S & H Tax Accountants

Category: Personal Finance

  • Finding the right fit: How to choose the right financial planner for you

    Finding the right fit: How to choose the right financial planner for you

    No matter what your financial goals are, consulting with a financial planner can help just about everybody. Not only will they help you refine your goals, they’ll guide you in creating strategies for your money, and keep you accountable to your plan. They’ll also help you navigate different saving and investment strategies, so you know your money is working for you.

    They’ll also make sure you have the information you need to make the best financial decisions for your circumstances, so you can grow your wealth and increase your financial security.

    If you’re looking for a financial planner, these tips can help you find the best person to meet your unique needs.

    Be clear about your goals

    Most people’s big financial goals fall into the following areas:

    • Retirement
    • Buying a home
    • Paying for higher education (for themselves or their children)

    But along the way a lot of other events come up that pull our financial focus, such as buying a car, paying for a trip, or covering expensive home repairs. Whether your goal is to build up your emergency savings account, pay for the trip of a lifetime, or fund your retirement, a financial planner can help you allocate your money wisely.

    Before you start searching for a financial planner, list your financial goals, long-term and short-term. That will give you the framework for finding someone whose expertise matches your objectives.

    Check their qualifications

    There’s no shortage of financial planners out there to choose from – but not every planner is licensed, or has the right credentials, training, or experience to meet your needs.

    With your goals in mind, start researching financial planners in your area who hold relevant professional designations and appropriate qualifications. Check online to see if there’s a complaint record against them, or information that doesn’t match the claims they make. Where you find the complaint record may depend on the government body that oversees their work.

    Ask your friends and family for referrals – ideally people you trust who are in the same stage of life as you are. Visit each financial planner’s website and look for testimonials from people whose circumstances are similar to yours. Double check with the appropriate certifying body that they have the required qualifications.

    Ask questions

    Make a list of candidates and interview at least three financial planners. When you do, ask what qualifications they have, what their approach is, what services they include, and how they can help you achieve your goals.

    Additionally, inquire about

    • what products they offer (and make sure they have the proper certifications to sell them),
    • how they’ll keep you informed,
    • how they decide on appropriate investments or strategies for their clients,
    • whether they’ve ever been disciplined by a regulator (again, you can often verify their answer to this last question online), and
    • how they’ve helped clients in situations similar to yours.

    Find out their payment structure

    Financial planners may charge you for services in a variety of ways, including:

    • An hourly fee
    • A fee based on the value of your assets under their management
    • A commission or trading fee based on buying stock or investments for you
    • A salary from their employer (such as those who work through banks)
    • Statement of Advice fee — A one-off fee for preparing your Statement of Advice. This fee is either paid up-front and deducted from your investments, or added to ongoing fees for service.

    You need to know how they’re paid and what they charge so you can determine if their advice is in any way influenced by outside factors.

    Final thoughts

    Whether you’re looking for help with investment planning, estate planning, retirement planning or other financial guidance, choosing the right financial planner is key to you taking control of your finances. You want someone who understands your financial goals, is experienced in the areas you want guidance, and who you feel comfortable talking openly with. S & H Accountants are the one for you, we offer financial and tax planning, as one of our services. Contact us today to book a consultation with one of our experienced staff members. Call us on 03 8759 5532 or you can email us on info@sahtax.com.au.

  • Proactive superannuation planning: what you need to be aware of before June 30

    As a small business owner, juggling multiple responsibilities is the norm. With June 30 fast approaching, understanding superannuation can save you a lot of headaches and potentially a lot of money. Let’s dive into the key aspects of superannuation you need to be aware of before the end of the financial year.

    Annual contribution limits for superannuation

    Concessional Contributions

    Concessional contributions are pre-tax contributions such as employer contributions and salary-sacrificed amounts. For the 2024 financial year, the concessional contribution cap stands at $27,500 per individual. This cap will increase to $30,000 from July 1, 2024.

    Key Points:

    • Employer Contribution Rate: Currently at 11% for the 2024 financial year, increasing to 11.5% from July 1, 2024.
    • Catch-Up Contributions: If your total superannuation balance is below $500,000, you can use up to five years’ worth of unused concessional contribution caps. This is particularly significant if you have caps from the 2019 financial year that expire soon.
    • Maximisation Methods: Consider salary sacrificing or making personal concessional contributions. Both methods can help you maximise your superannuation contributions before the end of the financial year.

    Non-Concessional Contributions

    Non-concessional contributions are after-tax contributions. The annual cap for these contributions is $110,000 for the 2024 financial year, increasing to $120,000 from July 1, 2024.

    Important Considerations:

    • Individuals aged 75 and over generally cannot make non-concessional contributions unless they are mandated contributions.
    • If your total superannuation balance is $1.9 million or higher, you are not permitted to make non-concessional contributions.

    Contribution strategies prior to June 30, 2024

    For Employers

    Ensure that all superannuation guarantee contributions for your employees are made before June 30 to qualify for a tax deduction in this financial year.

    For Individuals

    If you’re planning to claim a tax deduction for personal superannuation contributions, you must lodge an “Intent to Claim a Superannuation Deduction” form with your super fund and receive an acknowledgment back from them.

    Superannuation Guarantee changes

    Starting from July 1, 2024, the superannuation guarantee contribution rate will increase from 11% to 11.5%. This means that from the next financial year onward, employers will need to contribute more to their employees’ superannuation funds.

    Minimum Pension requirements

    If you’re drawing a pension from your superannuation, make sure the minimum pension payment has been withdrawn for the financial year before June 30. Failing to do so could mean that your pension is deemed to have stopped, which could have significant implications.

    Non-arm’s length income and expenses

    Be mindful of any non-arm’s length income and expenses, as they can attract a higher tax rate. Ensure all transactions involving your superannuation fund are conducted at market value to avoid penalties.

    Safe harbour interest rate rises for related-party LRBA loans

    If your superannuation fund has a limited recourse borrowing arrangement (LRBA) with a related party, note that safe harbour interest rates have risen. It’s crucial to update the terms of your loan to ensure compliance with ATO guidelines.

    Reduced GST input credits for advice fees in Superannuation

    Effective from the new financial year, GST input credits for certain advice fees in superannuation will be reduced. Plan accordingly to manage your expenses and tax liabilities.

    Final Tips and Actionable Advice

    Review and adjust contributions

    Take a close look at your current contributions and make any necessary adjustments to maximise your tax benefits. Be proactive in planning your contributions for the next financial year as well.

    Keep an eye on changes

    Stay updated on legislative changes affecting superannuation. The rules can change frequently, and being aware of these changes can help you make informed decisions.

    Consult with professionals

    Seek advice from financial advisors or accountants specialised in superannuation to ensure you’re making the most of your contributions and complying with all regulations.

    Don’t delay

    Procrastination can cost you. Make any necessary contributions and adjustments well before the June 30 deadline to avoid any last-minute stress or errors.

    Superannuation is a vital component of financial planning for both individuals and businesses. Understanding the various contribution limits, strategies, and regulatory changes can help you optimise your superannuation before June 30. By staying informed and proactive, you can ensure your superannuation strategy aligns with your financial goals.

    The end of the financial year is a critical time for superannuation planning, so don’t wait – start now!