Your RI Advice partners are so pleased to have formed an important new partnership with the EAN. When we first sat down with Natasha and Jonathan a few months ago to talk about what they were looking for in this partnership, they presented to us an ambition that all EAN members should have the resources they need to make informed decisions about their financial affairs.

With this in mind, we have locked this in as the primary goal of our partnership with you. Informed Decisions. Better Outcomes. You now have somewhere to go if you have any questions about creating and protecting your personal wealth.

We are conscious not to bombard you with too much at once, but in this first newsletter article, we’d like to start by introducing ourselves and outlining the resources we have put together for you and finish off with a short piece explaining some of the ways you can make the most out of your super. It is drawn from our “Smart Strategies for Women” ebook- which can be found on our website

We will have more articles on a range of subjects in subsequent months. They will all build on your knowledge of personal finances and hopefully prompt you to make sure your financial house is all in order.

We hope you get some real value from what we’re putting together. If you have any questions or want to get in touch, please feel free to call our dedicated national contact number for EAN members on 1300 380 880.

So, who are we?
We are a team of individually owned financial planning businesses operating in each state who have joined up for the EAN partnership to ensure you can all access someone local to support you should you need help with money. All of us operate as part of the broader RI Advice Group national network of planning businesses.

Of course, we have all the major cities covered but we want every EAN member to be looked after, so, even if you’re based in a remote or regional area beyond the range of our participating offices, we can put you in touch with someone local from the broader RI Advice network who will be more than happy to help.

Your EAN Resources
We have created a dedicated website for EAN members filled with useful resources and information about money. You can read articles about super (incl. SMSF), investing, growing and protecting your wealth, estate planning and more. We also have a range of financial calculators and links to other useful information.

The website also links to our FREE fun and interactive financial health-check tool. Once you have input some data about yourself, the “Wealth Report” can produce a snapshot report for you. The more data you add, the more comprehensive the report! It’s a great way to see where you really stand financially. Simply click on link and use the special access code provided in our website to get started!

To get to know you all better, we will have our local people attending and hosting as many EAN events nationally as possible throughout the year. We really hope you come up and say hi. (No pressure but if you have a money question to ask, then of course that’s more than OK too!)

Of course, if you have questions or concerns about your money, or have decided it’s time to really take your financial affairs seriously, and need to talk with someone about it, then one of our team of local wealth specialists will be more than happy to discuss your aspirations and work with you to help make them a reality.

So, please feel free to give us a call on 1300 380 880, or complete the contact form on the website and we can put you in touch with your local advice partner.

We have an exciting challenge ahead of us. “For our part, we look forward to meeting and working with you and hope our partnership with the EAN helps ensure you can all confidently make informed decisions about your money.”

Superannuation- A Basic Introduction

Super Adequacy for Women
“Around 90% of women will retire with inadequate savings to fund a comfortable retirement.” (The Association of Superannuation Funds of Australia, ASFA 2015)

Superannuation is something that most people don’t think about enough. The balance starts off small and you can’t access it until you retire, so it’s easy to procrastinate and let “default” super arrangements stay in place. However, your super will likely be your most important source of income in retirement.

Making the most of super every way you can and as early as possible is even more critical for women:

• Statistically, women’s salaries are generally lower in the first place.

• Many women will take time out of the workforce to raise a family and some may only return on a part-time basis or not at all. Your super savings will be greatly affected by time out of the workforce.

• Women generally retire earlier than men do AND have a longer life expectancy – 89 years for women and 86 years for men.

So, for women the need to take control of their superannuation is paramount and the time to act is now. Here are some of the basics of superannuation and a few strategies that may boost your retirement savings.

Investing in super for a comfortable retirement

• Super is a great tax-effective vehicle to build wealth, and it often makes sense to invest as much as you can as early as you can while you are still working. Most Australians fund their retirement from their superannuation.

• Most super funds offer a range of different investment options and asset classes (shares, property, fixed interest and cash), or a combination of these asset classes to suit all types of investor.

• The overall tax paid on your superannuation investment is generally a maximum of 15%- very generous compared to other traditional forms of investing, such as personally held assets which could be taxed as much as 49% (including Medicare levy and Temporary Budget Repair levy).

• Once you reach age 60, the benefits become more compelling, as you’ll generally be able to access your super tax free – a benefit that is hard to surpass!

Choosing a fund that is right for you
Most Australians have a choice of where to put their superannuation, so it’s worth really thinking about your needs and checking out options might give you a better outcome instead of blindly leaving it with your employer’s default superannuation fund.

Before moving from one super fund to another, you should consider your attitude to risk is (conservative, balanced or high growth etc) and investigate what your current superannuation is invested in (shares, property, fixed interest, cash etc). We have more information about these considerations available on our website.

You also need to consider the fund’s investment performance, investment choices, insurance covers and fees – these elements all affect the ultimate balance of your superannuation.

If you are considering switching funds, you should also evaluate all of the above for the new fund as well- especially the availability and your eligibility for the type and level of insurance cover you require.

You may wish to seek help from a financial adviser to ensure you make a decision that is right for you.

