When you run your own business a good retirement plan can bring real peace of mind. Read more about your options – and why it’s never too early to start.

Planning your retirement

When you’re busy running your own business retiring could be the last thing on your mind. But planning your retirement well in advance can make it easier to enjoy the future you want.

Will you sell your business?

Many business owners plan to sell their business to fund their retirement – but it’s important to be realistic. It isn’t always easy to find a buyer who’s prepared to pay the price you want, particularly if you’re hoping for a quick sale. And, even if you intend to keep on working well beyond retirement age, unforeseen circumstances such as poor health or a change in market conditions could force your hand, so it’s important to be prepared.

Allow plenty of time

If possible, you should give yourself at least three years to plan for the sale of your business. Most buyers will want to see three years of financial statements and you’ll also need time to work on increasing the value of your business. This could include everything from keeping your equipment up to date and making sure your premises are always clean and well-maintained to boosting your sales with a strong online presence. Remember that a buyer is investing in the future of the business so they’ll want to see positive yet realistic forecasts.

In the meantime, it’s also important to protect your business with the right insurance. Appropriate Income Protection, Total and Permanent Disability (TPD), Trauma and Business Expenses insurance can help prevent debt from accumulating if you’re unable to work and enable you to pay someone to keep your business up and running if you can’t.

Succession planning

Passing your business on to a family member or employee may sound straightforward but, again, you should allow plenty of time to work through the process and clarify all the details. For example, do you intend to retain any interest in the business? Who will own any property, such as the business premises? And, if your successor plans to buy the business from you, can you be sure they’ll have access to the money when you want it?

A good succession plan will cover all this and more to ensure you can make the transition with minimum disruption and maximum benefit. And it’s important to talk to a professional adviser about how you can best structure your business to protect your assets and minimise tax.

Saving money for retirement

Personal superannuation isn’t compulsory for small business owners so you might be tempted to put investing in your business ahead of your savings. This can be risky as there’s no guarantee your business alone will provide enough money for you to live comfortably in retirement.

Building your business and your superannuation investment simultaneously can help to mitigate the risk. Many business owners choose a self-managed superannuation fund (SMSF) as this may provide benefits such as a lower tax rate, more investment options and flexibility when it comes to drawing an income. However, a SMSF isn’t right for everyone so you need to discuss your strategy with a professional adviser.

Planning to live longer

In general, Australians are living longer, which means you could spend decades in retirement. Ideally, you’ll have enough savings to cover your expenses well into your nineties.

Financial security in retirement could underpin many of the decisions you make about your business so it’s important to think about the lifestyle you want. As a general rule, if you own your own home, you’ll need 70-80 per cent of your pre-retirement income to maintain the same standard of living. The age pension and other government supplements provide a safety net but, at the moment, these are set at about 28 per cent of the average wage, and this is very unlikely to increase.

The most successful retirement planning is long term. Your spending and your needs are sure to change as your retirement progresses so your plan must be adaptable enough to evolve. And it’s never too early to take action. Once you have your retirement goal in mind you can work out the steps that will help you take control of your retirement and enjoy the lifestyle you want.

Source: NAB

Reproduced with permission of National Australia Bank (‘NAB’). This article was originally published at https://www.nab.com.au/business/small-business/moments/future/planning

National Australia Bank Limited. ABN 12 004 044 937 AFSL and Australian Credit Licence 230686. The information contained in this article is intended to be of a general nature only. Any advice contained in this article has been prepared without taking into account your objectives, financial situation or needs. Before acting on any advice on this website, NAB recommends that you consider whether it is appropriate for your circumstances.

© 2023 National Australia Bank Limited (“”NAB””). All rights reserved.

Important:

Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.”

As a home owner with a mortgage, chances are you’ve heard of the term ‘refinancing’. Refinancing involves reviewing your current mortgage, and potentially swapping your loan to another lender who can better meet your current needs, wants and circumstances.

Refinancing can also allow you to consolidate your debts or pay down your mortgage more quickly.

Another common reason borrowers look to refinance is so that they can access equity – the amount you’d get from selling your home after settling any associated loans, such as a mortgage on that property, and any other costs associated with the property. Depending on that amount, you may be able to access equity in the property without having to sell it, for example, to make home renovations or to buy an investment property.

