How much do I need to Set up a Self Managed Super Fund?

If you want to start a Self Managed Superannuation Fund (SMSF) the Australian Securities and Investment Commission (ASIC) recommends a minimum fund balance of $200,000. Less than this can be considered as not cost effective.

This is also dependent on your circumstances and objectives, as you should still consider setting up a SMSF with less than $200,000 if:

  • You are willing to do the administration and manage the investments yourself which will keep the running costs down.
  • You will be making contributions to quickly bring the balance to $200,000.
  • You have a large asset like a business property, an inheritance or funds in another fund that will be transferred into the fund quickly.
  • You want flexibility and/or control of your superannuation.

Some of the flexibility and control that attracts people to a SMSF include:

  • Greater control of your investments.
  • Ability to pool funds with up to three other individuals.
  • Effective tax management.
  • Retirement and estate planning flexibility.
  • Capacity to purchase a large asset e.g. property.

It also gets you actively involved with your superannuation and more focused on your end game.

What should you do now?

For most people, getting started is the hardest step. Here are a few actions that you can take today:

 

 

 

Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686).

 

 

Financial Implications of your Downsizing Journey

Dealing with complex financial decisions can be overwhelming.
How can you ensure you have the right financial advisor to help you?


 

 

 

 

 

 

 

 

 

 

 

 

Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686).

How to Build your Retirement Dream

What do you want your future to look like?

Whether you want to start that hobby you have always wanted to start, travel the world, or just simply spend more time with your family, understanding the best ways to invest and how is essential so that you can secure the future you want.

In this 7 part series of short informative videos, Michelle Griffiths covers a variety of areas surrounding what retirement means for you, and how to get the future that you want.

We hope you find this video series valuable!

Part 1 – Will I have enough to retire?
Michelle talks about different scenarios surrounding building your Super and the important questions to consider.

Part 2 – Why Superannuation is Good for your Retirement
Michelle explains the power of Superannuation as a retirement vehicle.

Part 3 – Are SMSF Worthwhile and When?
There are many options other than Self Managed Super Funds that can support you in building your financial future. Michelle discusses the pros and cons to help you make the best decision.

Part 4 – How to Build up my Super Balance?
In this installment, Michelle talks wealth creation strategies that can help build your Super balance and secure your financial future.

Part 5 – Mortgage v Super – What is Best?
Mortgage v Salary Sacrifice in Super- there is no right or wrong answer as to which one is best. In Part 5 Michelle talks about things to consider surrounding this issue and the impact it can have.

Part 6 – Pre-Retirement Strategies to Suit You
It is never too early to start putting strategies in place for you and your family. Generally, pre-retirement strategies ae used by anyone 50+. Michelle discusses these important strategies that you should think about.

Part 7 – How to Evaluate Good Advice
Michelle discusses evaluating and utilising the good advice you receive.

 

 

 

 

 

 

 

 

 

 

Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686).

New Financial Year – New Financial You

What does your financial future look like? As we begin a new financial year, now is the time to ask yourself what you want and how you can get it.

In this video, Michelle Griffiths talks about the importance of securing your financial future, discusses how we can assist you in answering your burning questions and help you take the necessary steps towards a secure financial future.

What should you do now?

For most people, getting started is the hardest step. Here are a few actions that you can take today:

 

 

 

Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686).

How much Insurance is enough?

Like it or hate it, insurances are a necessary part of life. Given the risks involved when owning a house, driving a car, playing sport or running a business, insurance is the mechanism for protecting your financial interests against loss or damage. Just as people insure their material possessions, there is nothing more valuable than life itself and the income needed to live life.

When assessing the level of cover required, consideration must be given to such factors as (this list is not exhaustive):

• Level of income
• Income needs and desired lifestyle
• Large expenses – private school fees
• Other ongoing childcare costs
• Investment Assets
• Debts – mortgages, credit cards, etc
• Cost of refitting a house to accommodate a wheelchair

The ASIC Money Smart website has a great Life Insurance Needs Calculator .

What to do now?

 

 

Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686).

 

 

 

Be the best SMSF Trustee – and benefit your retirement

A Self Managed Super Fund (SMSF) can help you focus on having the funds to maintain a good lifestyle in retirement.

When you set up a SMSF you become the trustee of your SMSF. You can have the fund’s technical aspects handled by qualified experts, but you are still the ultimate boss!  Yes, you are the head of the Board when it comes to running your SMSF and the regulators are making it very clear – ignorance is no excuse. 

You don’t need to fear this if you:

Have the advice of experts
Make sure you have a super adviser. At TAG, our advisers are superannuation specialists. We provide professional development to the accounting industry via our annual superannuation seminar. TAG Super Seminar is Australia’s longest running and most successful superannuation seminar and is designed to help financial advisers keep up to date with superannuation changes.

Ask questions
Our advisers meet with every Trustee on an annual basis, which gives the Trustee a great opportunity to understand and ask questions about their specific situation.

Understand your responsibilities
TAG offers all Trustees of the funds we administer complimentary Trustee Training, which explains your role and responsibilities.

How do you make this happen?
Come along to our next Trustee Training to ensure you are the best Trustee you can be and optimise your retirement.

Tuesday 18th June, 6-7pm. REGISTER HERE

 

Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686).

10 Investment Principles for Success

At TAG, we don’t believe in get rich quick schemes and we don’t have magical investment formulas. Our 10 investment principles are based on years of experience and successful implementation which we use for ourselves and with our clients.

1. Have a plan and set some goals

2. Establish your timeframe

3. Determine your tolerance to risk

4. Focus on quality and be patient

5. Resist the temptation to follow the herd

6. Invest regularly

7. Understand your cash flows

8. Never over commit with investments

9. Do something, as soon as you can

10. Get advice

What Should You Do Now?

For most people, getting started is the hardest step. Here are a few actions that you can take today:

 

If you have any questions, please don’t hesitate to contact me or your adviser.

Leigh Jobling, CPA
Partner, Investment Advisory & Wealth
TAG Financial Services

 

Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686).

 

Single Touch Payroll (STP) – Action Needed

#TAGBetterBusiness

Single Touch Payroll (STP) is a new regulation that changes how businesses report tax and super information to the Australian Tax Office (ATO). Previously, businesses could report this information once a year but now need to report each time they run their payroll.

Software providers (like MYOB or Xero) can tell you about the STP solution that they offer.

For small employers, with 19 or less employees, need to report through STP from 1 July 2019. Large employers, with 20 or more employees should now be reporting through STP.

For more information, go to: https://www.ato.gov.au/Business/Single-Touch-Payroll/

If you are unsure whether you comply with STP, please contact your TAG Adviser.

Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686).

Cancellation of Insurance in Super

#SuperTips

There are new rules around insurance in Superannuation Funds. From 1 July 2019, Superannuation Funds will cancel insurance on accounts that have not received contributions for at least 16 months. Your Fund will contact you if the insurance is about to end and ask whether you would like to continue.

Before cancelling your insurance, think about the benefits of keeping insurance through your superannuation:
• Your superannuation fund will get a tax deduction for the premiums – making it less expensive.
• You can have the cover you need, even when your budget is tight.
• It’s easy to manage as premiums are automatically deducted.
• Sometimes you will be accepted for cover without requiring a health check.
• You can generally choose the amount you are covered for.

Insurance is one of those things you pay for but never want to use and it can seem expensive. You would not drive your car around if it wasn’t insured, so you should carefully consider if you are not insuring you!

If you have any questions about your insurance, please contact your TAG Adviser.

Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686).

Woolworths Group Limited Buy-Back 2019

On April 1, Woolworths Group (WOW) announced it was undertaking a $1.7 billion off-market buyback that would complete by Friday May 24 2019. Offers to participate are open from Tuesday April 16 2019, until Friday May 24 2019. If you own WOW shares you should have recently received in the mail an offer to participate in the buy-back of WOW shares.

The offer is to buy the shares back off you at a discount to the market price, WOW is attempting to buyback the shares at the lowest possible price.

So why would a shareholder agree to sell at a lower price than you would get on the market? The incentive is that of the price received, $4.79 is capital component and the balance being a fully franked dividend. With the upcoming election bringing with it a possible threat to future benefit of franking credits, this might be a good opportunity for you.

The transaction may also create a capital loss which can be used to offset capital gains you may have, or think you may create, on the sale of other investments in this 2018/19 or future financial years.

For WOW shareholders on the lowest tax rate (or 0%) or who have a SMSF (either 15% or 0% tax rate) this could be worth considering. If you would like TAG Financials Services to work out the implications based on your current situation please call Leigh Jobling or Arden Shaw on 03 9886 0800. We can calculate the cost/benefit for you to assist you to make an informed decision.

If you sell your shares, but ultimately wanted to maintain your holding of WOW long term, you would need to re-buy them on market, which would incur a trading cost including brokerage.

Buy Back Discount

The Buy-Back will be conducted through a tender process. Eligible Shareholders who choose to participate can offer to sell some or all of their Shares to WOW:

  • at a discount between 10% to 14% of the Market Price.  The Market Price will be determined based on the average price across the 5 trading days prior to the close of trading on Friday 24th May 2019,
  • at the Buy-Back Price, which is an election to sell your Shares at the price determined by WOW following completion of the tender process, or
  • you can also nominate a Minimum Price below which you are not willing to sell any of your Shares.

Your Options

  1. Do nothing and keep your WOW shares.
  2. Participate in the Buy-Back, with all or part of your holding – you need to take action to participate.

If you do participate and want to retain the same holding as now, once the buy back is complete, you will need to purchase the shares back on market at the prevailing market price.

Based on similar buy-backs recently we expect that the buy-back will be heavily oversubscribed and thus investors would be likely subject to potentially large scale-back. If you own less than 180 shares you must offer them ALL to be bought back by WOW. If you own more than 180 shares and the buy back is scaled back and you are left with less than 65 shares they will buy the remainder of those shares as well.