Consolidating your superannuation (rolling over) If you have held a number of different jobs over the years, you may have accumulated multiple superannuation accounts. If you’re being charged multiple fixed fees, or paying for multiple insurance covers, this could be costing you money and you may wish to consider consolidating all your super accounts into one.

There are numerous sites that can help you track down any lost super accounts you may have. For example- On onepath.com.au/lostsuper you can search for your lost superannuation for free. (Type in ‘lost superannuation’ in the search box, click on the ‘Go’ button, then select ‘OnePath can help you find your unclaimed super’.)

Consolidating your superannuation can result in your money working harder to increase your retirement savings. You can also keep better track of it and it also means you will be paying only one set of fees.

But remember, before rolling over money from other funds, check and be comfortable with any applicable exit or withdrawal fees. Also check if any benefits, such as insurance, will be lost if you leave that fund. Your main super fund should be able to instruct you on how to complete the necessary transfer forms.

How much superannuation will be enough?
Generally, Australian employers are required to contribute at least 9.5% of your ordinary time earnings to superannuation. Will this be enough for you to live comfortably in retirement? The amount of superannuation you may need depends on your personal circumstances, such as your age at retirement, desired retirement income and estate planning wishes.

To determine if you are on track to reach your retirement savings goal, you will also need to consider the following:

• How much time you have to accumulate your superannuation, especially if you plan to take time out of the workforce

• The cost of living and effects of inflation in the future

• The increase in life expectancies meaning a longer retirement period

• Your attitude to risk and return

• How much you have already saved for your retirement

• If you have dependants to consider

• Any other investments you may have

• The type of lifestyle you wish to have in retirement.

The earlier you put a considered super strategy in place, the more chance you have of achieving your target at retirement. Of course, you may wish to talk with a professional about such important long-term planning.

Superannuation boosting strategies
Pre-Tax Contributions (Salary sacrifice) - Salary sacrifice is when you contribute part of your pre-tax income into your superannuation fund and is a powerful way to grow your superannuation balance-especially in your younger years when the power of compounding interest is greater.

As well as exponentially boosting your super balance over time, this strategy may also reduce the income tax you pay. Working out whether salary sacrifice is right for you will depend on how much you earn and your personal circumstances.

From July 2017, you can also make personal pre-tax contributions to super as an alternate to salary sacrifice via your employer. The total amount that may be contributed by employer Super Guarantee, employer (salary Sacrifice) and personal (pre-tax) contributions is currently capped at $25,000 pa. These contribution types are all taxed at 15% upon entry into the fund.

If you decide a salary sacrifice strategy might be worthwhile, you will need to make the necessary arrangements with your employer (if available) on the how much of your future salary you wish to sacrifice.

Salary sacrifice (and now personal pre-tax deductions) are important strategies to consider regardless of whether you plan on having a family or taking a career break.

Post-Tax Contributions- It is also possible to make contributions to super on an after-tax basis. No tax deduction is claimed for the contribution and no contributions tax is payable. It simple adds to your super balance and grows from there.

For most people, the limit (2017-2018) on this type of contribution is currently $100,000 pa or $300,000 over a 3-year period, but restrictions now may apply if you have made previous similar contributions or you have a significant balance already in super (over $1.4M).

Whilst your contribution will enjoy highly favourable tax treatment, as with all super contributions, you should also be mindful that your super is generally preserved in super until retirement age, so you need to carefully consider whether those funds might be needed for something else prior to retirement.

Both pre-tax and post-tax contribution limit rules can be tricky and, particularly if you’re planning to maximise your contributions, you should certainly seek advice before committing to a contribution strategy.

Government superannuation co-contribution scheme
If you or your partner are eligible for a Government co-contribution, this is another smart way to help boost your super balance. Under the scheme, those earning a total income of $36,813 or less (2017-18), and meeting work-related eligibility criteria, the Government will contribute $0.50 for each after-tax dollar you contribute, up to a maximum co-contribution of $500.

The Government co-contribution amount reduces if you earn more than $36,813 and cuts off for those earning a total income of $51,813 or more. This is a great incentive for you to put a little extra money towards your superannuation.

Spouse contributions
A spouse can make post-tax contributions into their partner’s account, regardless of income. They may be eligible for a tax offset of 18% on up to the first $3,000 of spouse contributions, a maximum tax offset of $540 if the partner has a low income. This tax offset reduces once the second spouse’s income reaches $10,800 and cuts out once income reaches $13,800.

This strategy is particularly relevant for women who plan to take time out of work to have a family for example. You can still build a super nest egg with the help of your spouse’s contributions into your super account.

Contributions splitting
Couples may be able to split their superannuation contributions. This means couples can transfer certain contributions from one spouse’s account to the other’s account. Some of the main benefits of contributions splitting are:

• When there is an age gap between members of a couple- you may be able to access your super earlier

• Equalising super between partners. With new limits to how much super (pension) money one can have in retirement, having similar balances will enable couples to maximise the tax benefits of super in retirement.

• Super splitting may also be useful and a tax effective way of funding life insurance.

If you would like to know more about any of the information provided above, please feel free to go to our EAN member website or call us on 1300 380 880.