However, refinancing is not suited to everyone. There are many different factors you will need to consider when thinking about refinancing a loan. 

So how will you know that refinancing is the right option for you?

The first step is to speak to a professional, such as a finance broker, about your needs and whether you can afford a different loan structure or other change to your mortgage, particularly if you have more than one property.

Before you initiate an application to refinance, your broker will need to assess your needs and objectives as well as your current financial situation.

Are you looking to pay less interest?

Some people are savvy researchers and will want to take advantage of a lower interest rate from another lender should that be available to reduce repayments. If you aim for a lower interest rate, this could potentially save you a lot of money in the long term.

While saving money is often one of the biggest benefits of refinancing, it may not be as straightforward as that and careful consideration is required.

At this point, your broker will need to find out about your existing loan, repayments and current loan structure. They’ll also need to find out more about your current financial situation, including your income, any other current debts and about any assets you own.

The current value of the property is also taken into consideration, so your broker will have access to current data that will indicate what your property is likely to be worth.

Your broker will then review the various loan options and figure out whether it’s worth it for you to refinance. Sometimes it’s not worth it if it’s only going to save a couple of hundred dollars a year, particularly when you take into consideration the exit and application fees involved. But if it’s going to save upward of $1,000 a year, refinancing might be a sensible approach.

In some cases, your broker can tell you if getting a lower interest rate from your current lender can be achieved without refinancing.

Do you want to change your loan type?

One of the risks of refinancing your home loan is that you may need to pay Lender’s Mortgage Insurance (LMI)* to your new lender if the loan exceeds 80% of the value of the property. If switching your loan means you will need to pay LMI again, it may not be worth refinancing.

If you do decide to go down the refinancing path, working with a broker rather than going straight to a lender has advantages. Brokers have access to loan options from a range of different lenders (34 on average), and if there’s a better opportunity for you, they’re usually able to access it.

It is important to consider that when you take up a new home loan, it can incur exit fees and may not have all the features your existing home loan has.

Have your circumstances changed?

If you had a recent major life change such as a loss of income or a change in marital status, you might be looking to refinance.

If you want to refinance to lower lending costs to help you manage your monthly repayments, speak to us and we can negotiate with your current lender for a rate suitable to your current situation.

We can also help you look at alternate options to consolidate your personal loans and credit cards into the one loan. This could help you in lowering your monthly repayments, or help you keep your repayments on time and even save you interest in the long-term.  

*LMI protects the lender against potential loss. 

Source: MFAA

Reproduced with the permission of the Mortgage and Finance Association of Australia (MFAA)

Important:

This provides general information and hasn’t taken your circumstances into account.  It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.  Past performance is not a reliable guide to future returns.

Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author.

Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

What’s a debt consolidation loan?

A debt consolidation loan is a way to combine all your debts – credit card, personal loans, store card etc. – into one loan so you’ll be making repayments in one place.

It means that you can take a breath and take back some control. It also means no multiple annual fees, and one regular repayment, with one interest rate.

Interested to know what it could look like for you? A debt consolidation calculator is a fantastic tool that can show you how much your minimum repayments – and monthly interest – can change.

Benefits of debt consolidation

Having one debt consolidation loan usually outweighs the benefits of having a heap of little debts.

• One loan’s much easier to manage than multiple loans or cards across multiple providers – just one recurring repayment, with a single interest rate.

• One loan means setting up a repayment plan is easy. You’ll have greater control of your budget, and you’ll have a better idea of when you’ll be debt free.

• Having one, easy-to-manage debt is a good way to improve your credit rating.

• It can save you money, either by having less interest or fewer fees to pay (or both).¹

Things to consider

While there are several benefits to consolidating your debt, there’s a few things that you should keep in mind.

• If you switch to a loan with a longer term, even if the interest rate is lower, you may end up paying more in interest and fees.

• Paying off your debt quickly is important but having a budget you can manage and stick to is as well.

• Consider having your repayments due right after your pay day to help manage your budget and give you peace of mind.

How do I consolidate my debts?

While it’s a straightforward process, you should do some homework before you apply.

