Financial Checklist: 5 things to reflect on in 2017

 In News

There are a raft of legislative and market changes either been recently implemented or about to come into effect that are set to change your personal financial planning landscape. We have 5 significant matters to carefully reflect upon for 2017 before taking your next steps.

 

  1. Super changes:

Earlier this month we sent out a newsletter outlining our governments’ superannuation changes that will be implement as of 1st July 2017. We have broken it down even further to see what it means to you.

Those under 55:

  • Take advantage of the tax benefits by contributing to Super earlier. Don’t wait as it’s getting harder to catch up.

Those 55-60:

  • Those with Transition to Retirement (TTR or TRIS) pensions will become taxed up to 15% unless permanently retired.
  • Legislation has passed that provides CGT Relief for gains that will be realised due to the introduction of the $1.6 million transfer cap and loss of exemption on earnings for TTR pensions. Action must be taken prior to 1 July 2017 to obtain the CGT concessions.

Those 60-65:

  • Those with Transition to Retirement pensions (and still working) will now become taxed up to 15% unless a condition of release has been met in order to retain the current tax free benefits.
  • Those preparing for Retirement take advantage of the last chance to boost your Super balances in a very tax effective manner again before the rules reduce what can be added from other sources-sale of a property or legacy etc.
  • Legislation has passed that provides CGT Relief for gains that will be realised due to the introduction of the $1.6 million transfer cap and loss of exemption on earnings for TTR pensions. Action must be taken prior to 1 July 2017 to obtain the CGT concessions.

Those in Retirement:

  • Whether you have retail funds or a SMSF and your balance is $1.6 million or greater are recommended to seek advice as soon as possible. The changes also impact those on Defined Benefit pensions of $100k or above.

Our Financial Advice team is busy working through all of the implications of these significant reforms on all clients and will be in contact in the New Year to arrange time to review the impact on your overall strategy.

 

  1. Interest Rates:

Fixed rates are on the rise, longer term interest rates have moved up by 50bps over the last 5 weeks. Baring this in mind it becomes a no brainer why you wouldn’t consider reviewing and fixing either all or part of your loans.

Fixed Interest rates are currently comparable to variable interest rates so why not get some certainty in your repayment for the next 3-5 years? In an increasing rate environment, Variable Interest rates are likely to increase, by fixing your interest rate you will most likely end up in front over the duration.

If you wish to have the best of both the Fixed and Variable rates then you can split your loan and enjoy a part fixed and part variable facility at the best interest rates on the market.

Advisors at MW Lomax can review and provide a financial health check on your home and Investment loans and can recommended what’s best suited for you.

 

  1. Centrelink changes:

Asset test changes apply as of January 1st 2017 and may significantly impact age pension eligibility. Many will get reduced benefits and many will lose valuable income – those impacted will be getting letters now.

 

  1. Investment review:

There are significant elections in Holland, France and Germany. Given the results for Brexit and the USA – markets will be volatile. It will be important to watch what Trump tries to achieve in his first 100 days. More uncertainty and volatility are probably the most reliable forecasts to make at this stage. For the first time in US history, the President will be someone with no experience in governing or leading the military. Time will tell whether this proves to be a good or a bad development. Please be warned and also prepared. Ensure you have a portfolio review this year.

If any or all of the above impact you please ensure you contact your Financial Advisor to review your long term strategy.

 

  1. Life cover:

You may have peace of mind knowing you already have life insurance to protect your family when you aren’t there but without regular review, these insurances can fall short when they are needed the most. Life changes all the time and so should your life insurance.

To make sure your cover is up to date, contact an MW Lomax insurance specialist to review your current cover and ensure you are properly protected.

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