IFA Awards for Excellence – August 2014

Superannuation vs. Age Pension

Superannuation vs. Age Pension: What’s the Difference? 

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As you approach retirement, understanding the differences between superannuation and the Age Pension becomes vital for your financial planning. These are two primary sources of income for Australian retirees, but they function very differently. At LIFE Financial Planners, based here in Perth, we often guide clients through these complexities to help them make informed decisions about their future. 

Superannuation vs Age Pension

Superannuation is a savings plan you contribute to during your working life. Both you and your employer make contributions, which are then invested to grow your nest egg. Once you reach your preservation age (usually around 60), you can start accessing your super. Superannuation gives you flexibility—you control when and how much you withdraw. Additionally, the remaining balance stays invested, allowing it to potentially grow even while you draw from it. This makes superannuation a powerful tool for maintaining your lifestyle throughout retirement. 

In contrast, the Age Pension is provided by the government as a safety net for retirees who may not have sufficient super or savings. Available from age 67 (subject to income and assets tests), the Age Pension provides a fixed, fortnightly payment with no option for lump-sum withdrawals. It’s a valuable support for many, but it’s typically not enough to cover all living expenses, especially for those looking to maintain a more comfortable lifestyle. Additionally, Age Pension payments are taxable, although many retirees can receive tax offsets to minimise or eliminate their tax burden. 

One of the main differences between these two income streams is flexibility. With superannuation, you decide how much to withdraw, and your funds remain invested, continuing to generate returns. Meanwhile, the Age Pension provides set payments with no investment growth potential. Many retirees rely on a combination of both superannuation and the Age Pension to meet their financial needs, but it’s important to understand that superannuation is generally designed to be your primary source of income, while the Age Pension serves as a supplementary safety net. 

When it comes to taxation, superannuation withdrawals after the age of 60 are generally tax-free, making it a highly efficient way to fund your retirement. In contrast, the Age Pension counts as taxable income, although many retirees are eligible for tax credits that may reduce or eliminate any tax owed. 

Superannuation and Age Pension: Working Together 

Many Australians use a combination of both superannuation and the Age Pension to fund their retirement. How much you’ll rely on each depends on your savings, investment returns, and eligibility for the Age Pension. Our role as your financial planners is to help you strike the right balance between these two income sources, ensuring you can enjoy a secure and comfortable retirement. 

Here in Perth, living costs, lifestyle choices, and the availability of services can also impact your retirement strategy. With our expertise in retirement planning, we can help you develop a plan that maximises your superannuation and, if eligible, supplements it with the Age Pension. 

Common Misconceptions 

  1. “The Age Pension will be enough.” 

While the Age Pension provides a basic level of income, it’s generally not enough to support the kind of lifestyle most retirees desire. That’s where superannuation comes in – to provide more flexibility and financial security. 

  1. “I don’t need to worry about super if I qualify for the Age Pension.” 

Even if you’re eligible for the Age Pension, having super gives you control over your retirement income. It allows you to live more comfortably and avoid solely relying on government support. 

  1. “I’ll get both my super and the full-age pension.” 

It’s important to understand that your super and other assets may reduce your Age Pension payments. Our job is to guide you through these complexities, helping you manage both your superannuation and your potential Age Pension entitlements effectively. 

Let’s Plan for Your Retirement 

Whether you’re wondering how to make the most of your super or whether you’ll qualify for the Age Pension, at LIFE Financial Planners, we’re here to help you navigate your options. Our team in Perth is dedicated to crafting retirement strategies tailored to your individual circumstances, ensuring you get the most out of your savings. 

Contact us today to start planning your retirement, and let’s work together to secure the lifestyle you deserve.

If you’d like more useful information click here.

https://www.servicesaustralia.gov.au/superannuation?context=22526 https://www.superannuation.asn.au/ https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/BriefingBook46p/RetirementIncomes https://superfundlookup.gov.au/ https://nationalseniors.com.au/news/finance/superannuation-funds-vs-age-pension

The 4% rule for retirement

The 4% Rule for Retirement Withdrawals: Is It Relevant for Australians? 

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When planning for retirement, many financial experts reference the 4% Rule – a popular guideline for determining how much you can safely withdraw from your retirement savings. But does this rule work for Australians, especially those living here in Perth? Let’s dive into what the 4% Rule is, how it applies in an Australian context, and what factors you should consider when planning your retirement. 

What Is the 4% Rule for Retirement? 

The 4% Rule suggests that you can withdraw 4% of your retirement savings each year, adjusting for inflation, and your savings should last for around 30 years. This rule, developed in the U.S., was based on historical stock and bond returns, and it assumes a balanced investment portfolio. 

For example, if you’ve saved $800,000 for retirement, the 4% Rule would allow you to withdraw $32,000 annually. Adjustments would be made each year to account for inflation, ensuring your purchasing power remains consistent. 

But is this approach suitable for Australians, particularly those planning their retirement in Perth? 

How Does the 4% Rule Apply in Australia? 

While the 4% Rule can serve as a helpful starting point, there are key differences in how Australians approach retirement that may impact its relevance: 

  1. Superannuation

In Australia, superannuation (super) plays a significant role in retirement planning. Unlike in the U.S., where the 4% Rule was developed for self-funded retirement savings, many Australians rely on their super as a primary source of income. The 4% Rule could be used to determine withdrawals from your super, but it’s essential to consider how your super will be invested and the tax benefits that come with it. 