1. Note down the amount owed, current repayment, and repayment frequency of each debt.

2. Use this debt consolidation calculator to see how much your new loan repayment may change for different loan terms and repayment periods.

3. Consider taking out a new personal loan to combine the debt you currently have.

4. Once you’ve consolidated your debts, this is the time to review your finances and get on top of them.

Feel free to contact us if you have any questions.

1 For the loan purpose of debt consolidation or refinance, to ensure this product meets your needs and objectives, please visit your nearest NAB branch if you intend to use the funds:

• to free up some cash by reducing the amount of regular debt repayments

• to take advantage of a good deal with our lower rate and/or fees.

Source: NAB

Reproduced with permission of National Australia Bank (‘NAB’). This article was originally published at https://www.nab.com.au/personal/life-moments/manage-money/manage-debt/consolidation

National Australia Bank Limited. ABN 12 004 044 937 AFSL and Australian Credit Licence 230686. The information contained in this article is intended to be of a general nature only. Any advice contained in this article has been prepared without taking into account your objectives, financial situation or needs. Before acting on any advice on this website, NAB recommends that you consider whether it is appropriate for your circumstances.

© 2023 National Australia Bank Limited (“”NAB””). All rights reserved.

Important:

Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.”

Find out how to save money every day and make a savings plan to stay on track.

Separate and automate your savings

An online savings account is a great way to grow your money faster. Unlike a transaction account, you can’t spend money directly from a savings account, so it’s harder to dip into your savings.

Automate your savings

Transfer part of your pay into your savings account. You can ask your employer to do this for you or you can set up a direct debit. This way, you’re saving without even having to think about it.

Round-up transactions

Some savings accounts or apps let you round-up your daily transactions to the nearest $1 or $5. The change then goes directly into your savings account.

For example, James buys a coffee before work each morning:

• The coffee costs $4.20.

• His account is debited $5.

• 80 cents goes straight into his online savings account.

After a year, James will save more than $200.

Look for ways to reduce spending

Look at your expenses to see where you can make changes or get a better deal. It may surprise you how little things add up.

Find quick wins

Look through your bank or credit card statements for the last two months. Identify anything that isn’t essential. This could be things like subscriptions or memberships.

Reduce your grocery bills

To reduce your grocery bills:

• Plan ahead – plan meals weekly (including lunches and snacks). Stick to your shopping list, so you only buy what you need.

• Buy on special – look for cheaper home or own brands. Buy frozen vegetables as they’re nutritious and may cost less than fresh.

• Compare unit prices – look at the unit price (e.g. price per 100g) under the main price. This makes it easier to compare the price and value of similar products so you can see where you get best value for money.

• Go seasonal – save by buying fruit and vegetables in season, shop at your local fresh markets or grocers.

• Eat less meat – meat can be expensive so try to buy when marked down at end of day. Plan some meat-free meals.

• Buy in bulk – buy staples (like rice, oats, flour) when marked down. Or buy bulk amounts with your neighbours or friends.

• Grow it yourself – get your family involved in making a herb or vegetable garden together.

Reduce your electricity bills

To reduce your electricity consumption and your bill:

• Heating and cooling – only heat or cool the room you’re using rather than the whole house. Open or close the blinds to help control the temperature inside. Block draughts to avoid leaking heat (for example, put a door snake at the bottom of a door).

• Laundry – run your washing machine with a full load and use cold water in your machine when possible.

• Appliances – use energy-efficient appliances or lights if you can. Try to use appliances outside peak times when tariffs are lower (check your bill to find when it’s cheaper). Adjust temperature settings on air conditioners to the most efficient level.

• Turn off when not in use – turn off your ‘vampire appliances’ at the wall so they don’t use energy when not in use. These include gaming consoles, any appliance with a ‘standby mode’, and phones that are at 100% charge.

Swap to cheaper alternatives

• Gym memberships – look for no-cost classes or running groups in your local area. Or try free online workout videos or fitness challenges.

• Streaming services – look for free streaming channels or apps.

• Food delivery services – delete the app and try recreating a take-out meal yourself at a lower cost.

• Eating out – instead of eating at a restaurant, have a picnic or BBQ at the beach, park or someone’s house.

