviewed his personal insurance cover. David appeared fit and healthy. He was a doctor, so his medical training and experience gave him further reason to be completely confident of a continuation of such good health.

His financial adviser, after conducting an analysis of David and his wife’s current lifestyle and financial status, suggested that David increase the personal insurance cover that he held so that family debts would be covered in case anything was to happen to him. David agreed.

Sadly, two years later David suffered a stroke. He was unable to work during the ensuing period of treatment and is now limited in his ability to work. His reduced salary placed considerable financial strain on his family. But having accepted the advice of financial adviser, David was provided with a substantial financial payout which, he says, gave him “a lot more confidence after a lot of uncertainty in a difficult time”.

David says the support he received from his insurer gave him time to simply focus on his recovery and health, rather than feeling stress about the further implications of his condition. David says that as a doctor, and as a person that has suffered a serious illness, he believes a financial adviser should always raise the topic of personal insurance with clients, and clients should always consider whether their coverage is enough.

If David had not accepted the advice of his financial adviser, he would have faced the reality of needing to sell one of his hard-earned assets, potentially at a price below value, during an awful period of turmoil. Instead he simply relaxed and recovered, and that’s what personal insurance is all about.

Even if you already have life insurance, it’s worth checking with your financial adviser to ensure you have enough coverage if a traumatic event occurred.


 

Disclaimer: This article has been prepared by Count Financial Limited ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124.

Information in this article is based on current regulatory requirements and laws, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its related entities, agents and employees for any loss arising from reliance on this document.

This document contains general advice. It does not take account of your individual objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision.