Strategy Text

100+ Written Advice Strategies ADVICE CONTENT FOR SOA’S FINURA GROUP

Version: FIN1.0.0

Table of Contents

1.

Commence a Home Care Package.................................................................................................5

2.

Enter Aged Care Facility and Restructure your Finances...............................................................6

3.

Cash Reserves................................................................................................................................8

4.

Cash Management Account...........................................................................................................8

5.

Consolidate Cash...........................................................................................................................9

6.

Establish a Budget for your Cash Flow.........................................................................................10

7.

Cash flow monitoring...................................................................................................................10

8.

Surplus Cashflow.........................................................................................................................11

9.

Term Deposit...............................................................................................................................11

10. Term Deposit Renewal.................................................................................................................12 11.

Apply for a Low-Income Health Care Card (LIHCC)..................................................................12

12.

Apply for Austudy....................................................................................................................13

13.

Apply for Carer’s Allowance.....................................................................................................13

14.

Apply for a Carer Payment.......................................................................................................13

16.

Apply for the Commonwealth Seniors Health Care Card (CSHCC)...........................................14

17.

Apply for a Disability Support Pension.....................................................................................15

18.

Apply for Department of Veterans’ Affairs (DVA) Entitlements...............................................16

19.

Gift $XXX to increase your Centrelink Entitlements.................................................................17

20.

Apply for Jobseeker Payment..................................................................................................17

21.

Apply for Parenting Payment...................................................................................................18

22.

Maintain your Pension Bonus Scheme....................................................................................18

23.

Apply for Rent Assistance........................................................................................................19

24.

Commence an Investment Portfolio with a Margin Lending Facility........................................20

25.

Consolidate your Debt.............................................................................................................20

26.

Implement a Debt Recycling Strategy......................................................................................21

27.

Establish a Loan Offset account...............................................................................................22

28.

Increase the Frequency of your Loan Repayments..................................................................22

29.

Increase your Loan Repayments..............................................................................................22

30.

Commence a Regular Gearing Strategy...................................................................................23

31.

Repay your Non-Deductible Debt............................................................................................24

32.

Use your Home Equity to Invest..............................................................................................24

33.

Establish your Estate Plan........................................................................................................25

34.

Review your Estate Plan..........................................................................................................25

35.

Establish your Will/s................................................................................................................26

36.

Review your Will/s...................................................................................................................27

37.

Establish your Powers of Attorney...........................................................................................27

1

38.

Review your Powers of Attorney.............................................................................................28

39.

Purchase a Funeral Bond.........................................................................................................28

40.

Implement a Testamentary Trust............................................................................................29

41.

Adjust your personal insurance cover......................................................................................29

42.

Establish your Risk Protection Plan..........................................................................................30

43.

Apply for Life & Total and Permanent Disablement (TPD) Insurance......................................33

44.

Apply for Life Insurance...........................................................................................................34

45.

Apply for Total and Permanent Disablement (TPD) Insurance................................................35

46.

Apply for Trauma Insurance.....................................................................................................36

47.

Apply for Income Protection Insurance...................................................................................37

48.

Apply for Accidental Life Insurance.........................................................................................38

49.

Apply for Business Expense Insurance.....................................................................................39

50.

Apply for Business Protection Insurance (Key Person) - Debt..................................................40

51.

Apply for Business Protection Insurance (Key Person) - Revenue............................................41

52.

Apply for Child cover...............................................................................................................42

53.

Review your SMSF Insurance Strategy.....................................................................................43

54.

Invest in a Portfolio of Direct Shares........................................................................................43

55.

Commence a Regular Investment Plan....................................................................................43

56.

Invest in an Investment / Education Bond...............................................................................44

57.

Commence an Investment Portfolio via a Platform / Wrap Account.......................................45

58.

Commence an Investment Portfolio via a Master Trust...........................................................45

59.

Invest in a Diversified Portfolio of Managed Investments.......................................................46

60.

Invest through a Regular Savings Plan.....................................................................................47

61.

Switch investments in your Portfolio.......................................................................................47

62.

Rebalance your Investment Portfolio......................................................................................48

63.

Redeem your Investment/s.....................................................................................................48

64.

Establish a Discretionary Trust.................................................................................................49

65.

Establish a Family Trust...........................................................................................................49

66.

Commence an Account-Based Pension....................................................................................50

67.

Reboot your Account-based Pension.......................................................................................51

68.

Commence an Annuity Income Stream (Super money)...........................................................53

69.

Commence an Annuity Income Stream (non-super money)....................................................53

70.

Take Account-Based Pension benefit as a Lump Sum..............................................................54

71.

Take Account-Based Pension Death Benefit as an Income Stream..........................................54

72.

Rollover your Defined Benefit Fund.........................................................................................55

73.

Retain your Defined Benefit Fund............................................................................................55

74.

Change your Account-Based Pension Income Payment...........................................................56

2

75.

Invest using a Model Portfolio.................................................................................................56

76.

Re-contribute to your Superannuation....................................................................................57

77.

Nominate <Spouse name> as a Reversionary Beneficiary.......................................................57

78.

Retire on an Income of $<Retirement income>at age <Retirement age>................................57

79.

Commence a Transition to Retirement Income Stream with salary sacrifice...........................58

80.

Commence a Transition to Retirement Income Stream <no salary sacrifice>..........................59

81.

Transfer your UK Pension to an Australian Super Fund...........................................................60

82.

Withdraw $XXX from your Account-based Pension.................................................................60

83.

Make a Downsizer Contribution to Super................................................................................61

84.

Borrow to invest via your Self-Managed Super Fund - Property..............................................61

85.

Borrow to invest via your Self-Managed Super Fund - Investment.........................................63

86.

Transfer business real property to your SMSF.........................................................................64

87.

Establish a Self-Managed Super Fund......................................................................................64

88.

Review your Self-Managed Super Fund Trust Deed and Investment / Insurance Strategy......66

89.

Consolidate Super into your Self-Managed Super fund...........................................................66

91.

Make Super Contributions using the First Home Super Saver Scheme (FHSSS).......................68

92.

Review your Binding Death Nomination..................................................................................68

93.

Make a Binding Death Nomination..........................................................................................68

94.

Make Salary Sacrifice Superannuation Contributions..............................................................70

95.

Make Changes to your Salary Sacrifice Contributions..............................................................70

96.

Make Concessional Superannuation Contributions.................................................................71

97.

Consolidate your Super Funds.................................................................................................71

98.

Start a New Super Fund...........................................................................................................72

99.

Retain your Super Fund/s........................................................................................................72

100.

Review your Super Fund..........................................................................................................73

101.

Rollover your Super Fund/s.....................................................................................................73

102.

Rebalance your Super Fund Investment Portfolio...................................................................74

103.

Withdraw your Superannuation..............................................................................................74

104.

Transfer your asset/s In-Specie to your Super Fund................................................................75

105.

Make a Non-Concessional Contribution and access Government Co-Contribution.................75

106.

Cease your Transition to Retirement Income Stream <with salary sacrifice>..........................75

107.

Split your Contributions with Spouse name.............................................................................76

108.

Make a Non-Concessional Contribution..................................................................................77

109.

Make a Spouse contribution to Superannuation.....................................................................77

110.

Make a Non-Concessional Contribution with the Proceeds of your Business Sale..................78

111.

Invest in a Portfolio via a Managed Discretionary Account (MDA)..........................................78

112.

Re-contribute your COVID-19 Early Release of Super..............................................................79

3

4

1.

Commence a Home Care Package

We recommend that you start a Home Care Package to help you remain in your home with the support of in-home services. There is a formal process that you need to complete with the Department of Human Services (DHS) to have your Home Care Package approved, as outlined in the diagram below. You will need to start the process by making a time with the DHS to get a care assessment that will determine the level of care you require, and by completing an income assessment form if required. We will then need to find a service to match your needs. Once your home care package is approved, you can enter into an agreement with your chosen service provider.

The fee that you pay and the services you receive depend on:  

Your income test assessment as calculated by the Department of Human Services and; Your needs as determined by the Aged Care Assessment Team (ACAT) – Level 1 – 4.

If the fees from your selected provider exceed your contribution, the government will pay the balance.

We estimate that you will pay a Basic Daily fee of $XXX <as well as an Income-Tested fee of $X per day>. Your total contribution is estimated to be $X per day / $X per annum.

Care assessment

Choose care provider

Home care package approved

Home care agreement

Manage Services

Benefits:      

You will be able to stay in the comfort of your own home.

The Home Care package provides personal care, clinical care and support services dependant on the level of care you need.

[If full age pension recipient] As you receive a full age pension, you only need to pay the Basic Daily fee for these services.

You have the flexibility to choose a service provider to match your needs.

[Fee payer] The annual and lifetime caps on income tested fees can help manage the fees you pay.

The government gives you a list of approved services that are monitored for quality.

Points to Consider:    

 

The Home Care Package approval process can take up to 12 months or more. If you need help in the meantime, there are ad-hoc homes services available to you.

The fee you pay is determined by the Department of Human Services and will reduce the income you have available for your normal living expenses.

[Fee payer] You will have to pay a fee in addition to the Basic Daily Fee for the in-home services provided.

[Fee payer] You must complete the Income Assessment form and submit to the Department of Human Services for assessment. If you do not, you may have to pay the maximum rate of $32.30 per day ($11,789.50 p.a.) in additional to the Basic Daily fee.

All payment rates and means tested fees are updated quarterly in line with the DHS payments on the 1 January, 20 March, 1 July and 20 September. This means your fees can change quarterly.

Annual caps are reviewed twice per year on 20 March and 20 September.

Additional Resources: 

My Aged Care (Government service) 1800 200 422 https://www.myagedcare.gov.au/

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2.

Enter Aged Care Facility and Restructure your Finances

We recommend you enter an aged care facility of your choice so that you can access the level of care you require. There is a formal process that will guide you through the process to ensure you maximise your government contribution to your fees:

Work out the costs

Find an aged care home

Apply and accept offer

Enter into agreements

Manage Services

Age d Care Facility fees payable by you are dependent on a combined income and asset means test that is particular to aged care services. You must submit an assessment form to the Department of Human Services to receive government contribution to your fees, where eligible. The fees you pay may include:    

Basic Daily fee (paid by all) Means tested fee Accommodation costs (lump sum and/or daily) Additional Service costs such as Pay TV.

We recommend that you restructure your assets to improve your assessment for fees and to ensure you maximise your cashflow to cover living costs and aged care fees. We recommend: <Edit as required>      

You keep your family home / sell your family home / rent out your family home Make a gift of $10,000 to your adult children / grandchildren / family / friend Purchase an investment bond through a discretionary family trust structure to a value of $XXX Purchase a lifetime / fixed term annuity for $XXX. This will provide you with ongoing income of $X for <X> years / your lifetime.

Purchase a funeral bond to the value of $14,000 Sell your term deposits / investments / cash accounts / shares.

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[Where aged care facility quote has been done AND RAC/DAC applies] Once these changes are in place, we recommend that you will pay the Basic Daily fee of $XXX per day ($XXX per year) plus a Refundable Accommodation Charge of $X and / or a Daily Accommodation Charge of $Y>. We recommend your daily charge be paid from your cashflow / specific asset. This is based on our estimate of your combined means test assessment which is explained in more detail in the Appendix to this SoA. [Where aged care facility quote has been done AND RAD/DAP applies] Once these changes are in place, we recommend that you will pay the Basic Daily fee of $XXX per day ($XXX per year), <a daily means tested fee of $X> <plus a Refundable Accommodation Deposit of $X and / or a Daily Accommodation Payment of $Y>. We recommend your daily Payment / Charge be paid from your cashflow / specific asset / RAD. This is based on our estimate of your combined means test assessment which is explained in more detail in the Appendix to this SoA. Inflow Age / DVA Pension Account Based Pension Annuity Income Investment Income Rental Income Other Income Cash flow surplus / deficit

$XX $XX $XX $XX $XX $XX

Outflow Normal living costs Basic daily fee Daily Accommodation Payment / Charge Means tested fee Additional Service costs Other expenses

$XX $XX $XX $XX $XX $XX $XXXX

[Where aged care facility has not been selected] In order for us to finalise your cash flow assessment, you will need to select your Aged Care Service and provide us with a quote of the indicative accommodation costs. We can then provide advice on the balance of <Refundable Accommodation Deposit and Daily Accommodation Payment> OR <Refundable Accommodation Charge and Daily Accommodation Charge> that is best to ensure you have adequate cash flow available. Based on calculations and recommended asset restructure, we estimate that you will need to pay the Basic Daily fee of $XXX per day ($XXX per year) <and a daily means tested fee of $X>.

Benefits:  





    

An aged care facility can provide you with the level of care you need.

[Where age care costs are known and accommodation cost payable] By paying your accommodation costs as a combination of a lump sum and a daily fee, you will have sufficient cash flow to <meet your living expenses and> pay your aged care fees. <RAP>Your refundable accommodation deposit is asset test exempt from the age pension means test <and increases your age pension entitlement>.

[Age pension] By restructuring your assets as recommended, we estimate that your age pension entitlement will increase by $X per fortnight and your aged care daily costs combined would decrease by $X. This is an overall saving of $X p.a. if you implement our recommendations.

By maintaining your home, it will be preserved for your beneficiaries / your spouse/protected person can continue living there / and it will be exempt from asset testing OR it will be exempt from asset testing for the age pension for the first two years <where appropriate>.

Your home value is capped for means test assessment purposes.

Renting out your home will provide rental income to help meet your living and aged care costs.

[Where RAD/RAC to be paid] The annual and lifetime caps on means tested fees can help manage the fees you pay.

[Where RAD/RAC to be paid] Your refundable accommodation deposit / charge will be paid to your Estate upon death.

[Sell family home] By selling your home you will have enough cash to pay your refundable accommodation deposit / charge which will help to reduce your daily accommodation payment / charge.

Points to Consider: 



Please refer to detailed advice recommendations following on in this SoA regarding: <delete as appropriate> o Investment Bonds o Asset Gifting o Lifetime / Term certain Annuity o Funeral bond/s The aged care fees you pay are determined by the Department of Human Services and will reduce the income you have available for your normal living expenses.

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      

[RAD/RAC] You must notify your Aged Care facility within 28 days from entry, the combination of lump sum and daily fee you will pay.

[RAD/RAC] You must pay your deposit/charge within 6 months of entry to your Aged Care facility. This gives you time to sell down assets / restructure as required.

[Periodic payments] If you make your payments periodically, the Aged Care facility may charge interest on these amounts up to 4.07%.

You must complete the combined income and asset income assessment form otherwise you will not receive any government subsidies on your aged care fees.

You can take up to 52 nights of social leave per year. Anything beyond this will mean you lose your government subsidy on fees.

If you change aged care facilities and take more than 28 days to enter a new one, you will be treated as a firsttime entrant.

Selling investments may incur <transactions costs / break fees / capital gains tax>.

Other Resources: 

My Aged Care (Government service) 1800 200 422 https://www.myagedcare.gov.au/

3.

Cash Reserves

We recommend that you establish / maintain a cash reserve of $X. This money will provide you with a pool of funds that you can draw on for unexpected expenses and emergencies and will be sourced from your <Name of source>. This is in line with your request / goal to maintain cash reserves of $X. [If there is a variation between goal and recommendation, add an explanation here].

We recommend that you invest this cash reserve in <Name of recommended cash account>.

Benefits:    

[No fees] The account for your cash reserve does not have any fees.

You will not have to pay for unexpected expenses and emergencies from your day-to-day funds. This will reduce the risk of not meeting your living expense needs.

You will potentially receive higher returns by redirecting your reserves to <Name of recommended account>.

You will have immediate access to funds in the event of unexpected expenses and emergencies.

Points to Consider: 



You will forego potential higher returns that could be achieved from investing in growth asset classes such as property and shares.

Your unexpected expenses may be more than the reserves we recommend here. You will then need to source money from other investments / your everyday funds.

[Centrelink recipient] The income on your cash-based investment will be deemed for Centrelink purposes.

Cash investments are not necessarily capital guaranteed. Please refer to the PDS / your bank for further information.

Transaction costs and interest penalties may apply at time of withdrawal.

4.

Cash Management Account

  

We recommend that you invest $X into a Cash Management Account. This will be sourced from your <Name of source>.

These funds will be used for <insert purpose here such as a hub for your SMSF, managing your investment property expenditure etc>.

Benefits:   

Greater transparency on the cash transactions for your <investment property / SMSF / asset> so that you can monitor cashflow specific to this.

Access to web-based transacting, cheque book facilities, account-linking and custom reporting.

A centralised cash facility to reduce administration and fees.

Points to Consider: 

Investing in cash, you will forego potential higher returns that could be achieved from investing in growth asset classes such as property and shares.

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  

Transaction fees apply.

[Centrelink recipient] The income on your cash-based investment will be deemed for Centrelink purposes.

Cash investments are not capital guaranteed. Please refer to the Product Disclosure Statement for further information.

5.

Consolidate Cash

We recommend that you consolidate your cash accounts into a <Name of recommended account>. This will require you to redirect cash from other accounts as follows:  

<Itemise each account that is to be transferred over or, the specific $ amount to be transferred. Eg, $X from your everyday bank account>. <Outline any cash account balances to be left behind and why>.

Benefits:   

[Fee reduction] Streamlining your accounts will reduce fees by $X p.a.

You will spend less time administering your various cash accounts.

You will be better able to track your expenditure and savings with less accounts.

Points to Consider:     

Transaction fees may apply.

You will no longer have access to web-based transacting / cheque book facilities / account-linking / custom reporting.

Investing in cash will potentially provide lower returns than growth investments such as shares and property.

[Centrelink recipient] The income on your cash-based investment will be deemed for Centrelink purposes.

Cash investments are not capital guaranteed. Please refer to the Product Disclosure Statement for further information.

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6.

Establish a Budget for your Cash Flow

We recommend you establish and implement a budget by using your existing / our proposed cash accounts. We recommend a transaction account/s for everyday costs. You will then have a separate account for larger expenses and another for savings. We will undertake a review of your budget every quarter / six months / 12 months. We recommend the use of cash accounts as follows:

Benefits:     

You are more likely to meet your savings goals if you actively track your expenses and your progress.

We estimate that if you stick to your budget, after 12 months you will have $XXX in your savings account for your savings goals and / or as an emergency cash reserve.

[Retirement] We estimate that your retirement goal to retire at age XX on an income of $XXX p.a. in after-tax dollars, will be met with adherence to this cash flow strategy.

Smoothing out bill payments by making small contributions often, can ease the financial stress of paying big bills.

The budget we have recommended allows for all known expenses.

Points to Consider:    

7.

You will have unexpected expenses from time to time. This is where your cash savings will assist you as needed.

Keeping to budget requires discipline. You need to be consistent in applying your budget on a daily, weekly, monthly basis.

You will have less money for discretionary spending so that we can cater for your longer-term needs and goals.

The budget we have recommended is based on the expenditure details you have provided. If this information is inaccurate, the budget may be unrealistic and difficult to follow. We will review the accuracy of the budget at each budget review.

Cash flow monitoring

We recommend that you commence a cash flow monitoring service. This can be linked to your existing bank accounts / our recommended cash accounts so that we have full visibility of your income and expenditure. We will track this to ensure your budgeted expenditure is in line with your actual spending and provide reporting on this each month / quarter. The monitoring will also show how you are tracking towards your savings and retirement goals.

Benefits:     

You are more likely to meet your savings goals if you actively track your expenses and your progress.

We estimate that if you stick to your budget, after 12 months you will have $XXX in your savings account for your savings goals and / or as an emergency cash reserve.

[Retirement] We estimate that your retirement goal to retire at age XX on an income of $XXX p.a. in after-tax dollars, will be met with adherence to this cash flow strategy.

Smoothing out bill payments by making small contributions often can ease the financial stress of paying big bills.

We have considered all planned expenditure to ensure your savings and retirement goals are realistic.

Points to Consider:    

You will have unexpected expenses from time to time. This is where your cash savings will be able to assist you as needed.

Keeping to budget requires discipline. You need be consistent in applying your budget on a daily, weekly, monthly basis.

You will have less money for discretionary spending so that we can cater for your longer-term needs and goals.

The cash flow outcomes we have considered are based on the income and expenditure details you have provided. If this information is inaccurate, the strategy may be unrealistic and difficult to follow. We will review the accuracy of the income and expenditure estimates at each cash flow review.

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8.

Surplus Cashflow

We recommend that you use your surplus cash flow to help you meet your wealth creation goals by:    

[Allocate to debt] Allocating $XXX to your non-deductible debt on a weekly / fortnightly / monthly basis.

[Allocate to debt] Allocating $XXX to your deductible debt on a weekly / fortnightly / monthly basis.

[Investment] Commencing a regular investment plan into your XXX investment / our recommended investment.

[Super Contributions] Making a non-concessional contribution (post-tax) of $XXX into your XXX Superannuation Fund / our recommended superannuation fund.

Benefits:    

[Allocate to debt] We estimate a reduction in your loan interest of $X over the term of your loan.

[Investment] Your investment will grow by $X over Y years, giving you access to capital growth which may help you grow your savings faster.

[Super Contributions] If you continue to make the recommended non-concessional contributions from now until retirement, we estimate your retirement savings will be boosted by $X over Y years to your retirement.

Allocating your surplus to debt repayment / investment / super contributions will avoid you spending this money on non-essential expenses. This will help you achieve your financial goals sooner.

Points to Consider: 



By allocating your surplus cashflow to debt repayment / investment / super contributions, you will no longer have access to this money for unexpected expenses. A cash reserve should be maintained for this purpose.

Your superannuation / investment has a larger exposure to growth assets with increased volatility and likelihood of negative returns. It is important that we invest and review your savings in line with your risk profile.

There may be transaction costs associated with the regular deposits / debt repayments / contributions.

9.

Term Deposit



We recommend that you invest $X from your YYY savings account / reinvest the proceeds from your term deposit maturity into a term deposit for a duration of XX days / years. The fixed rate of interest will be determined at time of application.

We recommend that interest earnt be reinvested in your term deposit / paid to your bank account to assist in meeting your day-to-day expenses.

Benefits:   

Your capital will be preserved whilst earning a higher interest rate than your <Name of source>. This will be available at maturity to assist in meeting your financial goals.

The interest rate on your term deposit will be fixed for the duration of the deposit. This gives you certainty of the income you will receive.

The rate of interest will be higher than your transactional bank account, helping to increase your savings / make more income available to meet your living expenses.

Points to Consider:     

The term for your deposit is fixed. Break fees and lost interest may be incurred if you access the money before the maturity date.

Interest rates may rise whilst you are invested, and you will not be able to access these rates until maturity.

You may forego other investment opportunities whilst your money is in the term deposit.

Investing in cash, you will forego potential higher returns that could be achieved from investing in growth asset classes such as property and shares.

There is a risk that your interest rate will be lower than the inflation rate meaning you will lose purchasing power over the term of the deposit.

10. Term Deposit Renewal We recommend that you rollover $XX from your existing term deposit maturing on XX/XX/XX to a new Term Deposit with <Recommended Product Provider>. The new term deposit will have a maturity date of XX/XX/XX making the investment term YY days. We recommend that you continue to have your interest reinvested / paid to your

11

transactional bank account to assist you in meeting your daily expenses. The interest rate will be confirmed at time of application.

Benefits:   

Your capital will be preserved whilst earning a higher interest rate than your Y savings account. This will be available at maturity to assist in meeting your financial goals.

The interest rate on your term deposit will be fixed for the duration of the deposit. This gives you certainty of the income you will receive.

The rate of interest will be higher than your transactional bank account, helping to increase your savings / make more income available to meet your living expenses.

Points to Consider:    

The term for your deposit is fixed. Break fees and lost interest may be incurred if you access your money before the maturity date.

Interest rates may rise whilst you are invested, and you will not be able to access these higher rates until maturity.

Investing in cash, you will forego potential higher returns that could be achieved from investing in growth asset classes such as property and shares.

There is a risk that your interest rate will be lower than the inflation rate meaning you will lose purchasing power over the term of the deposit.

11. Apply for a Low-Income Health Care Card (LIHCC) We recommend that you apply for a Commonwealth Government Low-Income Health Care Card. We estimate based on your current income from all sources, you will be eligible to receive the Health Care Card.

Benefits: 

   

You may be entitled to other payments and benefits, which include: o Pensioner Concession Card o Pension Supplement o Energy Supplement o Remote Area Allowance (if eligible) o Rent Assistance (if eligible).

You will receive cheaper medicine under the Pharmaceutical Benefits Scheme.

Your Doctor may provide bulk-billing visits.

You may also receive discounts on utility bills, rates, public transport and other health care costs.

[Children] Your children can be added and their health needs also eligible for discount.

Points to Consider    

The LIHCC is issued annually. You will need to reapply each year and meet the income test at that time.

Eligibility criteria is income-based and subject to change. You may lose access to the health care card if your income increases or changes are made to the eligibility criteria.

Your application will need to be processed and assessed before the card is issued.

Should your circumstances change, you will need to notify Centrelink within 14 days.

12

12. Apply for Austudy We recommend that you apply for Austudy to assist you with your living expenses whilst you complete your studies / apprenticeship. We estimate based on your income and assets you will be eligible to receive a part / full payment of $XXX per fortnight ($XXX p.a.).

Benefits: 



You may also be eligible for other government assistance / discounts as a result of being eligible for Austudy.

This may include: o Energy supplement o Fare allowance o Pharmaceutical allowance o Rent assistance o Sickness allowance Receiving income payments from the government will ease financial pressure whilst you study / complete your apprenticeship.

Points to Consider:   

Eligibility criteria is income and asset-based and subject to change. You may lose access to Austudy if your income or assets increase or, changes are made to the eligibility criteria.

Your application will need to be processed and assessed before payments commence.

Should your circumstances change, you will need to notify Centrelink within 14 days.

13. Apply for Carer’s Allowance We recommend that you apply for the Carer’s allowance to assist in meeting carer expenses and/or your living expenses whilst you care for <Care Recipient>. We estimate based on your income and <Care recipient>’s health, you will be eligible for a partial / full payment of $XXX per fortnight ($XXX p.a.).

Benefits: 

Receiving the allowance will help to meet some financial costs associated with caring for <Care recipient> and/or meeting some of your own expenses due to your limited capacity to earn income whilst caring for <Care recipient>.

Points to Consider: 

 

Eligibility criteria is based on your income and <Care recipient>’s health and subject to change. You may lose the payment if your income increases, <Care recipient>’s health status changes or changes are made to the eligibility criteria.

Your application will need to be processed and assessed before the payment starts.

Should your circumstances change, you will need to notify Centrelink within 14 days.

14. Apply for a Carer Payment We recommend that you apply for the Carer’s payment to assist in meeting carer expenses and/or your living expenses whilst you care for <Care recipient>. We estimate based on your income and <Care recipient>’s health status, you will be eligible for a partial / full payment of $XXX per fortnight ($XXX p.a.).

Benefits: 

Receiving the payment will help to meet some financial costs associated with caring for <Care recipient> and/or meeting some of your own expenses due to your limited capacity to earn income whilst caring for <Care recipient>.

13

Points to Consider: 

 

Eligibility criteria is based on your income and <Care recipient>’s health status and subject to change. You may lose the payment if your income increases, <Care recipient>’s health status changes or changes are made to the eligibility criteria.

Your application will need to be processed and assessed before the payment starts.

Should your circumstances change, you will need to notify Centrelink within 14 days.

15. Apply for the Centrelink Age Pension We recommend that you apply for the Centrelink Age Pension to assist in meeting your retirement income needs. Based on total assessable assets of $XXX and a total fortnightly assessable income of $XXX, you are eligible to receive a combined Age Pension of $XXX per fortnight ($XXX each).

Benefits:   

  

Access to the government pension will help to supplement your retirement income, helping you meet your ongoing living costs.

Utilising this pension income will help preserve your retirement savings for future income needs.

You may be entitled to other payments and benefits, which include: o Pensioner Concession Card o Pension Supplement o Energy Supplement o Remote Area Allowance (if eligible) o Rent Assistance (if eligible) You will receive cheaper medicine under the Pharmaceutical Benefits Scheme.

Your Doctor may provide bulk-billing visits.

You will also receive discounts on utility bills, rates, public transport and other health care costs.

Points to Consider:      

The Age Pension amount you receive is reviewed on a regular basis. If your financial circumstances change, your payment could be impacted.

You will be subject to a number of qualification tests and conditions based on your age, home ownership, marital status as well as the Income and Asset ‘means’ test.

The Age Pension payment is indexed twice a year (March and September) to help keep up with inflation.

You must notify Centrelink of any significant changes or extended overseas travel (more than 6 weeks), within 14 days, for a review of your entitlements.

Centrelink payments are subject to legislative change which may impact your entitlement in the future. A review of your income requirements will be needed should this happen.

Age pension payments form part of your assessable (taxable) income. You may receive a Senior Tax Offset to reduce tax payable.

16. Apply for the Commonwealth Seniors Health Care Card (CSHCC) We recommend that you apply for the Seniors Health Care Card. We estimate, based on your current income, that you will be eligible for this concession card.

There is no Assets test when applying for this card.

Benefits:   

You will receive cheaper medicine under the Pharmaceutical Benefits Scheme.

Your Doctor may provide bulk-billing visits.

You may also receive discounts on utility bills, rates, public transport and other health care costs.

Points to Consider:   

The CSHCC is issued annually. You will need to reapply each year and meet the income test at that time.

Eligibility for the Seniors Health Care card is based on your income as provided by you. If this is inaccurate or changes, you may exceed the income limit and lose access to the CSHCC. Extended overseas travel may impact the validity of your CSHCC.

14

 

Your application will need to be processed and assessed before you receive the CSHCC. Should your circumstances change, you will need to notify Centrelink within 14 days.

17. Apply for a Disability Support Pension We recommend that you apply for the Disability Support Pension. As you are under ‘Age pension’ age and have a permanent disability / medical condition, you are eligible to apply. We estimate, based on your current financial position, you will receive a pension of $XXX ($XXX p.a.).

Benefits:   

Pension payments will assist in meeting your everyday living and medical costs.

You may also receive discounts on utility bills, rates, public transport and other health care costs.

You can access additional allowances and benefits such as rent assistance.

Points to Consider: 

  

The entitlement we have estimated here is based on your current financial position. If this is inaccurate or you have a significant change in circumstances, your entitlements will change as eligibility is based on an income and asset test.

You must notify Centrelink of any significant changes, or extended overseas travel, within 14 days, for a review of your entitlements.

Centrelink payments are subject to legislative change which may impact the amount of your entitlement in the future. A review of your income requirements will be needed should this happen.

Disability Support Pension payments form part of your assessable (taxable) income. You may receive a Senior Tax Offset to reduce tax payable.

15

18. Apply for Department of Veterans’ Affairs (DVA) Entitlements We recommend that you apply for Department of Veterans’ Affairs entitlements. Based on our current estimate of your entitlements and your financial position, we believe you are eligible for a Service / Age Service / Invalidity Service / Partner Service pension or Veteran payment of $XXX per fortnight ($XXX p.a.) You may also be eligible for a Defence Force Income Support allowance / Rent assistance / Remote Area allowance and/or a Pension / Veteran / Income Support / Energy supplement and/or an Energy Assistance Payment.

Benefits:      

Access to DVA entitlements will help to supplement your income, helping you meet your ongoing living costs.

Utilising this income will help preserve your investment savings for future income needs.

The DVA entitlements may give you access to other discounts and benefits such as rent assistance.

You will receive cheaper medicine under the Pharmaceutical Benefits Scheme.

Your Doctor may provide bulk-billing visits.

You will also receive discounts on utility bills, rates, public transport and other health care costs.

Points to Consider:  

 

DVA payments are subject to legislative change which may impact the amount of your entitlement in the future.

A review of your income requirements will be needed should this happen.

[Means tested] The entitlement we have estimated here is based on your current financial position. If this is inaccurate or you have a significant change in circumstances, your entitlements will change as eligibility is based on an income and asset test.

[Means tested] You must notify DVA of any significant changes, within 14 days, for a review of your entitlements.

Extended overseas travel may impact your entitlement therefore it is important that you notify the DVA of these plans.

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19. Gift $XXX to increase your Centrelink Entitlements We recommend that you gift $XXX to <gift recipient> from your XXX account / investment. We estimate that this will reduce your Centrelink assessable assets by this amount which will in turn increase your Centrelink entitlements by $XXX per fortnight ($XXX p.a.).

Benefits:   

Gifting cash or assets up to $10,000 per annum and no more than$30,000 over 5-year limits, will reduce your assessable assets and increase your Centrelink entitlements.

You will have more income to help meet your everyday living costs.

You can assist <Gift recipient> by providing $XXX to <outline how the money is to be used>.

Points to Consider:    

You will no longer have this cash at your disposal for spending.

You will only receive a small increase in your Centrelink payment relatively to the gift you make. The long-term value of this lump sum is potentially more than the additional payment you will receive.

Centrelink payments are subject to legislative change which may impact the amount of your entitlement in the future.

Gifting to reduce your Centrelink assessable assets is subject to a $10,000 limit in one year and $30,000 limit over 5 years. If you have already gifted cash or assets, it may impact the estimates of your entitlement here.

20. Apply for Jobseeker Payment We recommend that you apply for Jobseeker with Centrelink. This will help you to meet your living expenses whilst you look for a new job. We estimate, based on your current income and assets, you will be eligible for $XXX per fortnight ($XXX p.a.).

Benefits:  

Jobseeker will give you a fortnightly payment that you can use to meet your living expenses.

You will also get access to a Health Care Card providing discounts on bills and medical costs.

Points to Consider:     

Payment of Jobseeker is subject to a waiting period depending on your asset level. We estimate that your waiting period will be XX weeks.

Centrelink payments are subject to legislative change which may impact the amount of your entitlement in the future.

Jobseeker is only payable whilst you are looking for work. Proof must be provided to Centrelink on request.

You may work part time however your payment will be reduced for income earnt.

You must notify Centrelink of any significant changes, within 14 days, for a review of your entitlements.

17

21. Apply for Parenting Payment We recommend that you apply the Parenting payment. Based on our estimates, you may be eligible for a fortnightly payment of $XX after the waiting period of XX weeks.

Benefits:  

This income payment will assist with your parenting costs whilst raising young children.

This will assist in replacing some of your lost employment income whilst caring for children.

Points to Consider:   

This parenting payment is subject to a waiting period depending on your employment and leave / cash receipts.

We estimate that your waiting period will be XX weeks.

Centrelink payments are subject to legislative change which may impact the amount of your entitlement in the future.

You must notify Centrelink of any significant changes, within 14 days, for a review of your entitlements.

22. Maintain your Pension Bonus Scheme We recommend that you continue working which will help you meet the work test to receive your pension bonus. The amount will be determined as a single payment dependent on your age pension also.

Benefits:   

You can receive a significant lump sum bonus for continuing to work once you reach age pension eligibility age.

This money can assist in meeting your retirement income needs once you cease work.

This is a monetary reward for continuing to work when you could retire and claim the Centrelink Age Pension.

Points to Consider: Things that can affect your payment include: 

   

 

You must be an accruing member for at least 1 year. As a registered member you can accrue bonus periods toward your Pension Bonus if you meet all of the following. You: o pass the work test o are younger than 75 o aren’t in a period of non-accruing membership.

Centrelink cap your bonus at 5 years of accruing membership You can’t build up your bonus once you turn 75 If you can’t get Age Pension, you can’t get a bonus When Centrelink calculate your bonus, they don’t add extra benefits to your Age Pension, such as: o Rent Assistance o Pension Supplement, or o Remote Area Allowance If you can get a part rate Age Pension, you may get a part rate bonus.

Pension Bonus is no longer open to new applicants, only existing arrangements will now be paid.

18

23. Centrelink Rent Assistance We recommend that in addition to applying for <Centrelink allowance / pension>, you may also be eligible for rent assistance.

If you receive certain payments from Centrelink such as age pension, you do not need to submit a claim for rent assistance.

Centrelink will check if you are eligible for rent assistance.

Centrelink will ask for a copy of a formal tenancy agreement. They may also send you a Rent Certificate to complete and return. They use this to confirm how much rent you pay.

Benefits:  

Rent assistance is paid by Centrelink when you receive certain payments or receive more than the base rate of Family Tax Benefit.

These payments will help in paying your rent bills / board / lodgings / retirement village fees.

Points to Consider:   

You will need to provide Centrelink with evidence of your rent such as the rental contract.

Centrelink payments are subject to legislative change which may impact the amount of your entitlement in the future.

You must notify Centrelink of any significant changes, including a change of address within 14 days, for a review of your entitlements.

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24. Commence an Investment Portfolio with a Margin Lending Facility We recommend that you borrow to invest, using a margin lending facility. The recommended investment portfolio will be used as security for the loan. We recommend you borrow $XXX with the balance of $YYY to be funded from your XXX account / existing investments.

[Fixed Rate] We recommend you fix the interest rate at XX% as it is lower than the variable rate and gives you certainty of your payment. Based on the recommended loan value, the monthly repayments will be $XXX. [Variable Rate] We recommend you take the variable rate of interest at XX%. Based on the recommended loan value, the current monthly repayments would be $XXX. We recommend that you pay the loan interest directly from your cash flow and reinvest dividends and/or distributions into your portfolio / fund OR have dividends and / or distributions paid to you to assist in funding interest payments.

Benefits:   

Using debt to increase your investment portfolio gives you access to potentially more capital growth and income.

Loan interest for investing is tax deductible to you as the borrower. You can bring forward this tax deduction by pre-paying the annual interest each financial year.

Having a larger investment portfolio with the use of debt allows you to increase the diversity of investments which in turn reduces your portfolio risk by spreading the risk across different asset classes.

Points to Consider: 





 



Just as having an increased portfolio size can magnify your gains, they can also magnify your losses when the markets go down. Volatility in your portfolio will be higher. It is important that you are comfortable with this type of strategy. A minimum of 7 years is recommended for this type of strategy.

Interest rates on margin lending facilities are higher than other loans such as your mortgage. The current variable rate is XXX% and the fixed rate for XX years is XXX%. We have looked at your cash flow to make sure that if interest rates are to increase by 3%, you could still afford to meet the repayments. Please refer to our financial projections in the Annexure for further details.

Interest rates are subject to change. [Variable rate] As the recommended rate is variable, the rate can change at any time. [Fixed rate] At the end of the fixed period, the interest rate may have changed significantly, impacting future cash flow.

You cannot borrow 100% and each investment will have a different level of finance available (known as the loanto-value ratio or LVR).

Margin loans are subject to margin calls. This means that if your investments fall below the required LVR, you are required to make a cash payment, sell down investments or provide additional security such as investments, to reduce the LVR back within the acceptable limits (to pay down the loan). Margin calls need to be met instantly so having cash or other assets available to meet these payments is recommended. Otherwise, the lender may sell down your portfolio to meet the margin call. Based on our recommendations here, we expect the overall LVR of your portfolio to start at XXX%.

Borrowing to invest requires strong cash flow to support the strategy. Costs can be significant if the strategy is unwound prematurely. Please contact our office for immediate review if your cash flow changes.

25. Consolidate your Debt We recommend that you consolidate your debt. We recommend that you combine your credit card of $XXX / personal loan of $XXX / car loan of $XXX / overdraft of $XXX into a single loan. We estimate that your interest expense will reduce from $XXX to $YYY in the first year of consolidation. This will free up your cash flow for your goal to XXX / assist in meeting living expenses / building your cash reserves / other.

Benefits:      

We estimate that over the course of your debt repayment, you will save $XXX in interest costs.

Reduce administration of your loan accounts.

Reduce fees by reducing the number of loan accounts you have. We estimate this reduction to be $XXX in the first year.

Reduce your interest expense by approximately $XXX in the first year.

Reduce the financial stress of having multiple debts to service.

Free up your cash flow for other needs / goals.

Points to Consider:

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     

You will no longer have access to additional lines of credit.

There may be break costs associated with paying out your debts. We estimate these to be $X. You will need to apply for a higher amount of credit to consolidate your debt and approval is subject to the lender’s criteria.

[No credit licence] We do not have a credit licence to provide advice on which lending product may be appropriate for your needs. You should seek specialist advice on this.

The term of repayment for your consolidated debts may be longer than some of the individual debt terms.

Changes in interest rates will impact the estimated outcomes of our advice.

26. Implement a Debt Recycling Strategy We recommend that you implement a debt recycling strategy:   

Set up an investment line of credit on your home to purchase an investment portfolio.

All income and tax savings generated by this investment strategy will be used to pay down your mortgage, freeing up further equity for you to invest.

Over time, this strategy is designed to pay down your mortgage quicker and build an investment portfolio using borrowed funds.

We recommend an initial investment loan of $XX to combine with your cash/investments of $YYY to start your investment portfolio. Specific investment recommendations are outlined in more detail later in this SoA. We will review annually / quarterly / monthly how much you pay down your mortgage and then drawdown on your investment line of credit in line with this to build your investment portfolio. We estimate at the end of year 1, you will draw additional funds of $XXX to invest.

Benefits: 

  

Interest on investment debt is tax-deductible and borrowing for your home is not. Debt recycling allows you to build more tax-effective debt (and reduce the non-deductible debt) for the purpose of building an investment portfolio.

We estimate that your home loan (non-deductible debt) will be paid off XX years earlier by implementing this strategy. Please refer to our financial projections at the end of the SoA for further explanation.

Using debt to increase your investment portfolio gives you access to potentially more capital growth and income.

Having a larger investment portfolio with the use of debt allows you to increase the diversity of investments which in turn reduces your risk by spreading the risk across different asset classes.

Points to Consider: 

  



 

You will need to apply for an investment line of credit to enable this strategy. [No credit licence] We are not licenced to advise you on a particular product for your investment line of credit. Please seek specialist lending advice.

Interest rates on investment lines of credit are higher than other loans such as your mortgage. The current variable rate is XXX% and the fixed rate for XX years is XXX%.

We have looked at your cash flow to ensure that if interest rates are to increase by 3%, you could still afford to meet the repayments. Please refer to our financial projections at the end of this SoA for further details.

Just as having an increased portfolio size can magnify your gains, they can also magnify your losses when the markets go down. Volatility in your portfolio will be higher. It is important that you are comfortable with this. A minimum of 7 years is recommended for this type of strategy.

Interest rates are subject to change. [Variable rate] As the recommended rate is variable, the rate can change at any time. [Fixed rate] At the end of the fixed period, the interest rate may have changed significantly, impacting future cash flow.

An annual / quarterly / monthly review of this strategy is critical to its success so that we can draw down further on your investment line of credit to top up your investment portfolio.

Borrowing to invest requires strong cash flow to support the strategy. Costs can be significant if the strategy has to be unwound prematurely. Please contact our office for immediate review if your cash flow changes.

27. Establish a Loan Offset account We recommend that you open an offset account on your home mortgage account. This account will sit parallel to your loan so that you can deposit your salary and any other income. The value of your deposits will be offset on your loan balance,

21

reducing the interest you pay on your mortgage. We recommend that you deposit an initial amount of $XXX from your YYY cash / investment account to open the offset.

Benefits:     

This will assist to meet your goals by reducing the level of interest payable over the term of the loan; we estimate the term of your loan to reduce by XX years.

As interest is calculated daily on your mortgage, any deposits that offset the loan value, will reduce the interest payable. We estimate the 1st year reduction in interest to be $X. You may pay off your mortgage sooner by reducing the interest expense.

Your salary and income can be automatically redirected to your offset like a bank account.

You will continue to have access to these funds as you need for day to day living and unexpected expenses.

Points to Consider:   

There will be fees to set up the Offset account as well as ongoing fees to maintain it. We estimate establishment costs to be $X and the ongoing fee to be $X p.a.

[No credit licence] We are unable to make specific product recommendations for the selection of your Offset account. Please seek specialist lending advice on this.

Access to your funds may vary from one offset account to another. Check what the requirements are so that you can continue to meet your cash flow needs.

28. Increase the Frequency of your Loan Repayments We recommend that you increase the frequency of your loan repayments. We recommend that you change from monthly / fortnightly to fortnightly / weekly repayments to be in line with your salary payments.

Benefits: 

 

We estimate that implementing our recommendations will reduce your loan term by XX years and interest expense over the term of the loan by $YYY. Please refer to our financial projections at the end of the SoA for further details.

You will not need to adjust your current lifestyle to implement the recommendations.

By simply increasing the frequency of your repayments, you can make significant savings.

Points to Consider:  

Changes in interest rates will impact the estimated outcomes of our advice.

Changes to your cash flow should be reviewed by our office immediately as this may impact the appropriateness of our advice.



There may be limits on how much you can repay and the frequency of repayments. This is especially the case with fixed loans.

We have not considered in this advice if your current mortgage is the right mortgage for your situation. This advice only focuses on the cash flow impact to your situation.



29. Increase your Loan Repayments We recommend that you increase your loan repayments. We recommend that you increase your repayment from $XXX to $YYY per fortnight / month to utilise your cash flow surplus to reduce your loan quicker.

Benefits: 

 

We estimate that implementing our recommendations will reduce your loan term by XX years and interest expense over the term of the loan by $YYY. Please refer to our financial projections at the end of the SoA for further details.

You will not need to adjust your current lifestyle to implement the recommendations.

Your surplus cash flow will help to reduce your mortgage.

Points to Consider:  

You will have less cash flow surplus at your disposal for unexpected expenditure.

You will need to change your banking transactions to include this increase in payment.

22

    

Changes in interest rates will impact the estimated outcomes of our advice.

Changes to your cash flow should be reviewed by our office immediately as this may impact the appropriateness of our advice.

There may be limits on how much you can repay. This is especially the case with fixed loans.

You may not be able to redraw these extra repayments in a time of financial need.

We have not considered in this advice if your current mortgage is the right mortgage for your situation. This advice only focuses on the cash flow impact to your situation.

30. Commence a Regular Gearing Strategy We recommend you commence a regular gearing strategy to build your investment portfolio. By drawing additional instalments from the loan to invest, you will build your wealth faster and fund it from a combination of your cashflow and margin lending facility. We recommend that you contribute $XXX per month from your cashflow and draw $YYY per month from the loan account. Combined you will contribute $XXX to your investment portfolio in the first year. The recommended investment portfolio will be used as security for the loan. You cannot borrow 100% and each investment will have a different level of finance available (known as the loan-to-value ratio or LVR). [Existing investment portfolio / margin lending facility] This regular gearing strategy will be added to your existing investment portfolio and margin lending facility. [New portfolio / margin lending facility] We recommend that you make an initial investment of $XXX to start the investment portfolio and margin lending facility.

Benefits:    

Regular investment allows dollar cost averaging whereby the entry price on the investments has the effect of being averaged out over time, potentially reducing the overall cost of the investment.

Using debt to increase your investment portfolio gives you access to potentially increased capital growth and income.

Loan interest for investing is tax-deductible. You can bring forward this tax deduction by pre-paying the annual interest each financial year.

Having a larger investment portfolio with the use of debt allows you to increase the diversity of investments which in turn reduces your risk by spreading the risk across different asset classes

Points to Consider:   







Interest rates on margin lending facilities are higher than other loans such as your mortgage. The current variable rate is XXX% and the fixed rate for XX years is XXX%.

We have looked at your cash flow to make sure that if interest rates are to increase by 3%, you could still afford to meet the repayments. Please refer to our financial projections at the end of this SoA for further details.

Margin loans are subject to margin calls. This means that if your investments fall below the required LVR, you are required to make a cash payment, sell down investments or provide additional security such as investments, to reduce the LVR back within the acceptable limits (to pay down the loan). Margin calls need to be met instantly so having cash or assets available to meet these payments is recommended otherwise the lender may sell down your portfolio to meet the margin call. Based on our recommendations here, we expect the overall LVR of your portfolio to start at XX%.

Just as having an increased portfolio size can magnify your gains, they can also magnify your losses when the markets go down. Volatility in your portfolio will be higher. It is important that you are comfortable with this type of strategy. A minimum of 7 years is recommended for this type of strategy.

Interest rates are subject to change. [Variable rate] As the recommended rate is variable, the rate can change at any time. [Fixed rate] At the end of the fixed period, the interest rate may have changed significantly, impacting future cash flow.

Borrowing to invest requires strong cash flow to support the strategy. Costs can be significant if the strategy has to be unwound prematurely. Please contact our office for immediate review if your cash flow changes.

31. Repay your Non-Deductible Debt We recommend that you repay your non-deductible debt of $XXX from your <Source of funds> account.

Benefits:   

We estimate that you will save $XXX in interest, when comparing your current rate of return to what you are paying on your loan.

We estimate this will reduce your loan term by XX years.

Repaying your non-deductible debt will free up your cash flow to direct to your wealth creation goals / to help you focus on saving for retirement / to help meet day-to-day living costs / to meet a specific goal.

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

[Pay total debt] You will repay all debt in preparation for your retirement / other.

Points to Consider:      

You will no longer have access to $XXX in your cash / investment / savings account.

[Pay total debt] You will not have access to this debt for future borrowings. You will need to reapply for finance should you need it.

There may be fees associated with making a lump sum payment against your loan.

There may be limits on how much you can pay to your loan as a lump sum. This is especially the case with fixed loans.

You may not be able to redraw this lump sum payment in a time of financial need.

We have not considered in this advice if your current mortgage is the right mortgage for your situation. This advice only focuses on the cash flow impact to your situation.

32. Use your Home Equity to Invest We recommend that you borrow against the equity you have in your home, to invest in a diversified investment portfolio.

We recommend that you initially draw $XXX and we will review this each year to look at topping up your investments with additional drawdowns.

Further information regarding the selection of the investment portfolio will be explained in detail later in this SoA. Benefits:   

Using debt to increase your investment portfolio gives you access to potentially increased capital growth and income.

Loan interest for investing is tax-deductible to the borrower. You can bring forward this tax deduction by prepaying the annual interest each financial year.

Having a larger investment portfolio with the use of debt allows you to increase the diversity of investments which in turn reduces your risk by spreading the risk across different asset classes.

Points to Consider:    





Your home will be security for your investment portfolio.

Interest rates on investment lending facilities are higher than other loans such as your mortgage. The current variable rate is XXX% and the fixed rate for XX years is XXX%.

We have looked at your cash flow to make sure that if interest rates are to increase by 3%, you could still afford to meet the repayments. Please refer to our financial projections at the end of this SoA for further details.

Just as having an increased portfolio size can magnify your gains, they can also magnify your losses when the markets go down. Volatility in your portfolio will be higher. It is important that you are comfortable with this type of strategy. A minimum of 7 years is recommended for this type of strategy.

Interest rates are subject to change. [Variable rate] As the recommended rate is variable, the rate can change at any time. [Fixed rate] At the end of the fixed period, the interest rate may have changed significantly, impacting future cash flow.

Borrowing to invest requires strong cash flow to support the strategy. Costs can be significant if the strategy has to be unwound prematurely. Please contact our office for immediate review if your cash flow changes.

33. Establish your Estate Plan We recommend that you seek legal advice to undertake a complete review of your Estate Planning needs including:       

Establish your Will/s.

Establish your Powers of Attorney including Enduring (financial / medical), Limited and General.

Consider an Advance Health Care Plan.

[Testamentary Trust] Look at inclusion of a Testamentary Trust within your Will/s.

Review of all significant assets and beneficiaries.

Discussion regarding solutions for possible challenges to your Estate.

[Binding Death Nominations] A review of superannuation / pension death benefit nominations to ensure they are up to date / in place.

Benefits: 

Establishing a valid Will can assist in your assets being distributed according to your wishes upon death.

24

       

[Guardianship] You can nominate a guardian for your children.

You will avoid additional costs to your Estate that can be significant if you die without a Will.

[PoA] Having a Power of Attorney in place lets you decide who makes decisions on your behalf when you cannot.

[PoA] You can communicate your intentions in the event of medical emergency and / or death, to your nominated PoA. [Testamentary Trust] Provides flexibility and control over when and how beneficiaries take their inheritance.

[Testamentary Trust] A Testamentary trust will allow you to nominate the distribution of assets and income from your Estate.

[Testamentary Trust] Testamentary trusts provide more protection of assets than if your beneficiaries were to receive them as individuals.

[Testamentary Trust] Income can be split to minimise tax to beneficiaries.

Points to Consider: 

          

[If Non-estate assets] Not all assets are included in your estate for distribution via your Will. Your non-estate assets include <tailor for client: superannuation / account-based pension / life insurance policies / jointly owned assets / assets owned through a trust or company / other>.

[Child guardianship] You will need to include guardianship as part of the Will.

A poorly constructed Will can be contested post-death or ruled as invalid and disregarded.

Significant changes to circumstances can affect the validity of your Will. Ensure that you keep your Will up to date.

Dependents needs to be adequately provided for in your Will.

You need to keep your super / pension / life insurance nominations up to date so that they reflect your wishes.

[PoAs] You will need to engage your nominated PoAs as part of the process in establishing your PoAs. [Testamentary Trust] There will be costs associated with establishing a Testamentary trust. Please review these in light of the benefits before proceeding.

[Testamentary Trust] Your circumstances may change and impact the effectiveness of the Trust. Please ensure that you review your Estate Plan regularly to reflect your current financial position and desired beneficiaries.

[Testamentary Trust] Where beneficiaries have a controlling interest in the Trust, all income and assets of the Trust will be assessable for Centrelink means testing. This could result in a reduction of the beneficiaries Centrelink benefits (if they receive benefits).

[Testamentary Trust] Where beneficiaries do not have a controlling interest in the Trust, income they receive will be assessable for Centrelink purposes and may reduce their Centrelink benefits (if they receive benefits).

[Super / Pension] Your super and pension benefits do not automatically form part of your Estate although you can nominate them to do so. It is important to make sure you have nominated beneficiaries for the Trustee of the Fund to take into consideration when paying your benefits.

34. Review your Estate Plan We recommend that you seek professional legal advice to undertake a complete review of your Estate Planning needs including:       

Review your Will/s.

Review your Powers of Attorney including Enduring (financial / medical), Limited and General.

Consider an Advance Health Care Plan.

[Testamentary Trust] Look at inclusion of a Testamentary Trust within your Will/s.

Review of all significant assets and beneficiaries.

Discussion and solutions for possible challenges to your Estate.

[Binding Death Nominations] A review of superannuation / pension death benefit nominations to ensure they are up to date / in place.

Benefits:      

Maintaining a valid Will can assist in your assets being distributed according to your wishes upon death.

[Guardianship] You can nominate a guardian for your children.

You will avoid additional costs to your Estate that can be significant if you die without a Will.

[PoA] Having a Power of Attorney in place lets you decide who makes decisions on your behalf when you cannot.

[PoA] You can communicate your intentions in the event of medical emergency and / or death, to your nominated PoA. [Testamentary Trust] Provides flexibility and control over when and how beneficiaries take their inheritance.

25

  

[Testamentary Trust] A Testamentary trust will allow you to nominate the distribution of assets and income from your Estate.

[Testamentary Trust] Testamentary trusts provide more protection of assets than if your beneficiaries were to receive them as individuals.

[Testamentary Trust] Income can be split to minimise tax to beneficiaries.

Points to Consider: 

          

[If Non-estate assets] Not all assets are included in your estate for distribution via your Will. Your non-estate assets include <tailor for client: superannuation / account-based pension / life insurance policies / jointly owned assets / assets owned through a trust or company / other>.

[Child guardianship] You will need to include guardianship as part of the Will.

A poorly constructed Will can be contested post-death or ruled as invalid and disregarded.

Significant changes to circumstances can affect the validity of your Will. Ensure that you keep your Will up to date.

Dependents needs to be adequately provided for in your Will.

You need to keep your super / pension / life insurance nominations up to date so that they reflect your wishes.

[PoAs] You will need to engage your nominated PoAs as part of the process in reviewing your PoAs. [Testamentary Trust] There will be costs associated with establishing a Testamentary trust. Please review these in light of the benefits before proceeding.

[Testamentary Trust] Your circumstances may change and impact the effectiveness of the Trust. Please ensure that you review your Estate Plan regularly to reflect your current financial position and desired beneficiaries.

[Testamentary Trust] Where beneficiaries have a controlling interest in the Trust, all income and assets of the Trust will be assessable for Centrelink means testing. This could result in a reduction of the beneficiaries Centrelink benefits (if they receive benefits).

[Testamentary Trust] Where beneficiaries do not have a controlling interest in the Trust, income they receive will be assessable for Centrelink purposes and may reduce their Centrelink benefits (if they receive benefits).

[Super / Pension] Your super and pension benefits do not automatically form part of your Estate although you can nominate them to do so. It is important to make sure you have nominated beneficiaries for the Trustee of the Fund to take into consideration when paying your benefits.

35. Establish your Will/s We recommend that you seek legal advice to establish your Will/s.

Benefits:    

Establishing a valid Will can assist in your assets being distributed according to your wishes upon death.

You can bequest specific assets to people / organisations.

[Child guardianship] You can nominate a guardian for your children.

You will avoid additional costs to your Estate that can be significant if you die without a Will.

Points to Consider: 

   

[Non-estate] Not all assets are included in your estate for distribution via your Will. Your non-estate assets include <tailor for client: superannuation / account-based pension / life insurance policies / jointly owned assets / assets owned through a trust or company / other>.

[Child guardianship] You will need to include guardianship as part of the Will.

A poorly constructed Will can be contested post-death or ruled as invalid and disregarded.

Significant changes to circumstances can affect the validity of your Will. Ensure that you keep your Will up to date.

Dependants needs to be adequately provided for in your Will.

36. Review your Will/s We recommend that you seek legal advice to review your Will/s.

26

Benefits:    

Maintaining a valid Will can assist in your assets being distributed according to your wishes upon death.

You can bequest specific assets to people / organisations.

[Child guardianship] You can nominate a guardian for your children.

You will avoid additional costs to your Estate that can be significant if you die without a Will.

Points to Consider: 

   

[Non-estate] Not all assets are included in your estate for distribution via your Will. Your non-estate assets include <tailor for client: superannuation / account-based pension / life insurance policies / jointly owned assets / assets owned through a trust or company / other>.

[Child guardianship] You will need to include guardianship as part of the Will.

A poorly constructed Will can be contested post-death or ruled as invalid and disregarded.

Significant changes to circumstances can affect the validity of your Will. Ensure that you keep your Will up to date.

Dependants needs to be adequately provided for in your Will.

37. Establish your Powers of Attorney We recommend that you seek legal advice to establish your Powers of Attorney (PoA). You should consider general, enduring, financial and medical Powers of Attorney.

Benefits:   

 

A Power of Attorney will allow you to choose who makes decisions on your behalf when you cannot.

You can communicate your intentions in the event of medical emergency and / or death, to your nominated PoA. [General Power of Attorney] A general Power of Attorney allows you to appoint a person to make financial and legal decisions for you, usually for a specified period of time. For example, if you are overseas and unable to manage your legal affairs at home. This personal appointment becomes invalid if you lose the capacity to make decisions for yourself. ‌[Enduring Power of Attorney] An Enduring Power of Attorney allows you to appoint a person to make financial and legal decisions if you lose the capacity to make your own decisions. ‌[Medical Power of Attorney] A Medical Power of Attorney allows you to appoint a person to make only medical decisions on your behalf if you become unable to do so yourself.

Points to Consider:      

You need to keep your nominations up to date so that they reflect your wishes.

You will need to engage your nominated PoAs as part of the process in establishing your PoAs. Powers of Attorney depend on the state or territory you are in; they can refer to just financial powers, or they might include broader guardianship powers. You may need to check with your local Public Trustee.

You should carefully consider who to appoint to be your Power of Attorney, because this person will be responsible for important decisions made on your behalf.

You may be able to nominate more than one person to act jointly, or jointly and severally.

Once your paperwork is in order, it will help your executor and family if you list the legal documents you have and where they are kept. Records of personal information as well as asset details, ownership etc can be helpful also.

38. Review your Powers of Attorney We recommend that you seek legal advice to review your Powers of Attorney (PoA). You should consider general, enduring, financial and medical Powers of Attorney.

Benefits:   



A Power of Attorney will allow you to choose who makes decisions on your behalf when you cannot.

You can communicate your intentions in the event of medical emergency and / or death, to your nominated PoA. [General Power of Attorney] A general Power of Attorney allows you to appoint a person to make financial and legal decisions for you, usually for a specified period of time. For example, if you are overseas and unable to manage your legal affairs at home. This personal appointment becomes invalid if you lose the capacity to make decisions for yourself. ‌[Enduring Power of Attorney] An Enduring Power of Attorney allows you to appoint a person to make financial and legal decisions if you lose the capacity to make your own decisions.

27



[‌ Medical Power of Attorney] A Medical Power of Attorney allows you to appoint a person to make only medical decisions on your behalf if you become unable to do so yourself.

Points to Consider:      

You need to keep your nominations up to date so that they reflect your wishes.

You will need to engage your nominated PoAs as part of the process in reviewing your PoAs. Powers of Attorney depend on the state or territory you are in; they can refer to just financial powers, or they might include broader guardianship powers. You may need to check with your local Public Trustee.

You should carefully consider who to appoint to be your Power of Attorney, because this person will be responsible for important decisions made on your behalf.

You may be able to nominate more than one person to act jointly, or jointly and severally.

Once your paperwork is in order, it will help your executor and family if you list the legal documents you have and where they are kept. Records of personal information as well as asset details, ownership etc can be helpful also.

39. Purchase a Funeral Bond We recommend that you prepay your funeral expenses through a Funeral Bond. We recommend that you fund the $XXX bond from your <Source of Funds>. This will leave a balance of $X in this account / investment.

Benefits:    

 

You will reduce the financial burden on your family by funding your funeral.

Upon your death, the investment can be redeemed to pay funeral costs. If the expenses are less than the balance of your investment, the remainder is available for your estate.

Centrelink and the Department of Veteran Affairs do not include the value of Funeral Bonds in assessable assets up to a specified limit. This limit is currently $14,000 per bond and is reviewed on 1 July each year.

Interest is added to the investment so that your balance will grow. The interest is added tax-free to boost returns. The total value can grow over the $14,000 limit and will be fully exempt, provided you did not invest more than the allowable threshold.

[Increased Centrelink benefit] This will result in your pension increasing from $XXX per fortnight to $YYY per fortnight giving you an annual saving of $ZZZ. This allows you to give direction as to where and what type of funeral you will have.

Points to Consider:    

A jointly owned funeral bond is assessed as one bond, rather than two to represent each life.

The increase in your pension payment may be minimal compared to the loss of the lump sum to purchase the funeral bond. It is important that you have adequate cash reserves for unexpected expenditure that may arise.

You will need to notify Centrelink of the purchase of the Funeral Bond If you invest more than the $14,000 threshold, the whole investment is assessable.

40. Implement a Testamentary Trust We recommend that you seek legal advice to establish a testamentary trust as part of your Will and broader Estate Plan.

You will need to map out how you would like the allocation of inheritance to be distributed and who the beneficiaries of the Trust will be.

Benefits:   

A Testamentary trust will allow you to nominate the distribution of assets and income from your Estate.

Testamentary trusts provide more protection of assets than if your beneficiaries were to receive them as individuals.

Income can be split to minimise tax to beneficiaries.

Points to Consider:  

There will be costs associated with establishing a Testamentary trust. Please review these in light of the benefits before proceeding.

Your circumstances may change and impact the effectiveness of the Trust. Please ensure that you review your Estate Plan regularly so that it reflects your current financial position and desired beneficiaries.

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

Trust income will be assessable for Centrelink purposes and may impact your beneficiaries benefit payments.

41. Adjust your personal insurance cover We recommend that you adjust your level of cover to reflect recent changes to your circumstances. <Explain what those changes are>.

Client:      

[Life] Increase / Reduce your <Insurer> Life insurance to $XXX [TPD] Increase / Reduce your <Insurer> TPD insurance to $XXX [Trauma] Increase / Reduce your <Insurer> Trauma insurance to $XXX [Income Protection] Increase / Reduce your <Insurer> Income Protection to $XXX per month [IP Waiting Period] Increase / Reduce your <Insurer> Income Protection waiting period from a <Waiting period> waiting period to a <Waiting period> waiting period [IP Benefit Period] Increase / Reduce your <Insurer> Income Protection from a benefit period of <Benefit Period> to a benefit period of <Benefit Period>.

The premiums for this risk protection insurance will be sourced from <cash flow / your XXX cash account / your XXX Super Fund>.

Partner:      

[Life] Increase / Reduce your <Insurer> Life insurance to $XXX [TPD] Increase / Reduce your <Insurer> TPD insurance to $XXX [Trauma] Increase / Reduce your <Insurer> Trauma insurance to $XXX [Income Protection] Increase / Reduce your <Insurer> Income Protection to $XXX per month [IP Waiting Period] Increase / Reduce your <Insurer> Income Protection waiting period from a <Waiting period> waiting period to a <Waiting period> waiting period [IP Benefit Period] Increase / Reduce your <Insurer> Income Protection from a benefit period of <Benefit Period> to a benefit period of <Benefit Period>.

The premiums for this risk protection insurance will be sourced from <cash flow / your XXX cash account / your XXX Super Fund>.

Benefits:          



   

Your insurance cover will now reflect your current needs.

[Increase] Your risk of being under-insured is reduced.

[Reduce] You can afford to reduce the levels of <Life / TPD / Trauma> cover because <Reason for reduction>.

[Reduce] Your Life insurance premium will reduce from $XXX to $XXX p.a. as a result of reducing your cover.

[Reduce] Your TPD insurance premium will reduce from $XXX to $XXX p.a. as a result of reducing your cover.

[Reduce] Your Trauma insurance premium will reduce from $XXX to $XXX p.a. as a result of reducing your cover.

[Reduce] Your Income Protection insurance premium will reduce from $XXX to $XXX p.a. as a result of reducing your cover / increasing your waiting period / decreasing your benefit period.

[Increase] Increasing your insurance cover will allow for <the repayment of your mortgage / children's education / ongoing income for XX years> in the event of your <death / illness / disablement>.

[Reduce] Reducing your insurance will give you increased cash flow to direct towards <other financial goal>.

[Super Ownership] We have recommended owning the <Insurance type> insurance cover inside superannuation because <insert reasons, eg the premiums are very competitive / your premiums can be paid tax-effectively using SG / salary sacrifice contributions / it reduces the impact on your cash flow / you can be automatically accepted>.

[Personal Ownership] We have recommended owning the <Insurance type> insurance cover outside superannuation because <the premiums are very competitive / you are able to claim a tax deduction for the cost of the premium / you prefer to pay from your cash flow / you can afford to pay this from your cash flow>.

[Monthly] Paying premiums monthly will help you to smooth the impact on your cash flow.

[Super Rollover] Paying your insurance via annual rollover will give you a 15% discount on your premiums.

[Yearly] Paying premiums annually will reduce the cost of your insurance.

[Income Protection tax deduction] Paying your income protection premiums from cash flow will allow you to claim a tax deduction in your tax return each year.

Points to Consider:

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  







   



[Increase] You may need to undergo further underwriting to increase your insurance cover.

[Increase] Your total premium will increase from $XXX to $XXX p.a. as a result of increasing your cover.

[Increase – Super ownership] The increased premiums will further erode your retirement savings. We estimate that at retirement, your superannuation balance will be $XXX less than if you did not pay your premiums through your super account.

[Reduce] If you decide to increase your insurance cover again in the future, the new cover may be difficult to obtain and/or may be more expensive. This is because your age and health are two important factors that determine eligibility for cover and the premiums you pay.

[Specified levels of cover] You have specified the level of cover for your Life / TPD / Trauma / IP insurance and as such, we cannot confirm if this level of cover is appropriate for your needs. You may be underinsured as a result and not have adequate cover in place to meet your financial commitments in the event of a claim.

We have estimated the impact of certain health events on your financial position. The actual impact may be more than we have calculated and therefore you may be underinsured. Significant changes to your circumstances may also impact the appropriateness of the level of cover recommended. Please contact our office to arrange a review in the event of any significant changes to your lifestyle and/or needs.

[Level] Level premiums may increase over time; they are not fixed rates.

[Stepped] Stepped premiums will increase each year in line with your age.

[Cash flow] The recommended insurance premiums will reduce your personal cash flow available for other expenditure.

[Super] We have recommended you pay $XXX p.a. through your XXX Superannuation Fund. This will reduce your retirement savings. We estimate that your balance will be $XXX lower at age 65 than if you do not pay insurance via your super account. Please refer to our financial projections at the end of the SoA for further explanation.

[Super] Holding life and TPD insurance within superannuation may result in tax being paid on benefits. This will result in the net payment amount being less than the calculated need. We recommend that you seek specialist tax advice to confirm the possible outcomes. [Gross up] We have grossed up your TPD benefit to allow for the tax payable on claim of TPD.

42. Establish your Risk Protection Plan We recommend that you establish a risk protection plan to support your wealth creation goals. We recommend you apply for personal insurance as follows:    

$XXX Life insurance on a stepped / level premium payable monthly / annually. $XXX Total and Permanent Disablement (TPD) ‘any’ / ’own’ occupation insurance on a stepped / level premium payable monthly / annually. $XXX Trauma insurance on a stepped / level premium payable monthly / annually. $XXX per month Income Protection insurance on a stepped / level premium. We recommend a <Waiting Period> waiting period with a benefit period of <Benefit Period>.

The premiums for this risk protection insurance will be sourced from cash flow / from your XXX cash account / from your XXX Super Fund.

Benefits: 

     

You will have funds available in the event of death / TPD / illness or injury to pay down your debts of $XX/ provide ongoing income of $YY to ZZZZ/ pay your children’s education fees / provide funds for your funeral costs / Other.

[Super] Structuring your insurance partly through superannuation will reduce the impact on your personal cash flow.

[Super Rollover] Paying your insurance via annual rollover will give you a 15% discount on your premiums.

[Monthly] Paying premiums monthly will help you to smooth the impact on your cash flow.

[Yearly] Paying premiums annually will reduce the cost of your insurance.

Your family will have financial support in place should anything happen to you and your ability to earn income.

[Income Protection tax deduction] Paying your income protection premiums from cash flow will allow you to claim a tax deduction in your tax return each year.

Points to Consider: 



We have recommended new insurance that will be underwritten by the insurer to assess your application. They may offer revised terms including higher premiums or health exclusions, depending on the outcome of their assessment.

Do not cancel any existing insurance cover prior to the recommended insurance being accepted and put into force.

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

  

      

  



[Specified levels of cover] You have specified the level of cover for your Life / TPD / Trauma / IP insurance and as such, we cannot confirm if this level of cover is appropriate for your needs. You may be underinsured as a result and not have adequate cover in place to meet your financial commitments in the event of a claim.

[Limited Information] You have not disclosed your full financial position for us to determine an appropriate level of cover. We have made some assumptions on what you need which may result in you being underinsured.

You need to complete your application for insurance honestly and with full disclosure. Failure to do so may give the insurer cause to void your policy and not pay claims in the future.

We have estimated the impact of certain health events on your financial position. The actual impact may be greater, and you may be underinsured. Significant changes to your circumstances may also impact the appropriateness of the level of cover recommended. Please contact our office to arrange a review in the event of any significant changes to your lifestyle and/or needs.

[Level] Level premiums may increase over time; they are not fixed rates.

[Stepped] Stepped premiums will increase each year in line with your age.

[Life] New life insurance policies generally have a 13-month suicide exclusion.

[Trauma] New trauma insurance policies generally have a 90-day waiting period on major medical events.

[IP] The amount you are paid at claim will depend on your income in the months leading up to your claim. This may mean you get paid less than the benefit amount you are insured for.

[IP] The benefit amount paid at claim can be offset by other payments such as leave entitlements and workers compensation etc.

[IP Change in definition] The definition of occupation you have to meet when on claim will change after XX years on claim. This will change from you being fit to do any occupation versus your own occupation, making it harder to meet the requirement when it changes.

[IP benefit payment to reduce when on claim] The amount you are paid on claim will reduce after XX years from XX% to XX% ($XX per month to $XX per month).

[Cash flow] The recommended insurance premiums will reduce your personal cash flow available for other expenditure.

[Super] We have recommended you pay $XXX p.a. through your XXX Superannuation Fund. This will reduce your retirement savings. We estimate that your balance will be $XXX lower at age 65 than if you do not pay insurance via your super account. Please refer to our financial projections at the end of the SoA for further details.

[Super] Holding life and TPD insurance within superannuation may result in tax being paid on benefits. This will result in the payment amount being less than the calculated need. We recommend that you seek specialist tax advice to confirm the possible outcomes. [Gross up] We have grossed up your TPD benefit to allow for the tax payable on claim of TPD.

31

43. Apply for Life & Total and Permanent Disablement (TPD) Insurance We recommend that you establish a risk protection plan to support your wealth creation goals. We recommend you apply for Life and TPD insurance as follows:  

$XXX Life insurance on a stepped / level premium payable monthly / annually. $XXX Total and Permanent Disablement (TPD) ‘any’ / ’own’ occupation insurance on a stepped / level premium payable monthly / annually.

The premiums for this risk protection insurance will be sourced from cash flow / from your XXX cash account / from your XXX Super Fund.

Benefits: 

   

You will have funds available in the event of death or TPD to pay down your debts of $XX / provide ongoing income of $YY to ZZZZ / pay your children’s education fees / provide funds for your funeral costs / make home modifications / Other.

[Super] Structuring your insurance partly through superannuation will reduce the impact on your personal cash flow.

[Super] Paying your insurance via annual rollover will give you a 15% discount on your premiums.

[Monthly] Paying premiums monthly will help you to smooth the impact on your cash flow.

Your family will have financial support in place should anything happen to you and your ability to earn income.

Points to Consider: 

 

  

    



We have recommended new insurance that will be underwritten by the insurer to assess your application. They may offer revised terms including higher premiums or health exclusions, depending on the outcome of their assessment.

Do not cancel any existing insurance cover prior to the recommended insurance being accepted and put into force.

[Specified levels of cover] You have specified the level of cover for your Life/TPD insurance and as such, we cannot confirm if this level of cover is appropriate for your needs. You may be underinsured as a result and not have adequate cover in place to meet your financial commitments in the event of a claim.

[Limited Information] You have not disclosed your full financial position for us to determine an appropriate level of cover. We have made some assumptions on what you need which may result in you being underinsured.

You need to complete your application for insurance honestly and with full disclosure. Failure to do so may give the insurer cause to void your policy and not pay claims in the future.

We have estimated the impact of certain health events on your financial position. The actual impact may be more than we have calculated and therefore you may be underinsured. Significant changes to your circumstances may also impact the appropriateness of the level of cover recommended. Please contact our office to arrange a review in the event of any significant changes to your lifestyle and/or needs.

[Level] Level premiums may increase over time; they are not fixed rates.

[Stepped] Stepped premiums will increase each year in line with your age.

New life insurance policies generally have a 13-month suicide exclusion.

[Cash flow] The recommended insurance premiums will reduce your personal cash flow available for other expenditure.

[Super] We have recommended you pay $XXX p.a. through your XXX Superannuation Fund. This will reduce your retirement savings. We estimate that your balance will be $XXX lower at age 65 than if you do not pay insurance via your super account. Please refer to our financial projections at the end of the SoA for further explanation.

[Super] Holding life and TPD insurance within superannuation may result in tax being paid on benefits. This will result in the net payment amount being less than the calculated need. We recommend that you seek specialist tax advice to confirm the possible outcomes. [Gross up] We have grossed up your TPD benefit to allow for the tax payable on claim of TPD.

32

44. Apply for Life Insurance We recommend that you apply for Life insurance as follows: 

$XXX Life insurance on a stepped / level premium payable monthly/annually.

The premiums for this risk protection insurance will be sourced from cash flow / from your XXX cash account / from your XXX Super Fund.

Benefits:     

You will have funds available in the event of death to pay down your debts of $XX / provide ongoing income of $YY to ZZZZ / pay your children’s education fees / provide funds for your funeral costs / Other.

[Super] Structuring your insurance partly through superannuation will reduce the impact on your personal cash flow.

[Super] Paying your insurance via annual rollover will give you a 15% discount on your premiums.

[Monthly] Paying premiums monthly will help you to smooth the impact on your cash flow.

Your family will have financial support in place in the event of your death.

Points to Consider: 

 

  

    



We have recommended new insurance that will be underwritten by the insurer to assess your application. They may offer revised terms including higher premiums or health exclusions, depending on the outcome of their assessment.

Do not cancel any existing insurance cover prior to the recommended insurance being accepted and put into force.

[Specified levels of cover] You have specified the level of cover for your Life insurance and as such, we cannot confirm if this level of cover is appropriate for your needs. You may be underinsured as a result and not have adequate cover in place to meet your financial commitments in the event of a claim.

[Limited Information] You have not disclosed your full financial position for us to determine an appropriate level of cover. We have made some assumptions on what you need which may result in you being underinsured.

You need to complete your application for insurance honestly and with full disclosure. Failure to do so may give the insurer cause to void your policy and not pay claims in the future.

We have estimated the impact of certain health events on your financial position. The actual impact may be more than we have calculated and therefore you may be underinsured. Significant changes to your circumstances may also impact the appropriateness of the level of cover recommended. Please contact our office to arrange a review in the event of any significant changes to your lifestyle and/or needs.

[Level] Level premiums may increase over time; they are not fixed rates.

[Stepped] Stepped premiums will increase each year in line with your age.

New life insurance policies generally have a 13-month suicide exclusion.

[Cash flow] The recommended insurance premiums will reduce your personal cash flow available for other expenditure.

[Super] We have recommended you pay $XXX p.a. through your XXX Superannuation Fund. This will reduce your retirement savings. We estimate that your balance will be $XXX lower at age 65 than if you do not pay insurance via your super account. Please refer to our financial projections at the end of the SoA for further explanation.

[Super] Holding life insurance within superannuation may result in tax being paid on benefits. This will result in the net payment amount being less than the calculated need. We recommend that you seek specialist tax advice to confirm the possible outcomes.

33

45. Apply for Total and Permanent Disablement (TPD) Insurance We recommend that you apply for total and permanent disablement (TPD) insurance as follows: 

$XXX Total and Permanent Disablement (TPD) ‘any’/’own’ occupation insurance on a stepped / level premium payable monthly / annually.

The premiums for this TPD insurance will be sourced from cash flow / from your XXX cash account / from your XXX Super Fund.

Benefits:     

You will have funds available in the event of TPD to pay down your debts of $XX / provide ongoing income of $YY / pay medical costs / pay your children’s education fees / make home modifications / Other.

[Super] Structuring your insurance partly through superannuation will reduce the impact on your personal cash flow.

[Super] Paying your insurance via annual rollover will give you a 15% discount on your premiums.

[Monthly] Paying premiums monthly will help you to smooth the impact on your cash flow.

Your family will have financial support in place should anything happen to you and your ability to earn income.

Points to Consider: 

 

  

   



We have recommended new insurance that will be underwritten by the insurer to assess your application. They may offer revised terms including higher premiums or health exclusions, depending on the outcome of their assessment.

Do not cancel any existing insurance cover prior to the recommended insurance being accepted and put into force.

[Specified levels of cover] You have specified the level of cover for your TPD insurance and as such, we cannot confirm if this level of cover is appropriate for your needs. You may be underinsured as a result and not have adequate cover in place to meet your financial commitments in the event of a claim.

[Limited Information] You have not disclosed your full financial position for us to determine an appropriate level of cover. We have made some assumptions on what you need which may result in you being underinsured.

You need to complete your application for insurance honestly and with full disclosure. Failure to do so may give the insurer cause to void your policy and not pay claims in the future.

We have estimated the impact of certain health events on your financial position. The actual impact may be more than we have calculated and therefore you may be underinsured. Significant changes to your circumstances may also impact the appropriateness of the level of cover recommended. Please contact our office to arrange a review in the event of any significant changes to your lifestyle and/or needs.

[Level] Level premiums may increase over time; they are not fixed rates.

[Stepped] Stepped premiums will increase each year in line with your age.

[Cash flow] The recommended insurance premiums will reduce your personal cash flow available for other expenditure.

[Super] We have recommended you pay $XXX p.a. through your XXX Superannuation Fund. This will reduce your retirement savings. We estimate that your balance will be $XXX lower at age 65 than if you do not pay insurance via your super account. Please refer to our financial projections at the end of the SoA for further explanation.

[Super] Holding TPD insurance within superannuation may result in tax being paid on benefits. This will result in the net amount being less than the calculated need. We recommend that you seek specialist tax advice to confirm the possible outcomes. [Gross up] We have grossed up your TPD benefit to allow for the tax payable on claim of TPD.

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46. Apply for Trauma Insurance We recommend that you apply for trauma insurance as follows:  

$XXX Trauma insurance on a stepped / level premium payable monthly / annually [Child Cover] Child cover of $XXX for your child/ren, for a total of $XXX.

The premiums for this insurance will be sourced from cash flow / from your XXX cash account.

Benefits:   

You will have funds available in the event of a defined medical event, to pay down your debts of $XX / provide ongoing income of $YY / pay medical bills.

[Monthly] Paying premiums monthly will help you to smooth the impact on your cash flow.

Your family will have financial support in place should anything happen to you and your ability to earn income.

Points to Consider: 

 

  

   

We have recommended new insurance that will be underwritten by the insurer to assess your application. They may offer revised terms including higher premiums or health exclusions, depending on the outcome of their assessment.

Do not cancel any existing insurance cover prior to the recommended insurance being accepted and put into force.

[Specified levels of cover] You have specified the level of cover for your trauma insurance and as such, we cannot confirm if this level of cover is appropriate for your needs. You may be underinsured as a result and not have adequate cover in place to meet your financial commitments in the event of a claim.

[Limited Information] You have not disclosed your full financial position for us to determine an appropriate level of cover. We have made some assumptions on what you need which may result in you being underinsured.

You need to complete your application for insurance honestly and with full disclosure. Failure to do so may give the insurer cause to void your policy and not pay claims in the future.

We have estimated the impact of certain health events on your financial position. The actual impact may be more than we have calculated and therefore you may be underinsured. Significant changes to your circumstances may also impact the appropriateness of the level of cover recommended. Please contact our office to arrange a review in the event of any significant changes to your lifestyle and/or needs.

[Level] Level premiums may increase over time; they are not fixed rates.

[Stepped] Stepped premiums will increase each year in line with your age.

New trauma insurance policies generally have a 90-day waiting period on major medical events.

[Cash flow] The recommended insurance premiums will reduce your personal cash flow available for other expenditure.

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47. Apply for Income Protection Insurance We recommend that you apply for Income Protection insurance as follows:  

$XXX per month Income Protection insurance on a stepped / level premium payable monthly / annually. <Waiting Period> waiting period and a benefit period to <Benefit Period>.

Income Protection provides a benefit if you suffer a loss of income due to a Sickness or Injury. A monthly payment for a nominated period of time can help you keep your household up and running, and provide for your loved ones while you recover.

An income protection policy can pay up to 70% of your pre-tax income for a set time period if you’re unable to work due to a partial or total disability (depending on your policy). This could allow you to stay on top of your bills and expenses as you recover*.

The premiums for this risk protection insurance will be sourced from cash flow / from your XXX cash account / from your XXX Super Fund.

Benefits:      

In the event of illness or injury, you will have ongoing income to help meet your financial commitments and medical costs.

[Super] Structuring your insurance through superannuation will reduce the impact on your personal cash flow.

[Super] Paying your insurance via annual rollover will give you a 15% discount on your premiums.

[Monthly] Paying premiums monthly will help you to smooth the impact on your cash flow.

Your family will have financial support in place should anything happen to you and your ability to earn income.

[Tax deductible] Paying your income protection premiums from cash flow will allow you to claim a tax deduction in your tax return each year.

Points to Consider: 

     

  

    

We have recommended new insurance that will be underwritten by the insurer to assess your application. They may offer revised terms including higher premiums or health exclusions, depending on the outcome of their assessment.

Do not cancel any existing insurance cover prior to the recommended insurance being accepted and put into force.

[Super] Features and benefits maybe limited inside super due to the legislative restrictions on how you can use money from super.

[Specified levels of cover] You have specified the level of cover for your income protection insurance which is less than the maximum cover on offer. You may not have enough income to meet your living and medical expenses.

[Limited Information] You have not disclosed your full financial position for us to determine an appropriate level of cover. We have made some assumptions on what you need which may result in you being underinsured.

You need to complete your application for insurance honestly and with full disclosure. Failure to do so may give the insurer cause to void your policy and not pay claims in the future.

We have estimated the impact of certain health events on your financial position. The actual impact may be more than we have calculated and therefore you may be underinsured. Significant changes to your circumstances may also impact the appropriateness of the level of cover recommended. Please contact our office to arrange a review in the event of any significant changes to your lifestyle and/or needs.

[IP] The amount you are paid at claim will depend on your income in the months leading up to your claim. This may mean you get paid less than the benefit amount you are insured for.

[IP] The benefit amount paid at claim can be offset by other payments such as leave entitlements and workers compensation etc.

[IP Change in definition] The definition of occupation you have to meet when on claim will change after XX years on claim. This will change from you being fit to do any occupation versus your own occupation, making it harder to meet the requirement when it changes.

[IP benefit payment to reduce when on claim] The amount you are paid on claim will reduce after XX years from XX% to XX% ($XX per month to $XX per month).

[Level] Level premiums may increase over time; they are not fixed rates.

[Stepped] Stepped premiums will increase each year in line with your age.

[Cash flow] The recommended insurance premiums will reduce your personal cash flow available for other expenditure.

[Super] We have recommended you pay $XXX p.a. through your XXX Superannuation Fund. This will reduce your retirement savings. We estimate that your balance will be $XXX lower at age 65 than if you do not pay insurance via your super account. Please refer to our financial projections at the end of the SoA for further explanation.

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48. Apply for Accidental Life Insurance We recommend that you apply for Accidental Life insurance as follows: 

$XXX Accidental Life insurance on a stepped / level premium payable monthly / annually.

The premiums for this risk protection insurance will be sourced from cash flow / from your XXX cash account / from your XXX Super Fund.

Benefits:     

Funds will be available in the event of accidental death to pay down your debts of $XX / provide ongoing income of $YY to ZZZZ / pay your children’s education fees / provide funds for your funeral costs / Other.

[Super] Structuring your insurance partly through superannuation will reduce the impact on your personal cash flow.

[Super] Paying your insurance via annual rollover will give you a 15% discount on your premiums.

[Monthly] Paying premiums monthly will help you to smooth the impact on your cash flow.

Your family will have financial support in place in the event of your accidental death.

Points to Consider:  

 

  

   



The accidental death policy will only pay at claim in the event of death caused by an accident not illness.

We have recommended new insurance that will be underwritten by the insurer to assess your application. They may offer revised terms including higher premiums or health exclusions, depending on the outcome of their assessment. Accidental death cover has a short underwriting process as they are not assessing you for illness related death.

Do not cancel any existing insurance cover prior to the recommended insurance being accepted and put into force.

[Specified levels of cover] You have specified the level of cover for your Life insurance and as such, we cannot confirm if this level of cover is appropriate for your needs. You may be underinsured as a result and not have adequate cover in place to meet your financial commitments in the event of a claim.

[Limited Information] You have not disclosed your full financial position for us to determine an appropriate level of cover. We have made some assumptions on what you need which may result in you being underinsured.

You need to complete your application for insurance honestly and with full disclosure. Failure to do so may give the insurer cause to void your policy and not pay claims in the future.

We have estimated the impact of certain health events on your financial position. The actual impact may be more than we have calculated and therefore you may be underinsured. Significant changes to your circumstances may also impact the appropriateness of the level of cover recommended. Please contact our office to arrange a review in the event of any significant changes to your lifestyle and/or needs.

[Level] Level premiums may increase over time; they are not fixed rates.

[Stepped] Stepped premiums will increase each year in line with your age.

[Cash flow] The recommended insurance premiums will reduce your personal cash flow available for other expenditure.

[Super] We have recommended you pay $XXX p.a. through your XXX Superannuation Fund. This will reduce your retirement savings. We estimate that your balance will be $XXX lower at age 65 than if you do not pay insurance via your super account. Please refer to our financial projections at the end of the SoA for further explanation.

[Super] Holding accidental life insurance within superannuation may result in tax being paid on benefits. This will result in the net amount being less than the calculated need. We recommend that you seek specialist tax advice to confirm the possible outcomes.

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49. Apply for Business Expense Insurance We recommend that you apply to protect your business expenses in the event you are unable to work due to illness or injury. We recommend cover to be provided as follows:    

$XXX per month with a waiting period of 12 months.

Yourself / Your business as the owner of policy.

Premium on a stepped / level basis.

The policy will be an indemnity value contract.

Benefits:   

Business expense insurance will cover 100% of the fixed expenses as nominated by you. This is significantly more than a personal income protection policy.

This cover will help you continue your business in the event you are unable to work due to illness or injury. This will give you up to 12 months to recover or find an alternative solution for your business.

[Business owned policy] Holding your cover through your business will make insurance premiums tax deductible to the business.

Points to Consider:    

 



 

  

The benefit amount for this cover is based on your / our estimate of regular, fixed expenses. If this estimate is incorrect, you may be underinsured.

Payment at claim is normally limited for business expenses to 12 months, as opposed to an income protection policy where you can receive ongoing benefits up to age 70.

[Business owned policy] Benefits paid may be subject to tax and only the net amount will be available for paying your business expenses.

We have recommended new insurance that will be underwritten by the insurer to assess your application. They may offer revised terms including higher premiums or health exclusions, depending on the outcome of their assessment.

Do not cancel any existing insurance cover prior to the recommended insurance being accepted and put into force.

[Specified levels of cover] You have specified the level of cover for your business expense insurance and as such, we cannot confirm if this level of cover is appropriate for your needs. You may be underinsured as a result, and not have adequate cover in place to meet your financial commitments in the event of a claim.

[Limited Information] You have not disclosed the full financial position of the business for us to determine an appropriate level of cover. We have made some assumptions on what you need which may result in you being underinsured.

You need to complete your application for insurance honestly and with full disclosure. Failure to do so may give the insurer cause to void your policy and not pay claims in the future.

Significant changes to your circumstances may impact the appropriateness of the level of cover recommended.

Please contact our office to arrange a review in the event of any significant changes to your lifestyle and/or needs.

[Level] Level premiums may increase over time; they are not fixed rates.

[Stepped] Stepped premiums will increase each year in line with your age.

[Personal Cash flow] The recommended insurance premiums will reduce your personal cash flow available for other expenditure.

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50. Apply for Business Protection Insurance (Key Person) - Debt We recommend that you apply for Key Person Business Protection insurance. This will provide cover to pay out business debt in the event of death / disablement / serious medical illness as follows:   

$XXX Key Person Life insurance on a stepped / level premium payable monthly / annually. $XXX Key Person Total and Permanent Disablement (TPD) ‘any’ / ’own’ occupation insurance on a stepped / level premium payable monthly / annually. $XXX Key Person Trauma insurance on a stepped / level premium payable monthly / annually.

The premiums for this business protection insurance will be sourced from cash flow / from your XXX cash account / from your XXX Super Fund [via annual rollover] / from your business.

Benefits:     

As you / <Key person> are / is a key contributor to the generation of business income, this cover will help to reduce financial stress on your business partner / associates by paying down your current debt of $XXX. Paying down debt in the event of death / disablement / serious medical illness of <Key Person> / you as a key person, may allow the business to continue until an appropriate replacement can be found.

[Business Ownership] Holding the insurance via your business will ensure funds pass directly to the business for repayment of debt.

[Business Ownership] Holding the insurance via your business allows premiums to be paid from business cash flow.

[Super Ownership] Holding cover via super will reduce the impact on your business cash flow.

Points to Consider:   



  

 



      

The level of cover has been determined based on the current debts of the business. Should these change, your level of cover will need to be reviewed to avoid under or over-insurance.

As the cover is to pay down debt, which is considered capital in nature, your business will not be able to claim a tax deduction for premiums paid.

[Personal Ownership] Holding Key Person insurance personally means that benefits will be paid to the owner rather than the business. You will need to have a legal agreement in place to ensure that this benefit is transferred to the business to pay down debt.

[Super Ownership] Holding Key Person insurance via super means that benefits will be paid to the Fund member or beneficiaries rather than the business. You will need to have a legal agreement in place to ensure that this benefit is transferred to the business to pay down debt.

[Super Ownership] Holding key person cover via super may mean that benefits are subject to tax, dependent on the type of cover and beneficiaries. [Gross up] Sums insured have been grossed up to allow for this tax payment.

[Business Ownership] Trauma and TPD insurance may be subject to capital gains tax if owned by your business.

This should be taken into consideration when determining the level of cover.

We have recommended new insurance that will be underwritten by the insurer to assess your application. They may offer revised terms including higher premiums or health exclusions, depending on the outcome of their assessment.

Do not cancel any existing insurance cover prior to the recommended insurance being accepted and put into force.

[Specified levels of cover] You have specified the level of cover for your Life / TPD / Trauma insurance and as such, we cannot confirm if this level of cover is appropriate for your business needs. It may be underinsured as a result and not have adequate cover in place to meet its debt commitments in the event of a claim.

[Limited Information] You have not disclosed the full business financial position for us to determine an appropriate level of cover. We have made some assumptions on what is needed which may result in you being underinsured.

You need to complete your application for insurance honestly and with full disclosure. Failure to do so may give the insurer cause to void your policy and not pay claims in the future.

[Level] Level premiums may increase over time; they are not fixed rates.

[Stepped] Stepped premiums will increase each year in line with your age.

[Life] New life insurance policies generally have a 13-month suicide exclusion.

[Trauma] New trauma insurance policies generally have a 90-day waiting period on major medical events.

[Cash flow] The recommended insurance premiums will reduce your cash flow available for other expenditure.

[Super] We have recommended you pay $XXX p.a. through your XXX Superannuation Fund. This will reduce your retirement savings. We estimate that your balance will be $XXX lower at age 65 than if you do not pay insurance via your super account. Please refer to our financial projections at the end of the SoA for further details.

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51. Apply for Business Protection Insurance (Key Person) - Revenue We recommend that you apply for Key Person Business Protection insurance. This will provide cover for lost business revenue in the event of death / disablement / serious medical illness as follows:   

$XXX Key Person Life insurance on a stepped / level premium payable monthly / annually. $XXX Key Person Total and Permanent Disablement (TPD) ‘any’/’own’ occupation insurance on a stepped / level premium payable monthly / annually. $XXX Key Person Trauma insurance on a stepped / level premium payable monthly / annually.

The premiums for this business protection insurance will be sourced from cash flow / from your XXX cash account / from your XXX Super Fund [via annual rollover] / from your business.

Benefits:     

As you / <Key person> are / is a key contributor to the generation of business income, this cover will help to cover the reduction in revenue until you / they return to work or an appropriate replacement is found.

Covering lost revenue in the event of death / disablement / serious medical illness of <Key person> / you as a key person, may allow the business to continue rather than being forced to liquidate.

[Business Ownership] Holding the insurance via your business will ensure funds pass directly to the business to cover revenue. Premiums will be tax deductible to the business.

[Business Ownership] Holding the insurance via your business allows premiums to be paid from business cash flow.

[Super Ownership] Holding cover via super will reduce the impact on your business cash flow.

Points to Consider:  



  

 



      

The level of cover has been determined based on the current revenue of the business. Should this change, your level of cover will need to be reviewed to avoid under or over-insurance.

As the cover is to replace revenue, premiums paid by the business are tax-deductible to the business and any benefit paid will also be taxable. The level of cover has been grossed up to allow for such tax payments at time of claim.

[Personal / Super Ownership] Holding Key Person insurance personally / via super means that benefits will be paid to the owner rather than the business. You will need to have a legal agreement in place to ensure that this benefit is transferred to the business for the intended purpose.

[Super Ownership] Holding key person cover via super may mean that benefits are subject to tax, dependent on the type of cover and beneficiaries. [Gross up] Sums insured have been grossed up to allow for this tax payment.

[Business Ownership] Trauma and TPD insurance may be subject to capital gains tax if owned by your business.

This should be taken into consideration when determining the level of cover.

We have recommended new insurance that will be underwritten by the insurer to assess your application. They may offer revised terms including higher premiums or health exclusions, depending on the outcome of their assessment.

Do not cancel any existing insurance cover prior to the recommended insurance being accepted and put into force.

[Specified levels of cover] You have specified the level of cover for your Life / TPD / Trauma insurance and as such, we cannot confirm if this level of cover is appropriate for your business needs. It may be underinsured as a result and not have adequate cover in place to meet its financial commitments in the event of a claim.

[Limited Information] You have not disclosed the full business financial position for us to determine an appropriate level of cover. We have made some assumptions on what you need which may result in you being underinsured.

You need to complete your application for insurance honestly and with full disclosure. Failure to do so may give the insurer cause to void your policy and not pay claims in the future.

[Level] Level premiums may increase over time; they are not fixed rates.

[Stepped] Stepped premiums will increase each year in line with your age.

[Life] New life insurance policies generally have a 13-month suicide exclusion.

[Trauma] New trauma insurance policies generally have a 90-day waiting period on major medical events.

[Cash flow] The recommended insurance premiums will reduce your cash flow available for other expenditure.

[Super] We have recommended you pay $XXX p.a. through your XXX Superannuation Fund. This will reduce your retirement savings. We estimate that your balance will be $XXX lower at age 65 than if you do not pay insurance via your super account. Please refer to our financial projections at the end of the SoA for further details.

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52. Apply for Child cover We recommend that you apply for child cover as an optional extra to your Life / TPD / Trauma Policy. This will cover <Name of children> for $XXX each, in the event of a serious medical illness as outlined in the Product Disclosure Statement. This will be linked to your Life / TPD / Trauma Policy. We recommend that these premiums be paid monthly / bi-annually / annually from your personal cash flow. Premiums will be stepped and increase each year.

Benefits: 



You will receive a lump sum to assist in the payment of medical costs in the event of your child/ren suffering one of the pre-defined medical illnesses. As the cost of serious illness can be significant, this will help to reduce financial stress at a difficult time for your family.

[Life/Terminal illness cover] You will receive a payment to assist with final medical and other costs in the event of the death of one of your children.

Points to Consider:   

Most providers will only allow application for child cover between the ages of 2 and 18 years of age with cover continuing up to age 21.

Only those medical events defined by the insurer will be covered.

The level of cover is more restrictive than standard lump sum insurance. There may be a restriction on the number of children that can be covered.

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53. Review your SMSF Insurance Strategy We recommend that you review your SMSF Insurance strategy as outlined in your Trust Deed and accompanying notes. In the event that changes are required, we recommend you seek professional advice to have the amendments to the insurance strategy made.

Benefits:    

Your Fund members will have insurance in place to assist them and their beneficiaries in the event of death, illness or injury.

You will meet your responsibility as Trustee/s of your own Fund to ensure that each of the members of the Fund have insurance in place that is reviewed regularly.

Members insurance needs will be considered.

[Insurance recommendations] Recommendations for insurance made in this SoA are in line with the SMSF Insurance Strategy.

Points to Consider:  

 

Non-compliance with your Trustee duties may result in the loss of concessional tax status for the SMSF. Superannuation is concessionally taxed at 15% (10% for capital gains tax).

Any significant changes to member circumstances or changes to the SMSF Trust Deed may impact the appropriateness of insurance held. You will need to revisit the insurance policies and the insurance strategy of the Fund in these events to ensure continued compliance with your Trustee responsibilities.

Should you require amendments to the Insurance strategy / Trust Deed, there will be costs involved.

You are required to record this review and any insurance changes in your Trustee minutes for the Fund.

54. Invest in a Portfolio of Direct Shares We recommend that you invest in a portfolio of direct shares as part of your wealth creation strategy. We recommend that you use funds from your cash / investment account to fund the purchase of this portfolio. Details of share purchases are provided in the next section of this SoA. Benefits:    

Investing in direct shares will provide diversity to your overall investment portfolio.

Australian share dividend income is tax-effective where franking credits are provided.

You have the option to reinvest your dividend income back into your shares, reducing transactions costs as well as investing for further capital growth.

Holding shares directly provides flexibility as you can sell a selection of individual shares as needed. It also provides flexibility to manage capital gains tax when selling your portfolio.

Points to Consider:       

Investing directly into shares increases your exposure to market volatility.

Capital growth and dividend payments are not guaranteed.

Negative returns are likely where the value of your portfolio falls to less than what you start with.

It is best to have a long-term outlook for the ownership of direct shares; this may help to smooth out the impact of market volatility on your share portfolio performance.

Brokerage of $XX will be payable for the purchase of your share portfolio. Any further buys and sells within your portfolio will be subject to brokerage also at a rate of $XX / XX% per trade.

Diversification across companies and markets is harder to achieve when building a portfolio of direct shares.

Managed funds provide more diversification at a lower level of investment.

Capital gains tax may be payable on the sale of shares. Please seek professional tax advice before selling any shares.

55. Commence a Regular Investment Plan

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We recommend that you commence a regular savings plan of $XXX per month into your / the recommended XXX investment. We recommend that you make an initial investment of $2,000 to open the account. The money for this strategy will be sourced from your <Source of Funds>.

Benefits: 

  

Regular savings plans have the advantage of ‘dollar cost averaging’. This allows you to buy into an investment at the prevailing prices each month. When prices are low, you buy more units and when prices are high, you buy less. This is most effective in a volatile market and provides smoothing of the entry price into the investment.

We estimate that with earnings, you will have $XXX extra in your investment after 12 months of regular investing.

You only need an initial investment of $2,000 to commence this regular investment plan. This is much less than if you made a lump sum investment.

The risk of investing a lump sum at a high price is reduced by the averaging of entry prices from regular investment.

Points to Consider:        

[Source cash flow] Your cash flow will reduce by $XXX per week / month / annum.

You will have to report (in your tax return) any income that the investments generate.

If you decide to sell your investment portfolio, you may have to pay Capital Gains Tax (CGT).

Dollar cost averaging does not eliminate all market and investment risk. Your portfolio returns will still be subject to market volatility and investment performance.

Starting with a lower investment means that it will take longer to build an investment portfolio where further diversification can reduce some market / sector risk.

The recommended investment has a higher allocation to growth investments than your current cash / savings / investment account. This will increase the volatility of your investment.

You may miss opportunities to make a lump sum investment at a low price.

Regular review of this strategy will help you stay on track to achieve your goal of <goal>.

56. Invest in an Investment / Education Bond We recommend that you invest $XXX from your <Source of Funds> into an Investment / Education Bond. We recommend that you make regular investments of $XXX per month for the term of the Bond (10 years). The underlying funds will be invested in line with your XXXX Risk Profile.

Unlike traditional investment products, such as managed funds, bonds are a 'tax paid' investment. This means that tax on investment earnings is paid at the applicable company rate of 30 per cent by the bond issuer, not by the investor.

Benefits:

     

o Investors receive ‘tax paid’ returns provided they meet certain conditions: Hold the Bond for 10 years o Do not make withdrawals o Meet the 125% contribution rule.

Bonds paid to beneficiaries directly will be tax free.

Bonds are more tax effective when your marginal tax rate is above 30%.

[Education] You will have funds set aside for the purpose of paying your children’s education costs.

There are a wide range of investment options that will align with your Risk Profile.

Bonds are not normally subject to capital gains tax.

Bonds can be used to top up savings where super thresholds / caps have been reached.

Points to Consider:   

To receive the tax benefits, you need to hold the investment for 10 years, not make withdrawals and not contribute more than 125% of the previous year contributions in any one year.

There will be fees payable for the establishment and ongoing management of the Bond.

In the event that you have to redeem some or all of the Investment Bond prior to the completion of the ten-year period, the following tax will be payable: o Within 8 years: all earnings are taxed at your marginal tax rate less a 30% tax offset. o During the 9th year: 2/3rds of the earnings are taxed at your marginal tax rate less a 30% tax offset. o During the 10th year: 1/3rd of the earnings is taxed at your marginal tax rate less a 30% tax offset o Longer than 10 years: all withdrawals are tax free.

43

[Education] Education bonds have the added benefit of a tax refund paid to the education bond provider if the bond earnings are withdrawn and used for the bond holder’s education purposes. This refund is generally passed on to the bond holder and is broadly $30 for every $70 of bond earnings withdrawn for education expenses.

Eligible education expenses are broad and may include: o Pre-school and primary school costs o Secondary and tertiary education costs, including HELP fees; and o Costs such as uniforms, private tuition, books, materials, student fees, residential boarding costs, rent and other accommodation expenses.

57. Commence an Investment Portfolio via a Platform / Wrap Account We recommend that you invest into a diversified portfolio of investments via a platform / wrap account in line with your Investment Risk Profile. This investment of $XXX will be sourced from your <Source of Funds> and invested in XXX name / your name. Further details on the selection of underlying investments are provided later in this SoA. [Reinvest] We recommend that you reinvest income distributions and dividends back into the portfolio to maximise funds available for wealth creation. [Cash] We recommend that distributions and dividends be paid to your cash account within the platform / wrap, to make funds available for your cash flow needs.

Benefits:         



[Managed Funds] Professional Investment Fund Managers will assist in managing your investments.

Platform / Wrap accounts provide consolidated reporting and allow you to view and track your investments in one place.

The recommended investment portfolio will be diversified across asset classes and market sectors according to your risk profile.

A blend of income and growth investments has been selected for your Risk Profile.

You can sell down your portfolio at any time.

Nominating <Platform / Wrap Owner> as the owner of the investment portfolio will mean that income and capital gains are assessed at your / their marginal tax rate.

[Reinvest] Income can be reinvested in your investments to increase funds invested and grow your wealth.

[Cash distributions] Income from the investment portfolio can be paid to the platform / wrap cash account and accessed any time.

[Auto Rebalance] The recommended Platform / Wrap account allows for automatic allocation within your investment portfolio to keep it in line with your Investment Risk Profile. This reduces the time lag meaning you will be invested quicker in the right investments.

Platform / Wrap accounts give you access to lower wholesale investment fees not normally available to retail clients, reducing the ongoing management costs of your portfolio.

Points to Consider:       



Income on the investment portfolio will be assessable for tax purposes.

Capital gains on the investment portfolio will be subject to tax on the sale of the underlying investment. Please seek tax advice prior to selling any portion of your portfolio.

There will be administration costs to manage the account.

[Managed Funds] Professional Fund Managers charge investment fees to manage your investments.

[Transaction costs] You will incur an exit fee / brokerage costs / break fees of $X to transfer from your existing cash / bank / term deposit / investment account.

[Share portfolio] Brokerage of $XX will be payable for the purchase of your share portfolio. Any further buys and sells within your portfolio will be subject to brokerage also at a rate of $XX / XX% per trade.

[Growth portfolio] The investment portfolio will have a high exposure to growth investments and be subject to greater market volatility. This means that your portfolio may rise and fall depending on prevailing market conditions.

The returns on the portfolio are not guaranteed. You may experience negative returns from time to time.

Investing for the long term will assist in smoothing out volatility and negative returns.

58. Commence an Investment Portfolio via a Master Trust We recommend that you invest into a diversified portfolio of investments via a Master Trust account in line with your Investment Risk Profile. This investment of $XXX will be sourced from your <Source of funds> and invested in XXX name / your name. Further details on the selection of underlying investments is provided later in this SoA. [Reinvest] We recommend that you reinvest income distributions back into the portfolio to maximise funds available for wealth creation.

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[Cash] We recommend that distributions be paid to your cash account within the Master Trust, to make funds available for your cash flow needs.

Benefits:        

Professional Investment Fund Managers will assist in managing your investments.

Master Trust accounts provide consolidated reporting and allow you to view and track your investments in one place.

The recommended investment portfolio will be diversified across asset classes and market sectors according to your risk profile.

A blend of income and growth investments has been selected for your Risk Profile.

You can sell down your portfolio at any time.

Nominating <Owner> / yourself as the owner of the investment portfolio will mean that income and capital gains are assessed at your / their marginal tax rate.

[Reinvest] Income can be reinvested in your investments to increase funds invested and grow your wealth.

[Cash distributions] Income from the investment portfolio can be paid to the Master Trust cash account and accessed any time.

Points to Consider:      

Income and capital gains are pooled for all investors and then distributed according to the number of units held.

This means that you / XXX may be impacted by the investment transactions of other investors.

There will be administration costs to manage the account.

Professional Fund Managers charge investment fees to manage your investments.

[Transaction costs] You will incur an exit fee / brokerage costs / break fees of $X to transfer from your existing cash / bank / term deposit / investment account.

The investment portfolio will have a high exposure to growth investments and be subject to greater market volatility. This means that your portfolio may rise and fall depending on prevailing market conditions.

The returns on the portfolio are not guaranteed. You may experience negative returns from time to time.

Investing for the long term will assist in smoothing out volatility and negative returns.

59. Invest in a Diversified Portfolio of Managed Investments We recommend that you invest into a diversified portfolio of managed investments in line with your Investment Risk Profile. This investment portfolio of $XXX will be sourced from your <Source of funds> and invested in XXX name / your name. Further details on the selection of underlying managed investments is provided later in this SoA. [Reinvest] We recommend that you reinvest income distributions back into the portfolio to maximise funds available for wealth creation.

[Cash] We recommend that distributions be paid to your nominated cash account, to make funds available for your cash flow needs.

Benefits:       

Professional Investment Fund Managers will manage your investments.

The recommended investment portfolio will be diversified across asset classes and market sectors according to your Investment Risk Profile.

A blend of income and growth investments have been selected for your Risk Profile.

You can sell down your portfolio at any time.

Nominating <Owner> / yourself as the owner of the investment portfolio will mean that income and capital gains are assessed at your / their marginal tax rate.

[Reinvest] Income can be reinvested in your investments to increase funds invested and grow your wealth.

[Cash distributions] Income from the investment portfolio can be paid to your nominated cash account and accessed any time.

Points to Consider:    

Income on the investment portfolio will be assessable and subject to tax.

Capital gains on the investment portfolio will be subject to tax on sale of the underlying investment. Please seek tax advice prior to selling any portion of your portfolio.

Professional Fund Managers charge investment fees to manage your investments.

[Transaction costs] You will incur an exit fee / brokerage costs / break fees of $X to transfer from your existing cash / bank / term deposit / investment account.

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



[Growth portfolio] The investment portfolio will have a higher exposure to growth investments and be subject to greater market volatility. This means that your portfolio may rise and fall depending on prevailing market conditions.

The returns on the portfolio are not guaranteed. You may experience negative returns from time to time.

Investing for the long term will assist in smoothing out volatility and negative returns.

60. Invest through a Regular Savings Plan We recommend that you commence a regular savings plan of $XXX per month into your / the recommended XXX investment. We recommend that you make an initial investment of $2,000 to open the account. The money for this strategy will be sourced from <Source of funds>.

Benefits:     



You can start your wealth creation strategy without a lump sum to invest.

We estimate that with earnings, you will have $XXX extra in your investment / account after 12 months of regular investing.

[Minimum initial investment] You only need an initial investment of $XXX to commence this regular savings plan.

This is much less than if you made a lump sum investment.

[No initial investment] You do not need an initial investment to commence this regular savings plan.

[Dollar cost averaging] Regular savings plans have the advantage of ‘dollar cost averaging’. This allows you to buy into an investment at the prevailing prices each month. This is most effective in a volatile market and provides smoothing of the entry price into the investment.

[Dollar cost averaging] The risk of investing a lump sum at a high price is reduced by the averaging of entry prices from regular investment.

Points to Consider:    

[Dollar cost averaging] Dollar cost averaging does not eliminate all market and investment risk. Your portfolio returns will still be subject to market volatility and investment performance.

Starting with a lower investment means that it will take longer to build an investment portfolio where further diversification can reduce some market or sector risk.

[Increase in Growth Exposure] The recommended investment has a higher allocation to growth investments than your current cash / savings / investment account. This will increase the volatility of your investment.

[Increase in Cash / Fixed Interest Exposure] The recommended investment is to a cash / fixed interest / term deposit investment. Whilst there is guaranteed income, you will not have exposure to capital growth as you would with shares or property and therefore the returns may be less.

61. Switch investments in your Portfolio We recommend that you sell down your holding of <Name of Funds / shares> and purchase <Name of Funds / Shares>.

[Cash shortfall] The difference in the buy and sell amounts will be sourced from / directed to your XXXX cash account.

These changes to your portfolio take into consideration market research on the expected performance of these funds as well as the alignment to your Investment Risk Profile.

Benefits:   

Your portfolio will be aligned to your Investment Risk Profile.

The recommended Funds / stocks are considered appropriate investments as outlined in our market research.

Making changes at each review allows you to take advantage of new market opportunities which may improve your returns and increase your wealth.

Points to Consider:     

<Insert reason for sell down of funds / stocks> <Insert reason for purchase of funds / stocks> There will be transactions costs in selling down and purchasing investments.

If you do not implement the recommended changes, you run the risk of having your portfolio not aligned to your risk profile / having underperforming investments that may impact your wealth creation.

[Capital Gains] Selling down these investments will trigger capital gains. We recommend that you seek tax advice for exact calculations; we estimate the capital gains tax to be $XXX.

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

Whilst extensive research has been conducted, there is no guarantee that the new investments will outperform the old ones. [Ongoing Service] We will review the allocation at your agreed ongoing review to adjust investments as required.

62. Rebalance your Investment Portfolio We recommend that you rebalance your XXXX Investment portfolio in line with your Investment Risk Profile. We recommend that you sell down your holding of <Name of Funds / shares> and purchase <Name of Funds / Shares>. [Cash shortfall] The difference in the buy and sell amounts will be sourced from / directed to your XXX cash account. These changes to your portfolio take into consideration market research on the expected performance of these funds as well as the alignment to your Investment Risk Profile.

Benefits:     

Your portfolio will be aligned to your Investment Risk Profile The recommended Funds / stocks are considered appropriate investments as outlined in our market research.

Making changes at each formal review allows you to take advantage of new market opportunities which may improve your returns and increase your wealth.

Rebalancing prevents the portfolio from drifting to higher risk levels than intended.

Rebalancing typically decreases portfolio risk.

Points to Consider:      

<Insert reason for sell down of funds / stocks> <Insert reason for purchase of funds / stocks> There will be transaction costs in selling down and purchasing investments.

If you do not implement these recommendations, you run the risk of having your portfolio not aligned to your risk profile / having underperforming investments that may impact your wealth creation strategy.

[Capital Gains] Selling down these investments will trigger capital gains. We recommend that you seek tax advice for exact calculations; we estimate the capital gains tax to be $XXX. Whilst extensive research has been conducted, there is no guarantee that the new investments will outperform the old ones. [Ongoing Service] We will review the allocation at your agreed ongoing review to adjust investments as required.

63. Redeem your Investment/s We recommend that you redeem your XXXX investment/s. This will give you access to approximately $XXX so that you can <Use of funds>. The proceeds from your investment should be directed to your XXX cash account / used to invest in XXX as per our recommendation.

Benefits:  

You will have the required funds for <Use of funds>.

We have recommended that you redeem XXX investment within your portfolio as <insert reason for fund selection>.

Points to Consider: 

 

[Capital gain] We estimate that you will have a capital gain of $XXX and based on your current marginal tax rate, the estimated tax would be $YYY. We recommend that you seek professional tax advice prior to the redemption being processed to confirm the tax liability.

[Transaction costs] There will be transactions costs in selling down and purchasing investments.

You will have less invested funds to meet your wealth creation goals.

64. Establish a Discretionary Trust We recommend that you establish a discretionary trust for the management and protection of your XXXX investments.

[Transfer Funds in] The funds to transfer into the Trust are as follows: 

<List any assets to be transferred to the trust and dollar value>

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

Cash from your XXX account that will be invested into a diversified portfolio of investments. Details of the investments recommended are outlined later in this SoA.

Benefits:      

Discretionary trusts provide protection of assets in the event of, for example, divorce and bankruptcy. This helps manage concerns about future events and the impact on beneficiaries to the Trust.

Setting up a discretionary trust can help in structuring your Estate Plan for the future by giving clarity to the allocation of income and assets of the Estate.

The Trustee of the Trust will have discretion as to how and to whom they pay income and assets of the trust, which can assist in managing tax for beneficiaries.

Assets held in the trust may be quarantined (except in NSW) from challenges to an estate from disgruntled beneficiaries.

The trustee is free to distribute trust income to as many beneficiaries as possible, and in proportions that take best advantage of those beneficiaries' personal marginal tax rates. The beneficiaries then pay the tax on distributions made to them.

Unlike a superannuation fund, adding assets within a discretionary trust can be done with no asset cap.

Points to Consider:     

  

A trust does not have to pay income tax on income that is distributed to the beneficiaries but does have to pay tax on undistributed income.

Trusts can be complex and time consuming to administer. It costs money to set them up and there are generally ongoing legal and accounting fees.

You will require legal advice on the establishment and inclusions of the Trust Deed. The costs may be significant and should be considered in light of the benefits the Trust can provide.

Trust income is assessable for Centrelink purposes and may impact beneficiary Centrelink entitlements.

Circumstances change and your preference for allocation of the assets and income of the Trust may also change.

It is important to review the Trust and associated instructions / documentation regularly to ensure it continues to reflect your wishes.

Franking credits cannot be passed to the beneficiaries of the Trust.

[In-specie transfer] Transferring existing assets in-specie to the Trust may trigger capital gains and therefore a tax liability for the owner of the asset. Please seek professional tax advice prior to transferring any assets.

Transaction costs will be payable on the transfer of assets into the Trust.

65. Establish a Family Trust We recommend that you establish a family trust for the management and protection of your XXXX investments. [Transfer Funds in] The funds to transfer into the Trust are as follows:  

<List any assets to be transferred to the trust and dollar value> Cash from your XXX account that will be invested into a diversified portfolio of investments. Details of the investments recommended are outlined later in this SoA.

Benefits:      

Family trusts provide protection of assets in the event of, for example, divorce and bankruptcy. This helps manage concerns about future events and the impact on family members of the Trust.

The Trustee of the Trust will have discretion as to how and to whom they pay income and assets of the trust, which can assist in managing tax for beneficiaries.

Franking credits from share dividends can be passed directly to beneficiaries.

Assets held in the trust may be quarantined (except in NSW) from challenges to an estate from disgruntled beneficiaries.

The trustee is free to distribute trust income to as many beneficiaries as possible, and in proportions that take best advantage of those beneficiaries' personal marginal tax rates. The beneficiaries then pay the tax on distributions made to them.

Unlike a superannuation fund, adding assets within a family trust can be done with no asset cap.

Points to Consider:  

A trust does not have to pay income tax on income that is distributed to the beneficiaries but does have to pay tax on undistributed income.

Trusts can be complex and time consuming to administer. It costs money to set them up and there are generally ongoing legal and accounting fees.

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  

 

You will require legal advice on the establishment and inclusions of the Trust Deed. The costs may be significant and should be considered in light of the benefits the Trust can provide.

Trust income is assessable for Centrelink purposes and may impact beneficiary Centrelink entitlements.

Circumstances change and your preference for allocation of the assets and income of the Trust may also change.

It is important to review the Trust and associated instructions / documentation regularly to ensure it continues to reflect your wishes.

[In-specie transfer] Transferring existing assets in-specie to the Trust may trigger capital gains and therefore a tax liability for the owner of the asset. Please seek professional tax advice prior to transferring any assets.

Transaction costs will be payable on the transfer of assets into the Trust.

66. Commence an Account-Based Pension We recommend that you commence an account-based pension to provide you with an income stream in your retirement.

We recommend that you draw the minimum $XXX per year payable monthly / quarterly / annually. Funds will be rolled over from your existing XXX Superannuation Fund.

[Partial rollover] We recommend that you leave $XXX in your YYY Fund to allow for further contributions / to pay insurance premiums.

Benefits:  

      

This account-based pension income of $XXX p.a., when combined with your Centrelink Age Pension of $XXX p.a. and Investment income of $YYY p.a., will meet your retirement income of $ZZZ each year.

You can nominate a reversionary beneficiary so that upon death, <Spouse name> can continue to receive your account-based pension as a pension. Alternatively, you can nominate beneficiaries to your account-based pension so that the balance can be paid to them upon death.

Pension payments will be made from the cash account of your account-based pension, avoiding the drawdown of your investments to meet pension payments.

You can access your balance at any time to meet your cash flow needs.

You can increase your income payments above the minimum payment.

[Over 60] Account-based pension income is tax-free and capital gains are also tax-free.

[Under 60] The tax-free portion of your account-based pension balance will be returned as tax-free pension payments. This portion is calculated at commencement of the pension.

The underlying investments will be invested in line with your Investment Risk Profile.

Our estimates indicate that your account-based pension will last for XX years if you draw the recommended amount each year. Please refer to the financial projections at the end of this SoA for further details.

Points to Consider:  

    

  

You must draw at least the minimum pension payment each year. The amount is based on your age and balance.

The current minimum pension payment has been reduced to half the normal rate to provide relief from the downturn in markets attributable to the COVID pandemic. These rates are set to return to the standard rates from 1 July 2023.

If you choose to withdraw more than the recommended income payment, your balance will reduce at a faster rate and your funds may not last to life expectancy as estimated.

Account-based pensions are now subject to a transfer balance cap of $1,700,000. Any excess over this threshold will need to be retained in superannuation and subject to the concessional tax rates that apply to super.

There is no guarantee that your funds will last as long as you need them. The balance is subject to market movements and may rise and fall over time.

[Under 60] Your pension payments will be taxable. We estimate a taxable portion of XX% and you will pay $XXX in tax on your pension payments in the first year.

Minimum payments are pro-rated when the account-based pension commences part way through the financial year. This amount must be paid out of the Fund before the account-based pension can be closed or rolled back to super.

Account-based pensions are considered a financial investment for Centrelink purposes and therefore any income paid is deemed and assessable for means testing.

Account-based pensions can only be purchased with money from superannuation.

[Reversionary beneficiary] The reversionary beneficiary may, at the time of your death, have the option to either: o Continue to receive the pension payments until the funds are exhausted. o Receive a lump sum (less any fees) of the account value at the time of payment.

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67. Reboot your Account-based Pension We recommend that you roll your pension back to superannuation to combine with your super / pension balance before recommencing a new account-based pension (Account-based pension). We estimate that your new balance will be a combined value of $XXX. We recommend that you continue to draw an income of $XXX per annum, payable monthly / quarterly / yearly, to help meet your retirement income needs. [Full rollover] Once the balances are combined and rolled over, you will no longer have any funds in superannuation. Your account-based pension will be invested in line with your Investment Risk Profile.

Benefits:   

      

You will have more funds to draw on for your retirement income needs.

You will pay less tax as Account-based pensions are tax free whereas superannuation earnings are taxed at 15%.

You can nominate <Spouse name> as a reversionary beneficiary so that upon death, <Spouse name> can continue to receive your Account-based pension as a pension. Alternatively, you can nominate beneficiaries to your Account-based pension so that the balance can be paid to them upon death.

You can access your balance at any time to make withdrawals.

You can increase your income payments above the minimum payment.

[Over 60] Account-based pension income is tax-free and capital gains are also tax free.

[Under 60] The tax-free portion of your account-based pension balance at commencement will be returned as tax-free pension payments.

This Account-based pension income of $XXX, when combined with your Centrelink Age Pension of $XXX and Investment income of $YYY, will meet your retirement income of $ZZZ each year.

The underlying investments will be invested in line with your Investment Risk Profile.

Our estimates indicate that your Account-based pension will last for XX years if you draw the recommended amount each year. Please refer to the financial projections at the end of this SoA for further details.

Points to Consider:  

     

 

You must draw at least the minimum pension payment each year. The amount is based on your age and balance.

The current minimum pension payment has been reduced to half the normal rate to provide relief from the downturn in markets attributable to the covid pandemic. These rates are set to return to the standard rates from 1 July 2023.

If you choose to withdraw more than the recommended income payment, your balance will reduce at a faster rate and your funds may not last to life expectancy as estimated.

Account-based pensions are now subject to a transfer balance cap of $1,700,000. Any excess over this threshold will need to be retained in superannuation and subject to the concessional tax rates that apply to super.

There is no guarantee that your funds will last as long as you need them. The balance is subject to market movements and may rise and fall over time.

[Under 60] Your pension payments may be subject to tax. We estimate that with a taxable portion of XX%, you will pay $XXX in tax on your pension payments in the first year.

Minimum payments are pro-rated when the Account-based pension commences part way through the financial year.

[Reversionary beneficiary] The reversionary beneficiary may, at the time of your death, have the option to either: o Continue to receive the pension payments until the funds are exhausted. o Receive a lump sum (less any fees) of the account value at the time of payment.

Account-based pensions are considered a financial investment for Centrelink purposes and therefore any income paid is deemed and assessable for means testing.

[Pre-2015 Account-based pension Centrelink client] As your existing Account-based pension started before 1 July 2015, it has favourable Centrelink treatment. Rolling back to super will mean you lose this. In certain circumstances, this can reduce your Centrelink payments. We have estimated that there will be no impact on your entitlements.

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68. Commence an Annuity Income Stream (Super money) We recommend that you commence a lifetime / term annuity with $XXX to provide you with an income stream in your retirement. We recommend an income payment of $XXX per annum, payable monthly / quarterly / annually. Funds will be rolled over from your XXX Superannuation Fund. [Indexed] Your annuity income payment will be fully / partially indexed in line with CPI. Benefits:     

 

Your income payment will be guaranteed for your lifetime / for XX years.

[Indexation] Your payments will increase in line with inflation to avoid erosion of your income payments.

[RCV] Your annuity will have a Residual Capital Value of $X. [Over 60] You will pay less tax as Annuities are tax free unlike superannuation that is concessionally taxed.

You can nominate a reversionary beneficiary so that upon death, <Spouse name> can continue to receive your Annuity income. Alternatively, you can nominate beneficiaries to your Annuity so that the residual value, if any, can be paid to them upon death.

This Annuity income of $XXX, when combined with your Centrelink Age Pension of $XXX, Account-based pension income of $XXX and Investment income of $YYY, will meet your retirement income of $ZZZ each year.

[Increase Age Pension] Your Annuity is treated more favourably for Centrelink means testing. As a result, we estimate your Centrelink Age Pension payment will increase by $XXX per fortnight ($XXX p.a.).

Points to Consider:      

[No withdrawal period] You will not have access to the balance of your Annuity.

[Withdrawal period] You will have a period of time within the term of your annuity where you can still access the balance. Full details are provided in the annuity quote attached.

You cannot vary the amount of income you receive from the Annuity once it has started.

[Nil RCV] Your annuity will not have a residual value to pay upon death.

[Under age 60] The taxable component of your Annuity payment will be taxed at your marginal tax rate of X% with a tax offset of 15%.

Annuities purchased with super money are now subject to a transfer balance cap of $1,700,000. Any excess over this threshold will need to be retained in superannuation and subject to the concessional tax rates that apply to super.

69. Commence an Annuity Income Stream (non-super money) We recommend that you commence a lifetime / term annuity with $XXX to provide you with an income stream in your retirement. We recommend an income payment of $XXX per annum, payable monthly / quarterly / annually. Funds will be drawn from your cash account / bank account / CMT / XXX investment. [Indexed] Your annuity income payment will be fully / partially indexed in line with CPI. Benefits:     



Your income payment will be guaranteed for your lifetime / for XX years.

[Indexation] Your payments will increase in line with inflation to avoid erosion of your income payments.

You can commence an Annuity with non-superannuation savings.

[RCV] Your annuity will have a Residual Capital Value of $X. You can nominate a reversionary beneficiary so that upon death, XXX can continue to receive your Annuity income. Alternatively, you can nominate beneficiaries to your Annuity so that the residual value, if any, can be paid to them upon death.

This Annuity income of $XXX, when combined with your Centrelink Age Pension of $XXX, Account-based pension income of $XXX and Investment income of $YYY, will meet your retirement income of $ZZZ each year.

Points to Consider:     

[No withdrawal period] You will not have access to the balance of your Annuity.

[Withdrawal period] You will have a period of time within the term of your annuity where you can still access the balance. Full details are provided in the annuity quote attached.

You cannot vary the amount of income you receive from the Annuity once it has started.

[Nil RCV] Your annuity will not have a residual value to pay upon death.

Based on the Annuity terms recommended, we estimate that your assessable income portion of the income payment will be $X in the first year. You will pay tax at your marginal tax rate of XX%. We recommend that you seek professional tax advice as to the actual tax payable on this income.

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70. Take Account-Based Pension benefit as a Lump Sum We recommend that you take your late husband’s / wife’s account-based pension (Account-based pension) proceeds of $XXX as a lump sum.

[Choose option] [Pay debt / expenses] You will be able to use this money to pay out your mortgage / other expenditure.

[Super] You can then recontribute this money into superannuation as a non-concessional contribution so that it does not affect your Centrelink entitlements prior to age pension age.

[Super] You can then recontribute this money into superannuation as a non-concessional contribution so that it increases the tax-free balance of your super for your adult children beneficiaries.

[Cash] This money should be paid into your XXX cash / bank account to enable these payments / contributions.

Benefits:   

[Pay debt] You can reduce debts owed / can be debt free.

[Estate Planning] As your adult children are not tax-dependents, recontributing to super will increase the balance of your super that can pass to them tax free upon your death.

[Centrelink] As you are under the Age-pension age, Account-based pensions are assessable and will affect your Centrelink payments. Contributing to super will protect them from being assessed until you reach age pension age.

Points to Consider:  

 

[Under 75 super] As you are under age 75 you may recontribute these funds to Super as a non concessional contribution at any time. Please refer to the Super Flyer for criteria.

[Super] There are limits to how much you can contribute to super. The current non-concessional contribution cap is $110,000, or $330,000 by using the bring-forward rule. The latter is essentially making three years contributions in the one year.

[Cash] Once withdrawn from the Account-based pension, you will not be able to put the money back in.

[Super] You will not be able to access these funds until you meet a condition of release such as permanent retirement from the workforce.

71. Take Account-Based Pension Death Benefit as an Income Stream We recommend that you take your late husband’s / wife’s account-based pension (Account-based pension) proceeds of $XXX as an income stream. We recommend that you draw the minimum $XXX per year payable monthly / quarterly / annually. Your new Account-based pension will be invested in line with your Investment Risk Profile.

Benefits:       

You can nominate beneficiaries to your Account-based pension so that the balance can be paid to them upon death.

You can access your balance at any time to make withdrawals.

You can nominate your income payments above the minimum payment.

[Over age 60] Account-based pension income is tax-free and capital gains are also tax free.

This Account-based pension income of $XXX, when combined with your Centrelink Age Pension of $XXX and Investment income of $YYY, will meet your retirement income of $ZZZ each year.

The underlying investments will be invested in line with your Investment Risk Profile.

Our estimates indicate that your Account-based pension will last for XX years if you draw the recommended amount each year. Please refer to the financial projections in the attachments to this SoA for further details.

Points to Consider:  



You must draw the minimum pension payment each year. The amount is based on your age and balance.

The current minimum pension payment has been reduced to half the normal rate to provide relief from the downturn in markets attributable to the covid pandemic. These rates are set to return to the standard rates from 1 July 2023.

If you choose to withdraw more than the recommended income payment, your balance will reduce at a faster rate and your funds may not last to life expectancy as estimated.

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

  

Account-based pensions are now subject to a transfer balance cap of $1,700,000. Any excess over this threshold will need to be retained in superannuation and subject to the concessional tax rates that apply to super. Your new pension will contribute to your cap.

There is no guarantee that your funds will last as long as you need them. The balance is subject to market movements and may rise and fall over time.

Minimum payments are pro-rated when the Account-based pension commences part way through the financial year.

Account-based pensions are considered a financial investment for Centrelink purposes and therefore any income paid is deemed and assessable for means testing.

72. Rollover your Defined Benefit Fund We recommend that you rollover your Defined Benefit Fund now that you have ceased employment with <Employer name>. The estimated value of the rollover, net of taxes, is $XXX. This will be rolled into an accumulation fund and invested according to your Investment Risk Profile.

Benefits:      

Your accumulation fund will be invested according to your risk profile.

You can now add your own contributions to your retirement savings in one Fund.

Your fund portfolio will be market-linked, allowing you to have exposure to investments with capital growth and income.

You can access your superannuation once you meet a condition of release such as retirement.

You will have greater control over the investment of your superannuation savings.

We estimate the value of your accumulation fund at your retirement age of XX to be $XXX, as compared to the estimated value of your defined benefit at retirement of $YYY. Further details regarding these calculations and assumptions are provided in the projections at the end of this SoA.

Points to Consider:      

Once you have withdrawn from the <DBF Name> Defined Benefit Fund, you will lose access to the associated retirement pension.

Superior returns are not guaranteed in the recommended accumulation fund. As they are market-linked they are subject to market volatility and the value may go up and down over time.

Estimates are based on the quote provided by XXX and may vary when the actual payment is made.

Additional contributions tax may be payable from the balance on withdrawal. We estimate this tax to be $XXX. We strongly advise that you receive specialist tax advice before making the rollover.

Rolling out of your defined benefit scheme early means that you won’t maximise the value of your potential pension from this Fund.

Some defined benefit funds have very favourable tax and Centrelink treatment. You will lose this when you rollover to an accumulation fund.

73. Retain your Defined Benefit Fund We recommend that you retain your XXX Defined Benefit Fund. This will give you access to a retirement pension of approximately $XXX p.a. at retirement.

Benefits: 

 

Your defined benefit pension is generous and based on our estimates, far superior to what may be provided if you rolled over to an accumulation style fund. Please refer to financial projections at the end of this SoA for further detail on these comparisons.

This Fund receives concessional tax treatment as well as favourable Centrelink treatment.

The pension at retirement is based on your final salary and the number of years worked with <Employer name>.

Point to Consider:    

You have no control over how the Fund is invested.

Strict conditions apply to contributions, tax and retirement funding and may impact your final pension.

The formula used to calculate your final benefit is subject to change.

Some Defined Benefit Funds lack liquidity which can impact their ability to pay pensions.

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74. Change your Account-Based Pension Income Payment We recommend that you increase / decrease your account-based pension (Account-based pension) payment to $XXX per annum, payable monthly / quarterly / yearly. [Increase] This will give you required funds to meet your increased living costs / fund your annual holidays / purchase a new car / purchase XXX. Benefits:     

Your pension payments will be more aligned to your budgeted expenses.

You can change these income payments at any time.

[Over 60] Account-based pension income is tax-free.

This Account-based pension income of $XXX, when combined with your Centrelink Age Pension of $XXX and Investment income of $YYY, will meet your retirement income of $ZZZ each year.

Our estimates indicate that your Account-based pension will last for XX years if you draw $XXX each year. Please refer to the financial projections at the end of this SoA for further details.

Points to Consider:  

 

You must draw the minimum pension payment each year. The amount is based on your age and balance.

The current minimum pension payment has been reduced to half the normal rate to provide relief from the downturn in markets attributable to the covid pandemic. These rates are set to return to the standard rates from 1 July 2023 If you choose to withdraw more than the recommended income payment, your balance will reduce at a faster rate and your funds may not last to life expectancy as estimated.

There is no guarantee that your funds will last as long as you need them. The balance is subject to market movements and may rise and fall over time.

75. Invest using a Model Portfolio We recommend that you invest into a model portfolio of shares / managed funds. This portfolio is aligned to your Investment Risk Profile.

Benefits:      

Model portfolios provide a pre-constructed portfolio designed to maximise performance for the chosen level of risk, income and growth.

[Shares] Share dividend income is tax-effective when franking credits are provided.

You will hold the shares / managed funds directly.

You will receive consolidate reporting on the portfolio.

You can sell down the portfolio at any time should you need the funds for unforeseen expenditure.

[Managed Funds] Managed Funds give you access to a greater level of diversification across companies, sectors and markets as well as access to professional investment management expertise.

Points to Consider:  

  

[Increase in Growth Exposure] The recommended investment has a higher allocation to growth investments than your current cash / savings / investment account. This will increase the volatility of your investment.

[Increase in Cash / Fixed Interest Exposure] The recommended investment is to a cash / fixed interest / term deposit investment. Whilst there is guaranteed income, you will not have exposure to capital growth as you would with shares or property and therefore the returns may be less.

There will be costs involved should you sell down your portfolio in the future.

[Model portfolio cost] You will pay an administration fee for management of the model portfolio.

The portfolio may not always align closely with your Investment Risk Profile. This will need to be adjusted from time to time.

76. Re-contribute to your Superannuation We recommend that you withdraw $XXX from your XXX Superannuation Fund and re-contribute it back as a nonconcessional contribution into the same superannuation account.

Benefits:

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

 

Your withdrawal will be made up of $XXX tax free and $XXX taxable components. When you re-contribute this to super, it will be tax free. This is especially favourable for estate planning where non-dependants may receive the proceeds of your superannuation. The tax-free component will be received tax free, regardless of their dependency status.

[Over 60] As you are over 60, there is no tax payable on the taxable component of your withdrawal.

[Below low cap] As your taxable component is below the low-cap threshold, there is no tax payable on the taxable component of your withdrawal.

Points to Consider:     

You must meet a condition of release to be able to withdraw from your superannuation.

You must be eligible to contribute to make the re-contribution back into superannuation.

[Tax payable] There will be $XXX tax payable on the taxable component of your superannuation at withdrawal.

This will be deducted from the withdrawal providing a net payment of $YYY. Transaction costs may apply to the sell down and re-purchase of investments.

A non-concessional contribution cap of $110,000 applies to the amount you put back into superannuation. The three year bring-forward rule allows you to make a $330,000 contribution. It is important you have not made any other contributions in the preceding three years when using the bring-forward rule. Please let us know if you have omitted to tell us of prior contributions that may affect these caps.

77. Nominate <Spouse name> as a Reversionary Beneficiary We recommend that you nominate <Spouse name> as a reversionary beneficiary to your pension income stream. This will ensure your income stream continues in the event of your death, passing directly to <Spouse name>.

Benefits:   

Reduced administration and paperwork upon death. <Spouse name> will continue to receive a tax-free income stream.

Income can be modified to adapt to changing lifestyle needs.

Points to Consider:  

[Existing pension] <Spouse name> will not be able to combine the new pension with their existing pension; it must remain separate.

The new pension will be subject to the transfer balance cap of $1,700,000. Any excess over this threshold will need to be returned to superannuation and subject to the concessional tax rates that apply to super.

78. Retire on an Income of $<Retirement income>at age <Retirement age> You would like to retire at age <Retirement age> on an income of $<Retirement income> p.a. We recommend that your retirement income be sourced as follows:       

Account-based Pension of $XXX p.a.

Annuity income of $XXX p.a.

Investment Dividend / Distribution income of $XXX p.a.

Interest on cash accounts of $XXX p.a.

Rental income of $XXX p.a.

Centrelink/DVA age pension of $XXX p.a.

Drawdown on investments of $XXX p.a.

We estimate your retirement income to be $<Retirement income>p.a. which exceeds / meets your retirement income goal.

Benefits:    

You will have your desired level of income in retirement to meet your budgeted lifestyle expenses.

[Holiday] You will be able to take an annual holiday.

You will have adequate cash flow to <list specific expenses if itemised>.

We estimate that drawing this level of income, your funds will last XX years / will continue well beyond your life expectancy. Please refer to our financial projections at the end of this SoA for further details.

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

[No asset selldown] You will not have to sell down your assets / investments to meet your income needs.

Points to Consider: 

  

[Funds won’t last] Our estimates indicate that your funds will not last your life expectancy if you draw the level of income you desire. You may need to re-evaluate your expenditure or run the risk of relying on Centrelink in the latter years of your retirement.

Our estimates of your retirement funding are based on numerous assumptions as outlined in the financial projections of this SoA. There is no guarantee that your funds will last as predicted.

Whilst due care has been taken to budget your expenses, your actual expenditure might be higher. This may impact the longevity of your assets in retirement.

[Growth Profile] Your portfolio is subject to market volatility and a decrease in the value of your investments will reduce the income available to draw from these investments.

79. Commence a Transition to Retirement Income Stream with salary sacrifice We recommend that you commence a transition to retirement income stream by rolling $XXX from your YYY Super Fund, leaving a balance in super of $ZZZ. This will help to supplement your income now that you have reduced your work hours / pay off your mortgage in preparation for retirement / pay for <expense> as you cannot afford to pay this from other income sources. We recommend that you draw the minimum pension of $XXX p.a. / an amount of $XXX p.a. / the maximum of 10%.

We recommend that you salary sacrifice an amount of $XXX p.a. to contribute to your superannuation, to top up your retirement savings from tax-effective income.

Benefits:           

[Cash reserve] Maintaining 12, 18, XX months of pension payments in cash will provide liquidity for payments without the need to sell down your investments.

You can access your superannuation prior to retirement as you are over preservation age.

[Over 60] Your transition to retirement income stream income payments will be tax free as you are over age 60.

You will be able to meet your ongoing living expenses / purchase XXX / pay your mortgage / loan.

You can replace the income you have drawn with tax-effective superannuation contributions from your pre-tax income.

[Under 60] Your income tax will reduce as the pension income that is taxable can be reduced by a 15% tax offset.

Salary sacrifice contributions are tax effective as your marginal tax rate is XX% and superannuation is charged at a rate of 15%.

The level of income drawn can be varied each year (within the minimum 2 / 4% and maximum 10%) in the event your needs change.

We estimate you will increase your retirement balance by an extra $XXX over in the next XX years.

Our projections indicate that you may have annual tax savings of approximately $XXX per annum.

[Cash flow neutral] Your take home pay will remain the same.

Points to Consider: 

      

The current minimum pension payment has been reduced to half the normal rate to provide relief from the downturn in markets attributable to the covid pandemic. These rates are set to return to the standard rates from 1 July 2023.

[Negative cash flow] You will be spending more drawing the transition to retirement income stream than you will be saving through your super contributions. This will mean you have less available at retirement.

[Under 60] As you are under 60, you will pay your marginal tax rate on the taxable portion of your transition to retirement income stream income. You will receive a 15% tax offset on tax paid.

Investment earnings with a TTR income stream are taxable at up to 15% [Insurance] As you have cover in place in your existing superannuation, we have recommended that you leave enough money in the account to avoid the insurance lapsing.

The maximum you can draw from a transition to retirement income stream is 10% of the Fund balance as determined at commencement.

A concessional cap of $27,500 p.a. applies to concessional contributions. [Balance less than $500,000] As your balance is less than $500,000, you can carry forward unused concessional contributions for up to 5 years.

Exceeding the concessional cap will result in additional tax payable.

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  

You will not be able to access the balance of your pension or super until you meet a condition of release such as retirement.

Salary / wage increases may result in exceeding the cap. Please contact our office so that we can amend the contribution amount.

The Transfer Balance cap for income streams means that only $1,700,000 can be transferred from super at retirement. The remaining balance will need to stay in super.

80. Commence a Transition to Retirement Income Stream <no salary sacrifice> We recommend that you commence a transition to retirement income stream by rolling $XXX from your YYY Super Fund, leaving a balance in super of $ZZZ. This will help to supplement your income now that you have reduced your work hours / pay off your mortgage in preparation for retirement / pay for <expense> as you cannot afford to pay this from other income sources. We recommend that you draw the minimum pension of $XXX p.a. / an amount of $XXX p.a. / draw the maximum of 10%.

Benefits:      

You can access your superannuation prior to retirement if you are over preservation age.

[Over 60] Your transition to retirement income stream income payments will be tax free as you are over age 60.

You will be able to supplement your income now that you have reduced your work hours / pay off your mortgage in preparation for retirement / pay for <expense> as you cannot afford to pay this from other income sources.

[Under age 60] Your income tax will reduce as the pension income that is taxable can be reduced by a 15% tax offset.

[Cash reserve] Maintaining 12, 18, XX months of pension payments in cash will provide liquidity for payments without the need to sell down your investments.

The level of income drawn can be varied each year (within the minimum 2 / 4% and maximum 10%) in the event your needs change. COVID MINIMUM IS 2%

Points to Consider: 

You will be spending more from drawing the transition to retirement income stream than you will be saving through your super contributions. This will mean you have less available at retirement.



The current minimum pension payment has been reduced to half the normal rate to provide relief from the downturn in markets attributable to the covid pandemic. These rates are set to return to the standard rates from 1 July 2023.

[Under 60] As you are under 60, you will pay your marginal tax rate on the taxable portion of your transition to retirement income stream. You will receive a 15% tax offset on tax paid.

Investment earnings with a TTR income stream are taxable at up to 15% [Insurance] As you have cover in place in your existing superannuation, we have recommended that you leave enough money in the account to avoid the insurance lapsing.

The maximum you can draw from a transition to retirement income stream is 10% of the balance of the Fund.

   

81. Transfer your UK Pension to an Australian Super Fund We recommend that you transfer your UK Pension of approximately £XXX, to your existing XXX Super Fund / to the recommended Australian-based Super Fund.

Benefits:      

You can amalgamate your Australian and UK retirement savings here in Australia.

You can choose how these funds are invested within your superannuation fund.

Your retirement savings will be in a concessionally taxed environment.

Estate Planning options are more generous under Australian law than UK pension law. You can nominate beneficiaries other than your spouse.

Once you are over 60, a pension paid from super is tax-free income in Australia.

The UK and Australia have a tax agreement in place which limits taxation to the country of residence, so you only pay it once. Based on your current residency status, you will pay tax in Australia / the UK.

Points to Consider:

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  



  

The Fund accepting the transfer must be a Qualifying Recognised Overseas Pension Scheme (QROPS). Changes to rules regarding pensions in the UK in April 2015 have made it more difficult for Funds to qualify. We have confirmed that your Fund / the Fund recommended here is a QROPS Fund.

You cannot get access to your UK pension funds until you are over 55. There is no early release as we have here in Australia.

Your transfer will be treated as a non-concessional contribution and have to meet appropriate contribution caps.

A non-concessional contribution cap of $110,000 applies to the amount you put back into superannuation. The three year bring-forward rule allows you to make a $330,000 contribution. It is important you have not made any other contributions in the preceding three years when using the bring-forward rule. Please let us know if you have omitted to tell us of prior contributions that may affect these caps.

Income streams paid from super at retirement are now subject to a transfer balance cap of $1,700,000. Any excess over this threshold will need to be retained in superannuation and subject to the concessional tax rates that apply to super.

There are significant transaction costs associated with transferring your pension from the UK. We estimate these costs to be $XXX. The transfer may take considerable time before it makes it to your Australian Super Fund.

There is a risk that currency movements may adversely impact the value of your UK Pension.

82. Withdraw $XXX from your Account-based Pension We recommend that you make a withdrawal (commutation) of $XXX from your <Account-based pension Name> accountbased pension. This will help you to pay for your holiday / a new car / a new fridge / other. We recommend this withdrawal be taken from your account-based pension cash account / other investment option.

Benefits:

   

You have access to funds within your account-based pension at any time as required, such as now.

[Centrelink reduced assets change in payment] We estimate that your Centrelink benefit payment will increase from $XXX per fortnight to $XXX per fortnight. This is an annual increase of $XXX p.a. as a result of your pension balance reducing.

No tax is payable on withdrawal from your account-based pension.

Your account-based pension and income payments will continue unchanged for this financial year. The withdrawal will reduce your balance and the minimum pension payable for next financial year.

Points to Consider: 

 

You will have less money for future years. Making withdrawals will impact the longevity of your account-based pension. We estimate that your account-based pension will last XX years. Please refer to our financial projections later in this SoA for further details.

There may be transaction costs to sell down your portfolio.

You cannot add money to an account-based pension and you will need to satisfy superannuation contributions rules to add back to super.

83. Make a Downsizer Contribution to Super We recommend that you contribute the proceeds of $XXX from the sale of your home to your YYY Superannuation Fund.

The remaining balance of the proceeds should be directed to your cash account as an emergency cash reserve / invested into XXX / used to pay for <outline expenses>.

Benefits:    

You can contribute these proceeds tax-free to your superannuation to boost your retirement savings.

You will have more money invested in the concessionally taxed superannuation environment and available to rollover to a tax-free account-based pension in retirement.

Downsizer contributions form part of the tax-free component of your superannuation savings, making them taxeffective in estate planning.

The contribution will not form part of the balance of your superannuation until the end of the financial year, meaning that it won’t be means tested for Centrelink purposes until the next financial year.

Points to Consider:

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 



You can contribute up to $300,000 as a one-off downsizer contribution for both yourself and your partner.

To be eligible to make a downsizer contribution, you must: o Be over 60 o Have a settlement date for your property after 1 July 2018 o Have held the home for more than 10 years o Made the contribution within 90 days of receiving the proceeds of sale o Have your home in Australia and not a caravan, boat or other mobile home. o Ensure the proceeds from sale are not subject to capital gains tax. o Complete the Downsizer Contribution Form.

This contribution will count towards your transfer balance cap of $1,700,000. This is the maximum you can have in an income stream that is tax-free in retirement.

84. Borrow to invest via your Self-Managed Super Fund - Property We recommend that you borrow to invest in XXX property within your Self-Managed Super Fund (SMSF). To meet SMSF rules, this will need to be a Limited Recourse Borrowing Arrangement (LRBA) where only one asset is held against the loan.

We recommend that you use existing SMSF cash / XXX investments to provide for a deposit of $XXX on the property purchase. We then recommend that you borrow the remaining $YYY which equates to XX% of the property value.

Transaction costs for the loan and property will be funded from your SMSF cash account.

Process: 1.

2.

3.

4.

5.

Review your SMSF Trust Deed to ensure it allows for borrowing funds.

Review your investment strategy to ensure the property holding is within the desired asset allocation for the Fund.

Calculate the amount required to borrow and engage a lending professional to provide finance.

Establish a Bare trust and corporate Trustee in consultation with a Solicitor for the ownership of the property.

Make sure the property Title is in the Bare Trust name, rather than the SMSF. Document Trustee meeting minutes for this process.

Cost Schedule: Property Value Deposit Stamp Duty Legal costs (inc. BARE trust/trustee) Loan fees Advice fees Accounting fees Total upfront fees

$XXX $XXX $XXX $XXX $XXX $XXX $XXX $XXX

Source from SMSF cash/ LRBA SMSF cash SMSF cash SMSF cash SMSF cash SMSF cash SMSF cash

Benefits:      

You can purchase XXX property to hold within your SMSF. Without the loan, you would not have enough money in super to make this purchase.