• Holidays – consider holidays with no air travel, like camping or day trips from home.

• Transport – look at car-pooling, or ride your bike instead of taking public transport.

Shop around for better deals

• Electricity – compare energy suppliers to make sure you’re getting the best deal. Use the Government’s Energy Made Easy website. Or Victorian Energy Compare, if you’re in Victoria.

• Insurance – when it’s time to renew your insurance, compare premiums with other providers. You could get a discount if your policies are grouped together. Or you may be offered an incentive to stay with your current insurer. For tips see choosing car insurance or home insurance.

• Internet and phone – review your monthly usage over a 12-month period and look for a plan that suits your needs. You could be paying for more than you use, so there may be cheaper options. Or your provider could offer you an incentive to stay, which may be a better deal.

Have a savings plan

The secret to saving is to start early and save often. Create a savings plan so you can manage your money and stick to your goal.

Know where your money is going

Have a clear picture of your regular expenses and spending habits. This helps you see where you can cut back and save. See track your spending for practical ways to get started.

Start a budget

Once you know how you’re spending your money, you can set a realistic budget. Your budget will help you to stay on track, review your progress and reach your money goals sooner.

See how to do a budget to get started.

Set a savings goal

Setting a savings goal helps you stay focused. It doesn’t matter how big or small your goal is, work out how much money you need and make a start.

Pay off some debt

If you can, make extra repayments towards any credit card debt or loans you have. Paying off your debts sooner can save you thousands in interest.

See how to get debt under control for more information about prioritising and managing debt.

Source:

Reproduced with the permission of ASIC’s MoneySmart Team. This article was originally published at https://moneysmart.gov.au/saving/simple-ways-to-save-money

Important note: This provides general information and hasn’t taken your circumstances into account.  It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.  Past performance is not a reliable guide to future returns.

Important

Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.”

A mortgage is a long-term commitment, which many people enter with a ‘set and forget’ mentality. Most loans are around 30 years – during which many things can change, not just in your personal circumstances but in the financial world, with the new loan products and fluctuations in interest rates.

If you haven’t reviewed your loan for a while, now is a good time to consider whether it still suits your circumstances or whether you’re better off making some changes. It’s what many Aussies are doing, with the ABS reporting the value of owner-occupier refinancing of $13.4 billion last November.ⁱ

Reviewing your loan

It is a good idea to review your loan annually and there’s no better time than the present.

While this can seem like an arduous task, it doesn’t need to be complicated. To ensure you’re receiving the best interest rate for your loan – and whether your loan is still fit for purpose – ask yourself a few things:

• Has there been a change in your employment status?

• Has there been a change in your family situation?

• Have your financial goals changed?

• Are there pressing matters that need financing (i.e. renovations)?

• Are you wanting to invest or change your existing investments?

Knowing where you are standing financially can help you decide whether it’s worth refinancing and chasing a better interest rate, or whether your existing mortgage is still working for you.

Types of refinance loans

There’s not just one type of refinancing, but many different types of refinance loans, including:

Rate-and-term refinance loan: This is where you replace your loan with a new loan that is the same amount, but at a changed interest rate and/or term. This is the most common refinancing option and often what people think of when it comes to refinancing.

Cash-out/cash-in refinance: A cash-out refinance loan enables you to access the equity in your home by taking out a new loan with a higher loan balance than your existing loan.

A cash-in refinance loan has you lowering your overall loan amount by contributing a lump sum – this is done by taking out a new loan less than your old loan, paying out the difference to close your old loan.

Fixing your interest rate: A fixed loan guarantees a locked interest rate for a period of time (usually between 1 – 5 years). This is a popular option during a time of rate hikes. However, it can come with drawbacks such as not being able to take advantage of any rate cuts.

Split loans: As its name suggests, a split loan allows you to split your loan into multiple parts with different interest rates and terms.

Consolidation refinance: This is where you combine all your various debts into the one debt (including credit cards, car loans, etc) and therefore one repayment.

Things to keep in mind

While (generally speaking) the goal of refinancing is to save money, there are a few considerations to be aware of, so you don’t end up paying more in your quest to save.

Refinancing can impact your credit rating, causing it to drop. However, this dip is short-term and shouldn’t have too big an effect on your credit score in the future.

Another thing to consider is you may need to pay Lender Mortgage Insurance (LMI) again. For most borrowers, you’ll need 20% of the property’s current value to avoid paying LMI again, keep in mind the value of your property may have changed since you first took out your loan.

There are also costs related to refinancing, such as application fees, discharge/break fees and valuation fees. Some lenders waive these costs or offer a discount, so ask what you will be expected to pay and try to negotiate.

Your bid for refinancing may be rejected if you have accumulated too much debt or if your living expenses are now too high. Changes to your loan could also stretch out the repayment period, leading you to pay more in the long run.

Keeping on friendly terms with your mortgage

Whether you decide to refinance or stick with your current loan, by refamiliarising yourself with the conditions of your loan and assessing your financial situation, you’ll be better placed than if you ‘set and forget’.

Give us a call to discuss your existing loan and circumstances and to chat about your future financial goals.

i https://www.abs.gov.au/media-centre/media-releases/refinancing-reached-another-record-high-november

Important: This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.

Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

Ensuring you’ve structured your finances tax-effectively is always a concern, but with new tax rules for super on the horizon, many people with large balances are considering alternative vehicles to save for retirement.

Unsurprisingly, this has sparked a renewed interest in an old favourite – trusts.

Trusts have always been popular in Australia, with the government’s Tax Avoidance Taskforce (Trusts) estimating more than one million were in place in 2022.

Separating ownership using a trust

The popularity of trusts for business, investment and estate planning purposes is due to both their flexibility and inherent benefits, particularly when it comes to managing your tax affairs.

At their heart, trusts are simply a formal relationship where a legal entity holds property or assets on behalf of another legal entity.

This separation means the trustee legally owns the assets, but the beneficiaries of the trust (such as family members) receive the income flowing from the assets.

A common example of a trust structure is a self managed super fund (SMSF), where the fund trustee is the legal owner of the fund’s assets, and the members receive investment returns earned on assets held within the SMSF trust.

Which trust is best?

There are many different types of trusts, with the appropriate structure depending on the financial goals you’re trying to achieve.

For small businesses and families, the most common trust is a discretionary (or family) trust. These vehicles are very flexible and can be used with immediate and extended family members, family companies or even charities.

In a discretionary trust, the trustee has absolute discretion on how both the income and capital of the trust are distributed to various beneficiaries.

This gives the trustee a great deal of flexibility when it comes time to allocate income to family members paying different marginal tax rates.

Advantages of a trust structure

Discretionary trusts offer tax, asset protection, estate planning and property holding benefits.

They can also assist with the accumulation of assets for younger generations within your family and provide opportunities for the discounting of capital gains.

For small businesses and farming operations, a discretionary trust can be used to provide valuable asset protection. If your business goes bankrupt or a beneficiary is divorced, creditors will be unable to access assets or property held within the trust as it is the legal owner of the assets.

Building wealth outside super

With new tax rules for super fund balances over $3 million being introduced, trusts also provide a useful tool to consider for continued wealth accumulation.

Unlike super funds, trusts don’t have annual contribution limits, restrictions on where you can invest or borrowing limits. Money can be added and removed from the trust as necessary, providing significant financial flexibility.

Discretionary trusts can also be used with vulnerable beneficiaries who may make unwise spending decisions. The trustee can decide to provide a spendthrift child or a family member with a gambling addiction regular income, but not large capital sums.

Holding ownership of assets within a trust is useful for estate management, as the assets will not be part of a deceased estate, avoiding the possibility of a Will being challenged.

Trusts aren’t always the solution

Although trust structures provide many benefits, there are also tax issues that need to be considered. For example, any trust income not distributed to beneficiaries is taxed at the top marginal rate.

Distributions to minor children are taxed at higher rates and a trust is unable to allocate tax losses to beneficiaries, so they must remain within the trust and be carried forward.

Trusts can be expensive to set up, administer and dissolve when they are no longer needed and the trustee’s actions are restricted by the terms of the trust deed.

If a family dispute arises, running a trust can become difficult and making changes once it is established isn’t easy.

If you would like to find out more about trusts and whether one is appropriate for your business or family, call us today.

When looking into the financial elements associated with planning for aged care, there is a lot of information out there which can be confusing. With this in mind, it’s important to have your questions answered by those who are experts in finance specialising in the aged care industry. These experts will look at your unique situation and advise you on your options. Things to consider may be superannuation, pension, existing assets and liabilities, banking, investments as well as Centrelink benefits which you may be eligible to receive.

Looking into the fees and charges associated with aged care can get quite complex and as such it is advisable to seek advice from professionals within the industry. These fees and charges are regulated by the Government. The amount of which you are likely to pay will vary and is unique for everyone. Some fees are the same for all residents and some can be based on your income. Whether you’re on a pension and the type of pension it is can also impact on the amount you will be required to pay.

There are two main areas of fees associated with moving into residential aged care; daily and income tested fees. A facility will also require either an accommodation bond for low care or an accommodation charge for high care residents.

Home care packages require a set daily contribution fee which is regulated by the Government. The only addition to this fee will depend on your income and is determined by the service provider following guidelines set by the Government.

Residential aged care facility costs

There are two main areas of fees for consideration in residential aged care. Firstly, the daily care fee is a contribution to your daily living costs such as nursing and personal care, living expenses, meals, linen and laundry, heating and cooling.

In addition to a daily care fee residents may be asked to pay a daily income tested fee. Centrelink or the Department of Veterans Affairs bases this fee on an income assessment. If you are a full pensioner you will not have to pay an income tested fee. Part-pensioners and blind pensioners are usually required to pay this fee, depending on circumstances such as the level of care required, and any dependent children. These circumstances in addition to your income will be taken into account if you are a non-pensioner.

Secondly, an accommodation payment in the form of either a RAD or a DAP will need to be considered.

A RAD can be paid as a lump or regular periodic payment (DAP), which you will be required to pay if your assets exceed a set amount outlined by the Government. The amount of your RAD will be decided by the aged care facility you enter into.

The Government requires that residents be left with a certain amount of assets once the RAD is paid, the RAD is refunded when the resident leaves the facility minus the retention rate. The retention rate is a set amount which is paid every month for a certain amount of years, every year after this time (for example, after 5 years) no retention rate is withheld.

Since the exact amount for fees, RAD/DAP and asset requirements can change at any time, it is best to contact the aged care home directly for current rates and fees.

An accommodation charge on the other hand is a set amount per day for high care residents to pay if their assets are over a certain amount. If the resident’s assets are between certain amounts they will pay a lower fee. If the resident has assets under a certain amount they do not have to pay this charge, the Government will subsidise it, they will just have to pay the daily care fee and the daily income tested fee depending on their income.

Home care packages (Level 1 – 4) pricing structure

The pricing structure for Home Care Packages are set, regulated and funded by the Government. Fees charged for Home Care Packages vary between levels.

There are currently four levels of Home Care Packages:

• Level 1: basic level care needs

• Level 2: low level care needs

• Level 3: intermediate level care needs

• Level 4: high level care needs

The amount of funding you recieve will depend on which Home Care Package level you have been approved for. This is determent by undergoing an ACAT Assessment. The maximum government contribution for Home Care Packages increases each year. The individual amount that will be paid to you will depend on whether you are asked to pay an income-tested care fee.

You do have the option to top up this funding by paying for some home care services out of your own pocket. 

Just remember, it is always important to seek advice from a financial advisor who will be able to look at your particular requirements and financial position and advice on what costs are involved.

Source: This article was originally published on https://agedcareonline.com.au/support-services/aged-care-financial-planning.

Important:

This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.

Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

Spring is traditionally the hottest season for property, with buyers and sellers springing into action. There are more listings and more properties sold than any other season, with the REA finding that market action increases in early October.ⁱ

Due to the increase in listings, buyers tend to have more to choose from during spring, which is why you often hear that this season is the best time to buy. The warmer weather and longer hours of daylight is thought to play a factor in encouraging people out of their homes to inspect properties, and it’s also the best season for making your garden look its best – who can resist blooming flowers or a thriving veggie patch?

It’s no surprise that the last few years have seen major changes; one being that in 2022, spring wasn’t the property boom it usually is.ⁱⁱ However, it’s still to be seen how this year will pan out for property, so it’s worth being prepared.