We have analysed the value of the buy-back for those with a 0% tax rate using the closing market price of Woolworths on April 1 of $31.08 – see Chart 1 below. Using $31.08 as a guide and assuming the maximum 14% discount applies, this equates to a $26.73 buy-back price. With the capital component being $4.79, the other $21.94 would represent a fully franked dividend, which would have a $9.40 franking credit attached. For a tax-exempt Australian investor, we estimate the buy-back at a 14% discount would be worth approximately $36.13 (disregarding the time value of money), representing about $5.05 per share benefit or 16% more than the market price of WOW on April 1 2019.

 

Using these assumptions, if you sold say 1000 shares in the buy-back as opposed to on market, that had an assumed cost base of $20.00 per share:

  • 0% tax rate: $5.05 per share or $5,050 BETTER OFF.
    Brokerage to buy-back the 1,000 shares would reduce the gain. The capital loss may not be useful if you have a super fund 100% in “pension mode” or have 0% personal tax rate.
  • At 15% tax rate: $0.35 per share or $350 BETTER OFF.
    You would also have a $10,860 capital loss available to offset against any current or future gains. Brokerage to buy-back the 1,000 shares would be an additional cost.
  • At 39% tax rate: $7.17 per share or $7017 WORSE OFF.
    You would have a $10,860 capital losses available to offset against any current or future gains. Brokerage to buy-back the 1000 shares would be an additional cost.

Naturally if you have more or less shares, or WOW scale back the buy-back more or less than expected, this would vary the outcome to you.

In all of the above examples if you chose to repurchase the shares, brokerage would be an additional cost. You would however have the benefit of a higher cost base carried forward.

If you choose to re-purchase, you may be better or worse off depending on movement in the share price.

Note

  • The 15% tax rate applies to a super fund which is NOT paying pensions to the members of the fund.
  • The 0% tax rate applies to funds that ARE in “full pension phase” – subject to $1.6m pension caps.
  • If gains are made on assets held less than 12 months and the capital losses are used, the tax benefit of the losses would be greater.

The price you receive is unknown at the time you complete your form.

More Information

If you are interested, believe there are other benefits to you or would like further information, please do not hesitate to contact us.

If you receive investment advice from another adviser (e.g. a stock broker), we encourage you to contact them.

If you wish to participate in the buy-back, you need to follow the instruction on the letter you received.  You can submit your tender online, or download the tender form – to be completed and returned to the share registry by 5.00pm Friday 24th May 2019.  We suggest you take the necessary action well in advance.

If TAG provide you with investment advice, we need to know your intentions by Friday 17th May 2019.

Should you have any queries, please do not hesitate to contact Leigh Jobling or Arden Shaw on 03 9886 0800.

 

Disclaimer:   This is general information only and is not advice to participate in the WOW buy-back, or to buy hold or sell any shares in WOW, as we have not taken your personal circumstances into account. Whether participating in the buy-back is appropriate for you will depend on your personal circumstances and we encourage you to seek advice before acting on this information.  If TAG Financial Services are your investment advisers we welcome your call.  If you use your own share broker, you should speak with them, or we would be pleased to discuss the mechanics of the buy-back with you. There are numerous different options for participating in the buy-back, however we have only selected one for illustrative purposes only.

Tax Planning for Individuals and Businesses

As the end of financial year approaches, it is important that you take the time to focus on tax planning and tax issues that affect you before 30 June 2019 arrives.

We have outlined some of the key tax considerations in our Tax Planning information sheets. Click on the following links to download these:

Tax Planning for Businesses – 2019

Tax Planning for Individuals – 2019 

Should you require further information or assistance in tax planning, please contact your TAG adviser on 03 9886 0800.

Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686).

Estate Planning – Do You Need an Estate Plan?

Most people believe Estate Planning is for the wealthy. But the issues don’t discriminate, and the concerns are often the same for everyone;

  • Who will get my money when I die?
  • Do I own everything / how much of my wealth is part of my estate?
  • Do I want assets to pass to specific people?
  • What are the specific tax time bombs and how do they impact my beneficiaries?
  • How do I ensure my wealth passes to my children and grandchildren, and is not exposed to family disputes?
  • How can I protect my beneficiaries from themselves, for example drug/alcohol dependencies or poor decision making?
  • How to manage family / relationship issues when considering Estate Planning.

Half of the country do not have a Will. Most people believe that everything will be OK, and while we may have that expectation, often we see the impact of unresolved or unclear intentions when beneficiaries have a financial windfall in place.

 What is an Estate Plan?

An Estate Plan is a clear, plain-English practical approach to deal with the above issues. The Estate Plan can then be used to facilitate the legal document e.g. a Will, to ensure your intentions can be followed with minimal disruptions.

For more information on Estate Planning, register and come along to our May Information Session – Where there’s a Will, there’s a Way. 

Alternatively, if you have a question, contact Jason Roccasalvo or Brenda Hutchinson.