[Commercial property] You can own your business premises, giving you further control over the fixed operating costs of your business.

Recourse is limited to the property the loan relates to; other SMSF assets are protected.

Gearing can magnify returns by allowing you increased exposure to growth markets such as property. This may increase your benefits at retirement.

[Property bias] This property is in line with your preference to hold property as the growth portion of your portfolio rather than shares.

Rental income will be taxed at concessional superannuation rates of 15% rather than your marginal tax rate.

Points to Consider:    

The property must meet the ‘sole purpose test’ which is to provide retirement benefits for the SMSF members.

The property must be a ‘single acquirable asset’ which normally means, for example, one property title not two.

A Security Trust is essentially a bare trust arrangement established specifically for the purposes of one entity holding an Asset on trust for another entity. Under such an arrangement, legal title to the Asset is acquired by the Security Trustee, while the SMSF Trustee generally obtains an absolute beneficial interest in the Asset.

The property must be owned by the BARE Trust not the SMSF to avoid breaches relating to payment of benefits.

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          

The property purchase must be at arm’s length and not from a related party (with the exception of commercial property).

Where a loan is provided by a financial institution to the SMSF Trustee, the financial institution may require the Security Trustee to be a company. In addition, some financial institutions will also require that the SMSF Trustee also be a company (and not individuals). It is important to determine the requirements of the lender in all circumstances.

You must review your SMSF Trust Deed to ensure that this significant property asset allocation is within the Investment Strategy guidelines.

There are limitations as to the type of property that you can purchase. Please confirm that it complies prior to purchasing the property.

Lending for LRBA purposes within super is restrictive and more expensive than regular investment lending. You need at least a 30% deposit (depending on the lender).

You can borrow the money from a related party that is not a bank as long as the terms of the loan are commercial.

LRBA loans must be repaid on a principal and interest basis making the repayments higher than a traditional interest-only investment loan.

The limited recourse structure means that the borrower can only use the property as security for the loan.

[Commercial property for business] Your business must lease the property at commercial rental rates.

As property is exposed to market conditions, the value can rise and fall.

Gearing can also magnify losses due to the increased exposure to markets.

If the Funds current cash flow of contributions and earnings is not adequate to meet the loan repayments, you may need to make additional contributions.

This strategy will / will not result in a credit to your Transfer Balance cap for retirement. This will / will not impact the benefit you are able to transfer to the tax-free pension phase in retirement.

85. Borrow to invest via your Self-Managed Super Fund - Investment We recommend that you borrow to invest in XXX investment within your Self-Managed Super Fund (SMSF). To meet SMSF rules, this will need to be a Limited Recourse Borrowing Arrangement (LRBA) where only one asset is held against the loan.

We recommend that you use existing SMSF cash / XXX investments to provide for a deposit of $XXX on the investment purchase. We then recommend that you borrow the remaining $YYY which equates to XX% of the investment value.

Transaction costs for the loan and investment will be funded from your SMSF cash account.

Process: 6.

7.

Review your SMSF Trust Deed to ensure it allows for borrowing funds.

Review your investment strategy to ensure the investment holding is within the desired asset allocation for the Fund.

8. Calculate the amount required to borrow and engage a lending professional to provide finance.

9. Establish a Bare trust and corporate Trustee in consultation with a Solicitor for the ownership of the investment.

Make sure the investment Title is in the Bare Trust name, rather than the SMSF. 10. Document Trustee meeting minutes for this process.

Cost Schedule: Property Value Deposit Stamp Duty Legal costs (inc. BARE trust/trustee) Loan fees Advice fees Accounting fees Total upfront fees

$XXX $XXX $XXX $XXX $XXX $XXX $XXX $XXX

Source from SMSF cash/ LRBA SMSF cash SMSF cash SMSF cash SMSF cash SMSF cash SMSF cash

Benefits:   

You can purchase XXX investment to hold within your SMSF. Without the loan, you would not have enough money in super to make this purchase.

[Commercial property] You can own your business premises, giving you further control over the fixed operating costs of your business.

Recourse is limited to the investment the loan relates to; other SMSF assets are protected.

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

Gearing can magnify returns by allowing you increased exposure to growth markets such as the share market.

This may increase your benefits at retirement.

Points to Consider:      

         

The investment must meet the ‘sole purpose test’ which is to provide retirement benefits for the SMSF members.

The investment must be a ‘single acquirable asset’ which normally means, for example, one property title not two.

A Security Trust is essentially a bare trust arrangement established specifically for the purposes of one entity holding an Asset on trust for another entity. Under such an arrangement, legal title to the Asset is acquired by the Security Trustee, while the SMSF Trustee generally obtains an absolute beneficial interest in the Asset.

The investment must be owned by the BARE Trust not the SMSF to avoid breaches relating to payment of benefits.

The investment purchase must be at arm’s length and not from a related party.

Where a loan is provided by a financial institution to the SMSF Trustee, the financial institution may require the Security Trustee to be a company. In addition, some financial institutions will also require that the SMSF Trustee also be a company (and not individuals). It is important to determine the requirements of the lender in all circumstances.

You must review your SMSF Trust Deed to ensure that this significant investment asset allocation is within the Investment Strategy guidelines.

There are limitations as to the type of investment that you can purchase. Please confirm that it complies prior to purchasing property.

Lending for LRBA purposes within super is restrictive and more expensive than regular investment lending. You need at least a 30% deposit depending on the lender.

You can borrow the money from a related party that is not a bank as long as the terms of the loan are commercial.

LRBA loans must be repaid on a principal and interest basis making the repayments higher than a traditional interest-only investment loan.

The limited recourse structure means that the borrower can only use the investment as security for the loan.

As investment is exposed to market conditions, the value can rise and fall.

Gearing can also magnify losses due to the increased exposure to markets.

If the Funds current cash flow of contributions and earnings is not adequate to meet the loan repayments, you may need to make additional contributions.

This strategy will / will not result in a credit to your Transfer Balance cap for retirement. This will / will not impact the benefit you are able to transfer to the tax-free pension phase in retirement.

86. Transfer business real property to your SMSF We recommend that you transfer your business real property into your SMSF. This will be in lieu of a cash contribution to increase your retirement savings. We recommend that you contribute $XXX as a non-concessional contribution and $XXX as a concessional contribution.

Benefits:      

Your business can lease the property from your SMSF at commercial rental rates.

Commercial property has traditionally provided strong rental income returns.

Any rental income or realised capital gains will be taxed at the concessional superannuation tax rates (currently 15%).

A business property transfer allows a member to significantly increase their retirement savings by contributing their business to their SMSF with no need to sell the property.

Assets held within an SMSF are generally protected from creditors in the case of bankruptcy.

[Property bias] This property is in line with your preference to hold property as the growth portion of your portfolio rather than shares.

Points to Consider:   



This purchase must be at arm’s length and at market value. You should seek an independent valuation to determine the market value of the property.

The property should be let at commercial rates.

Transferring an active asset such as business real property does not automatically mean you can use the small business lifetime CGT cap and therefore, normal contributions limits will apply. You should seek specialist tax advice or even a tax ruling from the ATO, to determine which caps apply. This will avoid you exceeding the cap and paying tax on the excess.

Capital gains tax may be payable when the property is transferred to the SMSF.

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 

You must review your SMSF Trust Deed to ensure that this significant property asset allocation is within the Investment Strategy guidelines.

Borrowing against a property within super has restrictive rules which must be adhered to. Please seek further advice before borrowing within your SMSF. Transferring and holding business real property in an SMSF may incur several costs, duties and taxes, including:  legal fees,  stamp duty, goods and services tax and land tax,  strata levies, council rates and property maintenance fees.

These costs are estimated to be $XXX upfront and $XXX each year thereafter and should be considered before deciding to hold this property in your SMSF. Capital Gains Tax - Small business owners have potentially one, or a combination of four, concessions available to reduce any capital gain upon the sale of active assets of a business. We recommend you seek professional tax advice before transferring your business property to super.

87. Establish a Self-Managed Super Fund We recommend you establish a Self-Managed Super Fund (SMSF) and rollover funds from your existing Superannuation for a total of $XXX. We recommend that you leave $XXX in YYY Super Fund to continue the cost-effective insurance cover you have in place within the Fund. These funds will be invested into a diverse portfolio of managed funds / shares / exchangetraded funds in line with your Investment Risk Profile.

[Individual Trustees] We recommend that each of you be appointed as individual Trustees and members of the Fund.

[Corporate Trustee] We recommend that you set up a Corporate Trustee by establishing a company and appointing each of you as Directors of the Company. [Allow borrowing] This will allow you to borrow to invest in property now or in the future.

Future Employer (SG) as well as any other contributions should be directed to the SMSF. We recommend a centralised cash hub to manage the day-to-day cash flow of the SMSF. Benefits:       

As Trustees of your own Fund, you will have greater control over the selection and management of investments.

You will be able to hold a broader range of investments including direct property.

You have the option to be more involved in the ongoing management of the Fund.

[Admin service] We recommend <Admin service Provider> to assist you in administration and preparation of annual returns and audits. Full service is approximately $XXX p.a.

You can both / all be members of the one fund and may introduce other family as members also.

Having your own SMSF can be tax-effective as you can manage individual buys and sells to maximise tax outcomes whilst also investing in tax-effective investments such as shares with franked dividend income.

A family SMSF can assist with estate planning for the future.

Points to Consider:  

      

The legal and other costs to establish your SMSF will be $XXX and the ongoing fees are estimated to be an additional $XXX per annum.

As Trustees of the SMSF, there are numerous roles and responsibilities that you assume. You cannot delegate these duties to professionals, you will be ultimately responsible for the running of the Fund in compliance with the Trust Deed and ATO requirements.

All the directors of the fund must meet the eligibility requirements and register for a Director ID with Australian Business Registry Services.

When you register the fund with the ATO, you must provide the tax file number (TFN) for each director of the fund to the ATO. If you do not meet your Trustee obligations and your SMSF is deemed non-complying, you will lose the super concessional tax rate of 15% and 45% will apply.

SMSFs are limited to 6 members. Some State trust law prohibits more than 4 individual trustees and therefore a corporate trustee might be more appropriate where there are more than 4 members.

Due to the significant ongoing fixed costs for SMSFs (estimated to be $XXX p.a.), you need a significant balance of $300,000 or more to make it cost-effective.

You will not have access to the Superannuation Complaints Tribunal and Special Compensatory Schemes if you lose money due to theft or fraud.

Running SMSFs can be time consuming.

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 





As part of the Fund establishment, you need to provide an investment and insurance strategy that takes into consideration the needs and preferences of all Fund members. The investment strategy then provides the framework from within which you make the investment decisions of the Fund.

There will be transaction costs for the rollover of your accounts. This will include buy / sell, exit fees and/or brokerage. Please refer to the Fee Section of this SoA for further explanation.

You will need to consider all outcomes for your members such as funding retirement benefits, death and disability. You should also consider what would occur if you need to wind up the SMSF. Thinking in advance of these implications can save you money in the long term.

[Insurance lost] You will lose your existing insurance cover with XXX Super Fund of $XXX Life / $XXX TPD / $XXX Income Protection. We have made insurance recommendations for the replacement of this cover in this SoA. Do not cancel insurance until new cover has been accepted. OR You have adequate cover already in place (within the SMSF).

SMSFs are regulated by the ATO. For further information on your role and responsibilities, please refer to their website. A number of guides are provided and include: o Thinking about Self-Managed Super o Setting up a Self-Managed Super Fund o Running a Self-Managed Super Fund o Paying benefits from a Self-Managed Super Fund o Winding up a Self-Managed Super Fund.

88. Review your Self-Managed Super Fund Trust Deed and Investment / Insurance Strategy In light of the recommendations made in this SoA, we recommend that you review your Self-Managed Super Fund (SMSF) Trust Deed as well as the associated Investment and Insurance Strategy.

Benefits:   

This will meet your Trustee obligation to regularly review the Investment and Insurance Strategy of the SMSF. Investment recommendations within this SoA will be aligned to the SMSF Investment Strategy and allowable under the Trust Deed.

[Insurance] The members of the Fund have insurance in place in the event of death, illness or injury.

Points to Consider: 

 

    

The trust deed can be amended however the trustee must follow the guidelines for amending the deed as set out in the original trust deed of the fund. Further to this, amendments to the trust deed cannot reduce a member's entitlements unless it is approved with the written consent of the members or the regulator (which in the case of SMSFs is the ATO).

The governing rules of a superannuation fund are deemed to include certain covenants which cannot be avoided or modified. These covenants (contained in section 52 of the SIS Act) are in addition to any obligations which general trust law may impose on the trustees.

You need to make sure the Trust Deed allows these recommendations, and the Investment and Insurance Strategy are up to date. Breaches of the Trust and Trustee obligations can mean losing the concessional tax treatment of your super.

Trustee meeting minutes need to be documented to evidence this review.

As Trustees, you need to make sure the investments within the SMSF are in line with the Investment Strategy and that any changes required are made in a timely manner.

[Insurance] You are required to review the Insurance Strategy regularly to ensure that you have considered each members’ insurance needs.

[Update Trust deed] You will need to seek legal advice to update the Trust Deed.

The ATO has provided some guidance on key considerations in reviewing the investment strategy:  Investing in a way to maximise member returns taking into account the risk associated with the investment  Diversification and the benefits of investing across a number of asset classes (for example, shares, property and fixed deposit) in a long-term investment strategy  The ability of your fund to pay benefits as members retire and pay other costs incurred by your fund  Whether to hold insurance cover for one or more members of your SMSF  The circumstances of members (for example, age, income level, employment pattern and retirement needs).

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89. Consolidate Super into your Self-Managed Super fund We recommend that you consolidate your existing XXX Super Fund/s into your Self-Managed Super Fund (SMSF). We recommend that you leave $XXX in YYY Super Fund to continue the cost-effective insurance cover you have in place within the Fund. These funds will be invested into a diverse portfolio of managed funds / shares / exchange-traded funds in line with your SMSF Investment Strategy.

Benefits:     

Having all your super in one place will reduce the ongoing administrative burden of tracking and managing multiple accounts.

As many fees for your SMSF are fixed, it is more cost-effective to direct all super into this account.

You will have greater control over the selection and management of investments.

You will be able to hold a broader range of investments including direct property.

You have the flexibility to manage individual buys and sells to maximise tax outcomes whilst also investing in taxeffective investments such as shares with franked dividend income.

Points to Consider: 

     



As Trustees of the SMSF, there are numerous roles and responsibilities that you assume. You cannot delegate these duties to professionals, you will be ultimately responsible for the running of the Fund in compliance with the Trust Deed and ATO requirements.

If you do not meet your obligations and your SMSF is deemed non-complying, you will lose the concessional tax rate of 15% and 45% will apply.

Due to the significant ongoing fixed costs for SMSFs (estimated to be $XXX p.a.), you need a significant balance of $300,000 or more to make it cost-effective.

You will not have access to the Superannuation Complaints Tribunal and Special Compensatory Schemes if you lose money due to theft or fraud.

Running SMSFs can be time consuming.

There will be transaction costs for the rollover of your accounts. This will include buy / sell, exit fees and/or brokerage. Please refer to the Fees Section of this SoA. [Lose insurance] You will lose your existing insurance cover with XXX Super Fund of $XXX Life / $XXX TPD / $XXX Income Protection. We have made insurance recommendations for the replacement of this cover in this SoA. Do not cancel insurance until new cover has been accepted. OR You have adequate cover already in place (within the SMSF).

There is no guarantee that the investment in the Fund selected for consolidation will outperform your previous Funds.

90. Wind-Up (Close) your Self-Managed Super Fund We recommend that you close (wind-up) your Self-Managed Super Fund (SMSF) and rollover the proceeds to XXX Superannuation Fund. We also recommend that you close the Corporate Trustee Company once the SMSF is wound up and final documentation lodged. [Based on cost] Your SMSF is no longer cost-effective and therefore you wish to consider lower-cost options. [Direct property sold] You have sold your investment / commercial property and finalised your LRBA and as you do not wish to make any further direct property investments, you no longer have a need for the SMSF. [Relationship Breakdown] You need to wind up your SMSF as XXX has left the Fund and it is no longer viable with a reduced balance. [Retirement] You would like to reduce the time spent on your super in preparation for your retirement. Simplifying the ongoing management and your responsibilities is important at this time.

Benefits:     

[Trustee obligations] You will no longer have to manage your own Fund. You have found this an onerous task and wish to simplify your responsibilities in the future.

[Reduced Cost] We estimate that the management costs for your super will reduce by $XXX in the first year.

You will spend less time managing your super in your retirement.

[Property] Selling your property has enabled the closure of your SMSF. You will get access to professional investment managers to assist in the investment of your retirement savings.

Points to Consider:  

The wind up of your SMSF can be costly and takes time. You need to ensure that you address the wind-up instructions in the Trust Deed of the Fund.

Your Trustee responsibilities do not cease until the final Return has been lodged and tax paid.

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In some cases, you can pay benefits to members when you wind up your SMSF. In other cases, the members won’t meet a 'condition of release' to access their benefits, so you will need to roll the benefits over to another complying super fund.

There may be capital gains tax (CGT) on the disposal of SMSF assets.

The ATO outlines key components of the wind-up process as follows: o Pay out or rollover all super (leaving a sufficient amount to pay final tax or expenses if required) o Appoint an SMSF auditor to complete the final audit o Complete and lodge the final SMSF annual return (including wind-up details) o Pay any outstanding tax o After all expected liabilities have been settled and requested refunds are received, close the fund’s bank account. o Once a fund is wound up, it cannot be reactivated.

91. Make Super Contributions using the First Home Super Saver Scheme (FHSSS) We recommend that you make a concessional / non-concessional contribution to your XXX Super Fund to save for a home deposit. Effective from 1 July 2017, you use your contributions made to super to put towards your first home deposit.

Benefits:    

You can use the concessionally-taxed environment of super to save for a home deposit.

[NCC] Non-concessional contributions can be withdrawn tax-free.

[CC] Concessional contributions will be taxed on withdrawal at your marginal tax rate however you will receive a tax offset of 30% on this tax.

Not having access to these funds can help you be more disciplined in leaving it for the intended purpose of buying a house.

Points to Consider:      

You must not have purchased another home before in Australia or claimed the FHSSS previously to be eligible.

You can nominate $15,000 of your contributions in any one year to go towards your deposit and a maximum of $50,000 plus associated earnings across all years.

You must withdraw your FHSSS prior to property purchase to avoid additional tax.

Once withdrawn, you must purchase a home within 12 months and live or intend to live in it, for 12 months.

It can take up to 25 business days for the withdrawal to be processed.

You must notify the ATO within 28 days of signing a Contract to purchase a home or alternatively you can recontribute the FHSSS amount and notify the ATO within 12 months.

92. Review your Binding Death Nomination We recommend that you review your binding death benefit nomination for your superannuation. This nomination will be lapsing / non-lapsing.

Benefits:       

[Binding] A binding nomination, for an allowable dependant or your Estate, instructs the Trustee of the Fund to pay any proceeds according to your wishes.

[Non-lapsing] As long as your nomination remains current, a non-lapsing nomination means that you don’t need to update it every three years as it does not expire.

The proceeds of your retirement savings will be distributed according to your wishes on death.

Careful planning helps to manage tax implications of proceeds distributed.

Nominating your intentions can reduce disputes and costly legal intervention.

You can change your nominations at any time.

Providing instruction to the Trustee of your Fund can mean your beneficiaries will receive payment faster.

Points to Consider:   

[Lapsing] Your nomination will need to be updated every three years to remain valid.

[Non-Lapsing] You will need to update your nomination if your circumstances or preferences change.

You must nominate a dependent (as defined by superannuation law) or your Legal Personal Representative for the nomination to be valid.

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[Non-binding] Non-Binding nominations mean the Trustee of your Fund has the discretion to pay to other dependents if they deem it appropriate.

The taxable component of your super may be subject to tax if paid to a non-dependant.

93. Make a Binding Death Nomination We recommend that you make a binding death benefit nomination for your superannuation. This nomination will be lapsing / non-lapsing.

Benefits:       

[Binding] A binding nomination, for an allowable dependant or your Estate, instructs the Trustee of the Fund to pay any proceeds according to your wishes.

[Non-lapsing] As long as your nomination remains current, a non-lapsing nomination means that you don’t need to update it every three years as it does not expire.

The proceeds of your retirement savings will be distributed according to your wishes on death.

Careful planning helps to manage tax implications of proceeds distributed.

Nominating your intentions can reduce disputes and costly legal intervention.

You can change your nominations at any time.

Providing instruction to the Trustee of your Fund can mean your beneficiaries will receive payment faster.

Points to Consider:     

[Lapsing] Your nomination will need to be updated every three years to remain valid.

[Non-Lapsing] You will need to update your nomination if your circumstances or preferences change.

You must nominate a dependent (as defined by superannuation law) or your Legal Personal Representative for the nomination to be valid.

[Non-binding] Non-Binding nominations mean the Trustee of your Fund has the discretion to pay to other dependents if they deem it appropriate.

The taxable component of your super may be subject to tax if paid to a non-dependant.

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94. Make Salary Sacrifice Superannuation Contributions We recommend that you contact your Employer to arrange for salary sacrifice contributions to be deducted from your salary / wage. We recommend an amount of $XXX each fortnight / month ($YYY p.a.). These contributions should be made to your XXX Fund / our recommended Super Fund.

Benefits:       

Adding more contributions to super will increase your savings for retirement.

These contributions will be made pre-tax and subject to a lower rate of tax in super of 15 / 30%. We estimate that you will pay $XXX less tax in the first year.

Your superannuation balance, after contributions tax, will increase by $XXX in the first year.

[Retirement] These contributions to super will help you achieve your retirement goal of <Retirement goal>.

We estimate your super balance to be $X at age XX. Your contributions will be invested in line with your investment risk profile.

Your Employer deducting these contributions from your salary / wage makes it easy to manage.

Points to Consider:           

Not all Employers offer this service, you need to check with them to make sure they can facilitate this arrangement.

Your cash available to spend will reduce by $XXX in the first year.

[Sufficient cash flow] A review of your lifestyle expenses has confirmed that you can afford this decrease in income.

[Under 75 super] As you are under age 75 you are eligible to make salary sacrifice contributions. Please refer to the Super Flyer for criteria.

A concessional contribution cap of $27,500 p.a. applies.

[Balance less than $500,000] As your balance is less than $500,000, you can carry forward unused concessional contributions for up to 5 years. This means that unused portions of your cap can be used in those future years.

Exceeding the concessional cap will result in additional tax payable.

You will not be able to access this money until you meet a condition of release such as retirement.

Salary / wage increases may result in exceeding the cap. Please contact our office so that we can amend the contribution to be deducted.

The Transfer Balance Cap for income streams means that only $1,700,000 can be transferred at retirement. The remaining balance will need to stay in super.

Some Employers recalculate Employer contributions and other benefits on the net amount of salary / wages after your salary sacrifice contributions. Please confirm the arrangement in writing with your Employer prior to commencing this strategy.

95. Make Changes to your Salary Sacrifice Contributions We recommend that you contact your Employer to amend your salary sacrifice contributions to be deducted from your salary / wage. We recommend a revised amount of $XXX each fortnight / month ($YYY p.a.). These contributions should be made to your XXX Fund / our recommended Super Fund.

Benefits:     

[Increase SS] The revised contribution will take advantage of your cash flow surplus and grow your retirement savings further.

You will have more funds available to meet your lifestyle expenses.

As these contributions will be made pre-tax and subject to a lower rate of tax in super of 15/30%, you will pay $XXX less tax in the first year.

[Increase SS] Your superannuation balance, after contributions tax, will increase by $XXX in the first year.

Making contributions to super will help you achieve your retirement goal of <Retirement goal>.

Points to Consider:     

[Increase SS] Your net cash flow will be reduced by $XXX in the first year.

[Sufficient cash flow] A review of your lifestyle expenses has confirmed that you can afford this reduction in income.

A concessional cap of $27,500 p.a. applies.

[Balance less than $500,000] As your balance is less than $500,000, you can carry forward unused concessional contributions for up to 5 years. This means that unused portions of your cap can be used in those future years.

Exceeding the concessional cap will result in additional tax payable.

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You will not be able to access this money until you meet a condition of release such as retirement.

Salary / wage increases may result in exceeding the cap. Please contact our office so that we can amend the contribution to be deducted.

The Transfer Balance cap for income streams means that only $1,700,000 can be transferred at retirement. The remaining balance will need to stay in super.

Some Employers recalculate Employer contributions and other benefits on the net amount of salary / wages after your salary sacrifice contributions. Please confirm the arrangement in writing with your Employer prior to commencing this strategy.

96. Make Concessional Superannuation Contributions We recommend that you make superannuation contributions of $XXX each fortnight / month ($YYY p.a.). These contributions should be made to your XXX Fund / our recommended Super Fund.

Benefits:   

As these contributions will be made pre-tax and subject to a lower rate of tax in super of 15/30%, we estimate that you will pay $XXX less tax in the first year.

Your superannuation balance, after contributions tax, will increase by $XXX in the first year.

[Retirement goal] Making contributions to super will help you achieve your retirement goal of <Retirement goal>.