To be ready to buy this spring, it’s important to be organised by doing your homework and getting your pre-approval in place.

Refine what you’re looking for

While increased choice is a good thing when you’re looking for something special, it can also make it harder to decide. Set aside time to consider what your ‘musts’ are in a property and what is a ‘nice to have but not essential’.

Take some time to think about your desired location, how many bedrooms you’re looking for, whether you want a garden, and how much maintenance or renovating you are willing to do. What is an absolute must – such as a home office if you’re working from home – and what could you compromise on, for instance, not having a garage if street parking is viable?

Research ahead of time

If you have established the location you’ll be looking in, now is a good time to research how the area is performing. A simple search online can give you visibility of properties that have recently sold in the area, how much they sold for and how long they were on the market.

Real estate institutes, such as REIV, tend to list data such as the top growth suburbs by median house and unit prices, which is also helpful to note.

It’s also useful to visit the area in person and attend some auctions. This will give you a greater sense of the neighbourhood and as well as preparing you for upcoming auctions.

Review your finances

Now that you’ve researched the property market, it’s time to make sure your finances are in order. Revisit your budget to see how much you will be able to spend, or create one if you haven’t already, but hopefully you’re already on track. Can you make some reductions in the short-term to help you over the line come spring?

If you haven’t already, check your credit rating so you have a firm idea of how much you can borrow. You may also be able to make some steps to improve your score, however you can’t rely on this too much given spring selling season is just around the corner, so be pragmatic.

Apply for pre-approval

While pre-approval applications can be turned around quickly, it would be beneficial to start the process shortly if you’re planning to buy in spring and we’re here to help you every step of the way.

By having your pre-approval in place, you’ll know exactly how much you’ll be able to afford but give you confidence when negotiating a price and may also mean real estate agents take you more seriously. However, it’s worth noting that pre-approval only lasts for 3 months, so if you don’t buy in spring, you will need to go through the process again at a later stage.

Spring into action

To prepare for spring – a time in which you’ll hopefully land your dream property – contact us to start the pre-approval process and get organised. With your ducks in a row, you will be ready to act when the time comes.

i https://www.mortgagechoice.com.au/news/is-spring-selling-a-myth-when-is-it-actually-the-best-time-to-sell-your-home/
ii https://www.corelogic.com.au/news-research/news/2022/what-happened-to-the-spring-selling-season

Important: This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.

Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

It is a special feeling to welcome a new child or grandchild into the world and watch them grow. Sharing their joy as they reach new milestones is priceless.

Of course, there is a real cost – raising a child is expensive, particularly now as the cost-of-living spirals higher. Estimates vary widely from the few studies completed but it is fair to say that over a child’s lifetime families can spend hundreds of thousands of dollars on living, medical and schooling expenses for their children.

So, having a financial strategy in place to cover the costs and taking advantage of government support where available can make a big difference.

Taking care of the basics

The first step is to update your Will to nominate guardians for your children in case the worst happens. You may also consider life insurance and income protection to ensure your family is protected.

Next, a savings and investment plan will help you navigate the years ahead with more certainty. Adding small amounts of money regularly to an account for education and other expenses can help to ease financial stress. The MoneySmart savings goals calculator shows what can be achieved. You could consider fee-free high interest savings accounts or your mortgage offset account as a way to save cash for short-term needs.

Meanwhile, some longer-term investments such as shares, exchange traded funds or listed investment companies may provide financial support for later expenses. They can offer the possibility of capital growth and diversification for a relatively low cost.

Super splitting

Keeping an eye on the future also means thinking about your superannuation. If one partner is staying at home to care for the children, the other partner can split their super contributions with them. You will need to check if your fund allows it, whether they charge a fee and complete some paperwork.

There are also some tax considerations, so it is important to make sure you understand the implications for you.

Government support

Take the time to discover the government payments and supports available for families. For example, the Paid Parental Leave Scheme provides support for mothers for up to three months before the birth.

A recent change to Parental Leave Pay and Dad and Partner Pay sees these two payments combine into one payment that is available to both parents for up to two years after the child’s birth.

