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Frequently Asked Questions
Can I hold insurance through my DIY super fund?
Holding insurance though your DIY super fund is possible and can play a key role in your estate planning arrangements. Due to the complex regulations surrounding DIY funds, professional advice will help here.
We can review your overall financial situation, commitments and lifestyle to help you decide on an adequate level of insurance cove and whether to hold insurance inside super, outside super or to hold a combination of both.
Can I use my super to pay for your services?
Yes, depending on your situation, some of our fees can be charged from your super. We can work this out in your initial cost-free, obligation free meeting.
How does superannuation work?
Superannuation is a lifetime investment and can dramatically change the outcome of your retiement. Your super account helps you save money so you can build a comfortable retirement. Money can be put in your super account from several sources, including yourself, your employer, spouse or the Federal Government. There are a number of things you can do to maximise and use your super, such as investing from your super, receiving bonus government contributions and getting cheaper insurance.
How do I plan my retirement?
Creating a successful retirement plan takes careful preparation and knowledge. The steps you should generally follow include identifying exactly what you want, evaluating your current financial position, setting clear goals and implementing practical strategies, actions and investments to meet these goals.
How much do I need to retire?
Retirement planning and the amount of finance you will need is dependent upon you. What costs will you need to cover? Basic living, social activities, hobbies, travel? When you retire, you live the life you can afford, and that depends on your planning. The Association of Superannuation Funds of Australia outlines general benchmarks for comfortable or modest living in Australia once retired. See our detailed guide here.
To calculate the amount you will need to live your desired life after work you might like to consult with a financial advisor.
When is tax due?
Your tax return needs to be completed by the 31st October each year.
How much super do I need?
People may assume that the super contributions from employers is enough, but in some cases it isn’t. The amount of super needed really depends on the individual and the type of lifestyle they seek. According to the ASFA Retirement Standard, to retire modestly as a couple you will need a lump sum of $431,000 and to retire comfortably you will need $744,000. Single people, on the other hand, need a lump sum of approximately $300,000 for a modest retirement and $544,000 for a comfortable retirement. A financial advisor will help you determine how much you need for your particular circumstances and formulate a practical plan for reaching your target.
How will insurance benefits be paid?
If you make a successful insurance claim through a policy held through your super fund, the insurer will pay your benefits to the super fund’s trustee. As super funds have different rules and restrictions, it’s worthwhile checking with your fund as to how any insurance benefits would be paid to you or your beneficiaries from the trustee. Different policies may also have different restrictions.
What do you need for a tax return?
To complete your tax return you will need a range of documents including your tax file number, payment summaries, EFT details, financial documents and records. If you’re unsure or need help with your tax return, our team can talk you through exactly what you need and make sure you don’t miss anything.
How do you reduce your tax?
If you are entitled to tax deductions or tax offsets you may be able to reduce your tax. Tax deductions are applied before tax is calculated, while tax offsets are applied after tax has been calculated. You may be entitled to tax deductions on work-related expenses, charity donations, self-education expenses and cost of managing your tax (e.g. hiring an advisor). Tax offsets are applicable to low income earners, taxpayers with a dependent relative, senior Australians and pensioners, the taxable part of your superannuation income stream and net medical expenses over a certain amount. Medium and high income earners can also reduce tax through salary sacrificing – when you put a sum of your pre-tax income towards a benefit before tax. For more information feel free to give us a call.
What do I need to do when I establish self-managed superannuation?
When you set up a self-managed super fund you need to:
- Carry out the role of trustee, which imposes important legal duties on you.
- Use the money only to provide retirement benefits.
- Set and follow an investment strategy that ensures the fund is likely to meet your retirement needs.
- Keep comprehensive records and arrange annual finanical returns and complete audit by a qualified auditor.
- And, don’t forget to purchase separate life insurance coverage if you have a self-managed super fund.
What do I need to run a self-managed super fund?
You will generally need:
- There is much mis-information about how much you actually need in super to commence a SMSF. The answer is it really depends on the strategies agreed on for your SMSF and contributions being made. Speak to us further if you think an SMSF is right for you.
- To anticipate ongoing expenses such as professional accounting, tax and legal advice.
- Plenty of time to manage the fund.
- Financial experience and skills.
- Separate life insurance, including income protection and total and permanent disability cover.
When can I claim my superannuation?
To claim your superannuation you are required by law to wait until you have reached a certain age (usually between 55 and 60 depending on your circumstances).
Who will receive my life insurance benefits and inherit my super?
Under superannuation law, if you die, your super balance and any life insurance benefits can generally be paid to your estate or certain individuals only, such as a spouse or someone who is financially dependent on you. You must nominate this person through your super fund provider. As your super benefits could be worth a significant part of your estate, it’s worth reviewing your nomination every three years to ensure it’s still up to date.
Why choose My Wealth Solutions to help plan my retirement?
My Wealth Solutions is made up of an experienced team who listen to what you want and help you plan a retirement you can enjoy. In your initial free meeting with us, we will help you reach clarity about your goals and understand what your plan will involve. See what some of our clients have had to say about their experience with us.
Once you decide to pursue a retirement plan with us we will work with you every step of the way to help you establish, move towards and reach your goals.
Will my super savings be impacted?
If you are not making regular tax-effective contributions into your super fund, the cost of insurance premiums may erode your super over time.
Will my tax position be impacted?
Your decision to hold insurance inside or outside of super may depend on your tax position. As the super environment is tax-effective, you may be able to put strategies in place that will help pay insurance premiums and improve your overall tax position. However, the cost of Income Protection cover held outside of super is tax-deductible. It may be worthwhile speaking to us about what the best strategy is for your own situation.