Points to Consider: 

      

As you intend to claim a tax deduction for these contributions, you need to lodge a Notice of Intent to Claim a Tax Deduction form with your Super Fund. Strict criteria apply to the submission of this form and the timeframe requirements. Make sure you receive written confirmation from your Super Fund that the form has been received and is valid. Otherwise, you may not be able to claim a tax deduction.

Your net cash flow will be reduced by $XXX in the first year. A review of your lifestyle expenses has confirmed that you can afford this reduction in income.

You will not be able to access this money until you meet a condition of release such as retirement.

[Under 75super] As you are under age 75 you are eligible to make concessional contributions at any time.

A concessional cap of $27,500 p.a. applies.

[Balance less than $500,000] As your balance is less than $500,000, you can carry forward unused concessional contributions for up to 5 years. This means that unused portions of your cap can be used in those future years.

Exceeding the concessional cap will result in additional tax payable.

The Transfer Balance Cap for income streams means that only $1,700,000 can be transferred to an income stream at retirement. The remaining balance will need to stay in super.

97. Consolidate your Super Funds We recommend you consolidate your super funds into <Recommended Super Fund> Fund. [Contributions] Future SG and other contributions should also be directed to this Fund. [Death benefit nomination] We recommend you make a nonlapsing, binding death benefit nomination so that your Funds will be paid to your chosen dependents upon death.

Benefits:    

Your super will be easier to manage with just one account. This will help you to keep track of, and monitor, your retirement savings for the future.

[Reduced Fees] The cost of managing your retirement savings will reduce by $XXX in the first year. Our estimates show this could equate to $XXX savings by your planned retirement age of <Retirement age>.

Consolidating into one Fund will help you prepare for retirement strategies such as income streams.

Your funds will be invested in line with your investment risk profile.

Points to Consider:  

 

There is no guarantee that the investments in the Fund selected will outperform your previous Fund investments.

[Insurance lapse] The insurance of $XXX Life, $XXX TPD and / or $XXX Income Protection in your XXX Super Fund will lapse upon rollover. We have reviewed your cover and you are comfortable with the level of cover provided through <Recommended Super Fund> Fund.

There will be buy / sell costs payable on the rollover of Funds. A full analysis of replacement costs and comparison of Fund costs is provided later in this document.

[Employer contributions] You will need to notify your Employer of the new Fund details to move contributions to the <Recommended Super Fund> Fund.

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[Personal Contributions] Your personal contributions should be redirected to the <Recommended Super Fund> Fund.

The Transfer Balance cap for income streams means that only $1,700,000 can be transferred from super at retirement. The remaining balance will need to stay in super.

[Untaxed Component] Your existing Fund has an untaxed component which will be taxed at 15%. We estimate this tax payment to be $XX and it will be deducted from your fund prior to rollover.

[Exceed untaxed Plan Cap] As your untaxed portion is greater than the Untaxed Plan Cap, the amount exceeding this cap will be subject to a higher rate of tax at 45% plus Medicare. We estimate this to be $XX in addition to the standard 15% rate of tax estimate above.

98. Start a New Super Fund We recommend that you establish a Superannuation Fund. This will allow you to receive Employer contributions to the Fund / start your retirement savings / commence a concessionally taxed wealth creation strategy / pay for your insurance via superannuation.

Benefits:    

The Fund will be able to receive Employer (SG) contributions.

You can make personal contributions to the Fund.

Your insurance premiums can be paid via the Fund.

The investments will be in line with your investment risk profile.

Points to Consider:        

You will not be able to access this money until you meet a condition of release such as retirement.

[Under 75 super] As you are under age 75 you are eligible to contribute this money to super. Please refer to the Super Flyer for criteria. [over 75] Only mandated employer contributions or downsizer contributions can be made to your Super plan.

[NCC] The non-concessional contribution cap will apply to after-tax personal contributions. This is currently $110,000 in any one year and $330,000 utilising the 3-year bring forward rule.

[CC] A concessional cap of $27,500 p.a. will apply to pre-tax contributions.

[Balance less than $500,000] As your balance is less than $500,000, you can carry forward unused concessional contributions for up to 5 years. This means that unused portions of your cap can be used in those future years.

[CC] Exceeding the concessional cap will result in additional tax payable.

The Transfer Balance cap for income streams means that only $1,700,000 can be transferred at retirement. The remaining balance will need to stay in super.

99. Retain your Super Fund/s We recommend that you maintain your XXX Fund/s. It will continue to be invested in line with your investment risk profile.

Benefits:     

Your existing Fund continues to meet your retirement objectives.

Your existing Fund is cost-effective and has all the features that you require.

By retaining your existing Fund, you will not have to pay any transaction costs to rollover to a new Fund.

No capital gains will be crystallised.

You will be able to maintain your insurance which is cost-effective and appropriate for your needs.

Points to Consider:  

[Insurance] Your insurance cover will reduce with age. You may be underinsured if the cover reduces below your need for insurance.

Regular review of your Fund should be made to ensure it continues to meet your needs.

100. Review your Super Fund

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We have undertaken a review of your Super Fund/s and recommend no change to your current arrangements / you make the following changes:     

[Beneficiary] Make a selection to appoint a non-lapsing binding death benefit nomination.

[Rebalance] Rebalance your investment portfolio in line with your investment risk profile.

[Insurance] Undertake a review of your insurance cover.

Other Other

Benefits:    

Your super fund will reflect your current objectives for retirement.

[No change] Your Super Fund is invested according to your investment risk profile and has all the features you need.

[Profile Change] Your Super Fund will be more aligned to your investment risk profile.

[Insurance] You may apply for additional cover to help meet your insurance needs in the event of death, disability and illness.

Points to Consider:     

[Change] There will be transaction costs in the sell down and purchase of investments.

[Portfolio Change] There is no guarantee the recommended investments will outperform your existing investments. Returns are dependent on market conditions and Investment Manager expertise.

[Growth] The portfolio will have a higher allocation to growth investments which means your super will be subject to greater volatility.

[Cash / FI] The portfolio will have a high allocation to defensive assets such as cash and fixed interest which means there will be less opportunity for capital growth and higher returns over the long term.

[Insurance] Additional insurance means that you will pay more for this cover. These premiums will reduce the balance of your super account and the funds available to you in retirement.

101. Rollover your Super Fund/s We recommend that you rollover your Super Fund/s to the <Recommended Super Fund> Super Fund. The total value of $XXX will be transferred and invested in line with your investment risk profile.

Benefits:  

[Pre-retirement] Rolling over your super to <Recommended Super Fund>Fund will prepare your Funds for pension phase.

Overall fees will reduce to $XXX in the first year. A full analysis of replacement costs and comparison of Fund costs is provided later in this document.

Points to Consider:    

There is no guarantee the recommended Fund will outperform your existing Fund. Returns are dependent on market conditions.

There will be buy / sell costs payable on the rollover of Funds. These are estimated to be $XX. [Untaxed Component] Your existing Fund has an untaxed component which, on rollover, will be taxed at 15%.

The net amount will be transferred to XXX Fund.

The Transfer Balance cap for income streams means that only $1,700,000 can be transferred at retirement. The remaining balance will need to stay in super.

102. Rebalance your Super Fund Investment Portfolio We recommend that you rebalance your XXXX Super Fund investment portfolio in line with your investment risk profile.

We recommend that you sell down your holding of <Name of Funds / shares> and purchase <Name of Funds / Shares>. The difference in the buy and sell amounts will be sourced from / directed to your XXXX cash account. These changes to your portfolio take into consideration market research on the expected performance of these funds as well as the alignment to your investment risk profile.

Benefits: 

Your portfolio will be aligned to your investment risk profile.

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 

The recommended Funds / stocks are considered appropriate investments as outlined in our market research.

Making changes at each review allows you to take advantage of new market opportunities which may improve your returns and increase your wealth.

Points to Consider:     



<Insert reason for sell down of funds / stocks> <Insert reason for purchase of funds / stocks> There will be transactions costs in selling down and purchasing investments.

If you do not implement these recommendations, you run the risk of having your portfolio not aligned to your risk profile / having underperforming investments that may impact your retirement savings goals.

[Capital Gains] Selling down investments will trigger capital gains. We recommend that you seek tax advice to confirm the tax liability of the Fund; we estimate the capital gains tax to be $XXX. This will be paid within the Fund and is not a personal liability to you.

Whilst extensive research has been conducted, there is no guarantee that the new investments will outperform the old ones. [Ongoing service] We will review the allocation at your agreed ongoing review to adjust investments as required.

103. Withdraw your Superannuation We recommend that you withdraw part of your superannuation benefits. This will give you access to approximately $XXX so that you can pay down debt / pay for your holiday / buy your XXX / Other. The proceeds from your super should be directed to your XXX cash account.

Benefits:   

You will have the required funds for XXX. As you have now met a condition of release by retiring, you have access to your super.

[No tax withdrawal] As you are over 60 / have 100% tax-free super savings, you will not pay any tax on the withdrawal of your super money.

Points to Consider:    



 

[Partial] We have recommended that you redeem XXXX investment/s within your super portfolio as <insert reason for fund selection>.

[Tax on withdrawal – taxable component] As you are under 60, you will pay tax on the Taxable component of your super. We estimate the tax to be deducted from your withdrawal to be $XXX. [Untaxed element] As you have an untaxed component to your super, you will pay tax on this amount. We estimate the tax to be deducted from your withdrawal to be $XXX. [Untaxed element] You will need to include the untaxed amount of your withdrawal in your Tax Return. The Fund will provide you with a payment summary with the amount of untaxed element and the tax paid to help you complete this.

[Capital Gains] Selling down investments will trigger capital gains. We recommend that you seek tax advice to confirm the tax liability of the Fund; we estimate the capital gains tax to be $XXX. This will be paid within the Fund and is not a personal liability to include in your Tax Return.

[Transaction costs] There will be transactions costs in selling down and purchasing investments.

You will have less invested funds to meet your retirement savings goals.

104. Transfer your asset/s In-Specie to your Super Fund We recommend that you transfer XXX into your YYY Super Fund. Transferring in-specie allows you to keep the asset and changeover the ownership to within super. This will be treated as a non-concessional contribution with an estimated value of $XXX. Benefits:     

Not selling and re-purchasing avoids time out of the market.

There will be no buy / sell costs.

Adding XXX to your super will increase your retirement savings.

XXX will now be subject to concessional income tax at 15% and reduced capital gains tax (discount 1/3).

Some asset protection is provided against theft and fraud through Special Compensatory Schemes within super.

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Points to Consider:      

Your asset transfer will be treated as a non-concessional contribution to super and normal rules apply.

The current non-concessional contribution cap is $110,000, or $330,000 by using the bring-forward rule. The latter is essentially making three years contributions in the one year.

Any assets or money within super is preserved until you meet a condition of release such as retirement. This means you won’t be able to access or reclaim your asset until then.

The beneficial ownership of your asset will change upon transfer to your super. This will trigger stamp duty and capital gains tax. You should seek specialist tax advice to confirm what this liability is.

[SMSF] You need to ensure the addition of this investment fits within the Investment Strategy of your SMSF. Any changes to your Investment Strategy should be documented in meeting minutes.

[SMSF] There are rules that govern the purchase of assets from related parties within a SMSF. Please ensure that the transaction complies prior to completion.

105. Make a Non-Concessional Contribution and access Government Co-Contribution We recommend that you make an after-tax, non-concessional contribution of $XXX to your YYY Super Fund / the recommended Super Fund. This will be funded from your XXX bank account / cash account / XXX investment. Based on your income of $YYY, we estimate that you will be entitled to a government co-contribution of $ZZZ. Benefits:    

The government will contribute to your superannuation to promote super savings for low-income earners.

This will help you to grow your retirement savings for the future / to meet your retirement goal of XXX. We estimate that with earnings, you will have $XXX more in your superannuation within the first year.

After-tax, non-concessional contributions form part of the tax-free component of your Fund. This will be paid to you tax-free if you should require early access. It will also be passed to non-dependent adult children tax-free in the event of your death, reducing the tax they pay.

Points to Consider:     

Any assets or money within super is preserved until you meet a condition of release such as retirement. This means you won’t be able to access or reclaim your contributions until then.

The current non-concessional contribution cap is $110,000, or $330,000 by using the bring-forward rule. The latter is essentially making three years contributions in the one year.

Government policy is subject to change and rates of co-contribution may change as a result.

The co-contribution will be calculated from your Tax Return at the end of the financial year. It will then be paid directly to your nominated Fund.

[Under 75 super] As you are under age 75 you are eligible to contribute this money to super. Please refer to the Super Flyer for criteria.

106. Cease your Transition to Retirement Income Stream <with salary sacrifice> We recommend that you cease your transition to retirement income stream (transition to retirement income stream) by rolling $XXX from your <transition to retirement income stream> Pension to your <Name Super> Super Fund. We recommend that you continue / cease your salary sacrifice of $XXX per fortnight / month to your <Name Super> Super Fund.

Benefits:   

Your retirement savings will grow further by stopping your income withdrawal from the transition to retirement income stream account.

[Continue Salary sacrifice] Salary sacrifice contributions are tax effective as your marginal tax rate is XX% and superannuation is charged at a rate of 15 / 30%.

We estimate this strategy will give you a balance at retirement of $XXX. This will meet / will help to meet your retirement goal to <retirement goal>. Please refer to the financial projections at the end of this document for further explanation of these estimates.

Points to Consider: 

You will not be able to access this money until you meet a condition of release such as retirement.

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Recent changes to legislation relating to transition to retirement income streams mean earnings in the pension are no longer tax free. They are now taxed at the super tax rate of 15%. As a result, transition to retirement income stream s are less tax-effectively.

[Continue Salary Sacrifice] A concessional cap of $27,500 p.a. applies to concessional contributions such as salary sacrifice. [Balance less than $500,000] As your balance is less than $500,000, you can carry forward unused concessional contributions for up to 5 years.

[Continue Salary Sacrifice] Exceeding the concessional cap will result in additional tax payable.

[Continue Salary Sacrifice] Salary / wage increases may result in exceeding the cap. Please contact our office so that we can amend the contribution to be deducted.

The Transfer Balance cap for income streams means that only $1,700,000 can be transferred at retirement. The remaining balance will need to stay in super.

107. Split your Contributions with Spouse name We recommend that you split your contributions of $XXX from last financial year to <spouse name>’s <spouse Fund name> Super Fund. [Ongoing] We recommend that you do this each year until retirement.

[Split for withdrawal/rollover] We recommend that you split your contributions of $XXX from this financial year to <spouse name>’s <spouse Fund name> Super Fund.

Benefits:    

By splitting your superannuation contributions across two accounts, you can manage your transfer balance cap in the lead up to retirement. This may reduce tax payable in retirement.

Making contributions to your spouse’s super will help them save for retirement.

[Spouse older] As your spouse is older than you, moving money into their super may give you earlier access at lower tax rates.

[Spouse younger] As your spouse is younger, their superannuation is not yet assessable for means testing of the Centrelink Age Pension. This may result in a higher pension payment for you.

Points to Consider:  

    

     

Concessional contributions will be subject to contributions tax at 15 / 30% upon receipt in your <Spouse name>’s super account.

As you intend to claim a tax deduction for these contributions, you need to lodge a Notice of Intent to Claim a Tax Deduction form prior to splitting the contribution. Strict criteria apply to the submission of this form and the timeframe requirements. Make sure you receive written confirmation from your Super Fund that the form has been received and is valid. Otherwise, you may not be able to claim a tax deduction.

Only Employer, salary sacrifice and personal deductible contributions can be split with your spouse.

Your spouse must be under 65 and not retired to accept these contributions.

[Withdrawal / rollover split] Your <Client Fund name> Fund should be notified prior to the withdrawal / rollover being processed.

Not all Funds accept contribution splitting. You need to make sure this is allowed in your Fund. There may be costs associated with processing these transactions.

You are only allowed one split request per annum. You must submit the Form to apply by 30 June in the year following the contribution. Unless you are withdrawing or rolling over, then you need to notify the Fund at the time of withdrawal or rollover.

You will not be able to access this money until you meet a condition of release such as retirement.

[Under 75super] As you are under age 75 you are eligible to contribute to Super. Please refer to the Super Flyer for criteria.

A concessional cap applies to contribution splitting. Please refer to the Superannuation Strategy Flyer for current limits.

[Balance less than $500,000] As your balance is less than $500,000, you can carry forward unused concessional contributions for up to 5 years.

Exceeding the concessional cap will result in additional tax payable.

The Transfer Balance cap for income streams means that only $1,700,000 can be transferred at retirement. The remaining balance will need to stay in super.

108. Make a Non-Concessional Contribution

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We recommend that you make an after-tax, non-concessional contribution of $XXX each / this financial year, to your YYY Super Fund / the recommended Super Fund. This will be funded from your XXX bank account / cash account / XXX investment.

Benefits:      

This will help you to grow your retirement savings for the future / to meet your retirement goal of XXX. We estimate that with earnings, you will have $XXX more in your superannuation within the first year.

Your contributions will be invested in line with your investment risk profile.

After-tax, non-concessional contributions form part of the tax-free component of your Fund. This will be paid to you tax-free upon meeting a condition of release.

Benefits will be paid tax-free to beneficiaries such as your adult children, in the event of your death.

[Pension pre-60] These contributions will reduce tax payable on pension payments you receive prior to age 60.

Points to Consider:        

You will not be able to access this money until you meet a condition of release such as retirement.

The current non-concessional contribution cap is $110,000 per annum. Contributions that exceed the cap may be subject to additional tax. Please contact our office before making additional contributions.

You can trigger the bring-forward rule which allows you to make three years’ worth of contributions ($330,000) in one year.

[Trigger bring-forward] This recommendation will trigger the bring-forward rule. You only have an additional $XXX that you can contribute before <enter date trigger period ends>.

You will have less funds available in your XXX bank account / cash account / XXX investment.

[Under 75 super] As you are under age 75 you are eligible to contribute to Super. Please refer to the Super Flyer for criteria.

Superannuation in an accumulation account is subject to market performance. The value of your super savings will rise and fall with the markets you are invested in.

If your balance exceeds the Transfer Balance Cap of $1.7 million in the future, you will not be able to make any further non-concessional contributions to super.

109. Make a Spouse contribution to Superannuation We recommend that you make a spouse contribution of $XXX to your YYY Superannuation Fund. This will be funded from your XXX bank account / cash account / XXX investment. We estimate that you will receive a tax offset of $540 / $XXX for this contribution in your Tax Return.

Benefits:   

Spouse contributions are treated as non-concessional contributions for tax purposes and therefore attract tax – free status on withdrawal and when paid to beneficiaries upon death.

This will help you to grow your spouse’s retirement savings for the future / to meet their retirement goal of XXX. We estimate that with earnings, your spouse will have $XXX more in their superannuation within the first year.

Points to Consider:       

You are unable to claim a tax deduction for spouse contributions. The contribution needs to be a nonconcessional, after-tax contribution.

Your spouse’s income must be below $40,000 to qualify for a partial tax offset and $37,000 to receive the maximum tax offset of $540 each year.

You will have less funds available in your XXX bank account / cash account / XXX investment.

Any assets or money within super is preserved until you meet a condition of release such as retirement. This means your spouse won’t be able to access or reclaim contributions until then.

The current non-concessional contribution cap is $110,000, or $330,000 by using the bring-forward rule. The latter is essentially making three years contributions in the one year.

You must both be Australian residents and living together at the time of the contribution.

For 2017–18 and later income years, your spouse cannot exceed their non-concessional contributions cap for the relevant year or have a total superannuation balance equal to or exceeding the transfer balance cap immediately before the start of the financial year in which the contribution was made (the general transfer balance cap for 2021-22 is $1.7 million).

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110. Make a Non-Concessional Contribution with the Proceeds of your Business Sale We recommend that you make a non-concessional contribution of $XXX to your YYY Superannuation Fund. As this is the sale proceeds from your business, you can use the small business provisions for making additional contributions to super.

Benefits: 

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[15-year exemption] As you have held your business asset for 15 or more years, you will not have a capital gains tax liability to pay and the full amount of $XXX can be contributed to super without impacting the nonconcessional cap.

[Retirement exemption] You will receive a capital gains tax exemption for up to $500,000 transferred into superannuation from your sale proceeds. You may still have capital gains tax to pay on the balance. Please seek specialist tax advice for more details.

This contribution will form part of your tax-free component. This means that it will be tax-free on withdrawal, it will form the tax-free component of any pension payments and it will be received tax-free by beneficiaries upon death.

Superannuation is not means tested for Centrelink payments until you reach age pension age.

Points to Consider:   

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[Under 75 super] As you are under age 75 you are eligible to contribute to Super. Please refer to the Super Flyer for criteria.

You will not be able to access this money until you meet a condition of release such as retirement.

[15-year exemption] The limit for the 15-year CGT exemption is $1,650,000. Any contributions in excess of this will count towards your non-concessional contribution cap. Normal rules apply and excess contributions may be withdrawn or they will be taxed at the highest marginal tax rate.

[Retirement exemption] The limit for the retirement exemption is $500,000. Any contributions in excess of this will count towards your non-concessional contribution cap. Normal rules apply and excess contributions may be withdrawn or they will be taxed at the highest marginal tax rate.

Non-concessional contributions can only be made if the super balance is less than $1,700,000.

Due to the complexities in these options and further considerations around your business, we strongly recommend you seek specialist tax advice prior to acting on this advice.

111. Invest in a Portfolio via a Managed Discretionary Account (MDA) We recommend you invest in a portfolio of direct shares, via an MDA, as part of your wealth creation strategy. We recommend use of funds from your cash / investment account to fund the purchase of this portfolio. Details of actual share purchases are provided in the next section of this SoA. Benefits:          

MDAs allow us to create and manage a portfolio of stocks that align with your investment risk profile and personal wealth objectives.

MDAs provide timely reporting as well as access to investment research and market insights through the online portal.

As your portfolio is designed specifically for you, we have flexibility in managing your dividends, tax payments and capital gains.

By granting us a dealing authorisation, we can trade, acquire and dispose of investments on your behalf to keep your portfolio aligned to your investment objectives.

Having direct control over the stocks within your portfolio allows us to time or stagger investment decisions in response to market conditions.

Investing in direct shares will provide diversity to your overall investment portfolio.

Australian share dividend income is tax-effective where franking credits are provided.

You have the option to reinvest your dividend income back into your shares, reducing transactions costs as well as investing for further capital growth.

Holding shares directly provides flexibility as you can sell a selection of individual shares as needed. It also provides flexibility to manage capital gains tax on the sell down of your portfolio.

Corporate actions can take place swiftly on your behalf.

Points to Consider:   

Investing directly into shares increases your exposure to market volatility.

Capital growth and dividend payments are not guaranteed.

Negative returns are likely where the value of your portfolio falls to less than what you start with.

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It is best to have a long-term outlook for the ownership of direct shares; this may help to smooth out the impact of market volatility on your share portfolio performance.

MDAs charge administration fees for the operation of your account.

Brokerage of $XXX will be payable for the purchase of your share portfolio. Any further buys and sells within your portfolio will be subject to brokerage also at a rate of $XX / XX% per trade.

Diversification across companies and markets is harder to achieve when building a portfolio of direct shares.

Managed funds provide more diversification at a lower level of investment.

Capital gains tax may be payable on the sale of shares. Please seek professional tax advice before selling any shares.

112. Re-contribute your COVID-19 Early Release of Super We recommend you make an after-tax, non-concessional contribution of $XXX each / this financial year, to your YYY Super Fund / the recommended Super Fund. This will be funded from your XXX bank account / cash account / XXX investment.

This contribution is to redirect money back to super after your withdrawal of $XX under the ‘Early Release of Super – COVID-19” provisions.

Benefits:       

You can make this contribution without impacting your non-concessional contribution cap.

This will help you to grow your retirement savings for the future / to meet your retirement goal of XXX. We estimate that with earnings, you will have $XXX more in your superannuation within the first year.

Your contributions will be invested in line with your investment risk profile.

After-tax, non-concessional contributions form part of the tax-free component of your Fund. This will be paid to you tax-free upon meeting a condition of release.

Benefits will be paid tax-free to beneficiaries such as your adult children, in the event of your death.

[Pension pre-60] These contributions will reduce tax payable on pension payments you receive prior to age 60.

Points to Consider:    

   

You will not be able to access this money until you meet a condition of release such as retirement.

You must complete the Notice of re-contribution of COVID-19 early release amount (NAT 75394) form if you are close to the cap. If you are not close to the cap, there is no need to submit the form.

The current non-concessional contribution cap is $110,000 per annum. Contributions that exceed the cap may be subject to additional tax.

Although it won’t count towards your cap, it will towards your Total Super Balance as determined on 30 June, and also towards your Transfer Balance Cap. This may impact how much you can transfer to a tax-free pension in retirement.

You will have less funds available in your XXX bank account / cash account / XXX investment.

[Under 75 super] As you are under age 75 you are eligible to contribute to Super. Please refer to the Super Flyer for criteria.

Superannuation in an accumulation account is subject to market performance. The value of your super savings will rise and fall with the markets you are invested in.

If your balance exceeds the Transfer Balance Cap of $1.7 million in the future, you will not be able to make any further non-concessional contributions to super.

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