You will need to meet income and work tests and claim within certain timelines.

Even if you are not eligible for parental leave pay, you may still be able to apply for both the Newborn Upfront Payment and the Newborn Supplement.

Then there is the Family Tax Benefit, a two-part payment to help with the cost of raising children. To receive the benefit, you must have a dependent child or a full-time secondary student aged 16 to 19 who is not receiving any other payment or benefit such as a youth allowance, care for the child at least 35 per cent of the time and meet an income test.

Grandparent gifting

Grandparents who are keen to help out their families financially can gift money to their children or grandchildren. Be aware that Centrelink has gifting rules for those receiving an age pension. You can give $10,000 in one year or up to $30,000 over five years without your pension being affected. If you give more, the amount will be treated as though you had retained it in your own accounts.

However, gifts and inheritances are generally not considered as income for tax purposes. The ATO says neither the donor nor the receiver will pay tax on a gift if:

• it is a transfer of money or property.

• the transfer is made voluntarily.

• the donor does not expect anything in return.

• the donor does not materially benefit.

Tax may apply in some cases where property or shares are gifted.

The joys of raising a little one are many, and having a plan to manage the financial implications can let you enjoy the journey. Get in touch with us to create a plan to secure your family’s future.

Buying a home is one of the biggest financial decisions you will make. Once the inspections are complete and you’re ready to proceed to purchase, it’s recommended to contact your broker or lender. The next step depends on whether the property is being sold at public auction or private treaty (a sale negotiated with the owner).

It can be overwhelming without understanding the benefits and areas to consider for each type of sale when searching property on the market. You should always seek professional advice to suit your own individual circumstances.

1 Buy at auction 

Sale where the seller sets a minimum price, is also known as the ‘reserve’ price. When planning to buy at auction, be sure to have a bank pre-approval in place, and that all legal work and inspections have been completed prior to the auction date. If you are located in New South Wales, Queensland, Australian Capital Territory or Tasmania, to participate in the auction, you must register with the vendor’s agent and be assigned with a bidder’s number. If your bid is successful you are obliged to sign the contract and go through with the purchase according to its conditions as there is no cooling off period. For that reason, it is important to make sure you really want the property before you start bidding and it is crucial that you don’t exceed your maximum spending limit.

Benefits

• Competition. You may pay a lower sale price than you anticipated if there is low competition, and the reserve price is met.

• Transparent process. You are aware of what the other bidders are willing to pay for the property.

Things to consider

• Ensure a clear price guide is advertised at the auction you are planning to attend.

• Attend another auction prior (and not participate in the bidding process) to understand how the process operates.

• If you are the highest bidder, (and the reserve has been met) you are required to sign the contract and pay a deposit on the spot (usually 10 per cent of the purchase price).

• Competition. You may have to pay a higher sale price than you anticipated if there is strong competition.

• No cooling off period.

2 Buying by private treaty

A sale where the seller sets the price of their property. The listed price is the amount that the property is being advertised for on the market. A buyer’s agent or your own research will assist you when negotiating the purchase price of the property with the seller. Negotiations with the seller will be made via their real estate agent.

Benefits

• Greater negotiation. An offer can be made, negotiated on, and accepted at any time.

• Cooling off period. A set period of time in the contract which is when you can walk away from the agreement to purchase the property, but with a possible cost. You could be asked to waive your right to a cooling off period. The length of the cooling off period can vary between states. Western Australia and Tasmania do not have mandatory cooling off periods unless it is accepted in the contract by both parties.

Things to consider

• Don’t be too inflexible when negotiating. It would be disappointing to lose the property to someone else for an amount that you would have been happy to pay.

• Holding deposit of approximately 0.25 per cent will need to be paid once the offer is accepted

• If you decide not to proceed, you will typically have to pay the vendor a termination fee, which is usually around 0.25 per cent of the purchase price

• How long has the property been on the market? The seller may be more flexible when negotiating if the property has been on the market for several months

• Making an offer at list price will help lock out the competition.

Whatever you decide, happy house hunting and enjoy the process. 

The It’s My Home magazine is a great resource to help with your home ownership journey and you can download a copy of the magazine via https://helia.com.au/tools-resources/it-s-my-home

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