  1. Tax-free Retirement Income

Australians over the age of 60 can enjoy tax-free income from their superannuation, assuming it’s in the pension phase. This makes the 4% Rule more flexible here than in other countries. For some retirees, the tax-free status could mean they’re able to withdraw slightly more than 4% without significantly impacting the longevity of their savings. 

  1. Cost of Living in Perth

When applying the 4% Rule, it’s crucial to account for the cost of living in Perth. While Perth may be more affordable than Sydney or Melbourne, rising housing prices, health care costs, and lifestyle expectations will still affect how much you’ll need in retirement. Our role as your financial planner is to tailor your retirement strategy to reflect your unique circumstances here in Perth, ensuring the 4% Rule (or any strategy) suits your needs. 

Key Considerations for Australians Using the 4% Rule 

  1. Investment Market Performance

The 4% Rule was based on U.S. market performance over the last century. Australian market performance can differ due to economic conditions, interest rates, and other factors. While diversified investments can help manage risks, it’s important to review your portfolio regularly to ensure your withdrawal rate remains sustainable. 

  1. Longevity and Health Care Costs

Australians are living longer, which is great, but it means you’ll likely need your retirement savings to last even longer. Health care costs also rise as we age, making it essential to factor in medical expenses, private health insurance, and potential aged care fees. 

  1. Adjusting for Inflation

Australia’s inflation rates may differ from historical U.S. averages. While the 4% Rule accounts for inflation, it’s important to review and adjust your strategy as inflation changes to protect your purchasing power. 

  1. Lifestyle and Legacy

Your personal retirement goals matter. Whether you’re planning to travel, downsize your home, or leave a legacy for your family, these factors should influence your withdrawal strategy. Sticking rigidly to the 4% Rule without considering your specific needs may not be the best approach. 

Is the 4% Rule Right for You? 

Whether you stick to the 4% Rule or adjust it based on your personal circumstances, having a plan in place is essential. Retirement is an exciting chapter of life, but it requires careful financial planning to make sure you can live comfortably and securely. 

If you’d like to discuss how the 4% Rule can fit into your retirement strategy, or if you have questions about maximising your superannuation, reach out to us today. 

How We Can Help with Your Retirement Planning 

At LIFE Financial Planners, we understand that retirement planning isn’t one-size-fits-all. The 4% Rule is a useful guide, but the key to a successful retirement is personalisation. We work closely with clients in Perth to develop tailored retirement plans that consider your superannuation strategy, lifestyle goals and asset portfolio. 

Our goal is to create a retirement plan that ensures your income lasts throughout retirement while allowing you to enjoy the lifestyle you’ve worked hard to achieve. Contact us today at our West Perth office (08) 9322 1882 to start building a retirement strategy that works for you and your future. 

How Much Should You Save for Retirement?

How Much Should You Save for Retirement?

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The path to retirement is no simple task it requires thought, planning, and a guided understanding of the many options and strategies available to you. At Life Financial Planners, based in Perth, we recognise that everyone’s journey to retirement is unique. With decades of financial expertise, our team has put together an introductory guide to planning your retirement and answering the age-old question “How Much Should You Save for Retirement?”.

 

Understanding Your Ideal Retirement Lifestyle: 

 

Retirement isn’t a one-size-fits-all concept; it’s a bespoke experience crafted around your unique aspirations. While general guidelines suggest aiming for approximately 67% of your current annual income to maintain your lifestyle in retirement, the specifics depend on the dreams you harbour for this new chapter.  

 

Modest, Comfortable, or Age Pension: Deciphering the Differences: 

 

Distinguishing between a modest and comfortable retirement lifestyle involves understanding the financial nuances. ASFA‘s Retirement Standard provides valuable insights, suggesting that a couple aspiring to a comfortable lifestyle will require $70,806 annually, while those aiming for modest living should budget $45,946. Your retirement budget should align with your priorities and aspirations, whether it’s travel, hobbies, or maintaining a certain standard of living. 

 

Knowing Where Your Money Goes: 

 

Evaluate your current spending habits to identify your ‘minimum lifestyle requirements.’ Consider factors like from everyday costs to potential mortgage or rent payments during retirement. Understanding your minimum lifestyle requirements lays the foundation for a strategic and sustainable retirement plan. 

 

Deciding Your Retirement Timeline: 

 

The journey to retirement isn’t just about reaching a financial goal; it’s also about when you embark on this new phase of life—the correlation between your retirement timeline and your financial landscape. The earlier you start saving, the more you can maximise your resources, shaping a retirement that aligns with your dreams. 

 

Maintaining Your Current Lifestyle:

Retirement offers an opportunity to reassess your current lifestyle. While it’s essential to maintain your lifestyle if affordable and enjoyable, this phase allows for a meaningful shake-up. Reflect on spending choices, prioritise what truly matters, and use your newfound freedom to focus on meaningful experiences and relationships. 

 

Living on Less Income After Retirement:

Understanding why you can live on 33% less income in retirement involves factors like mortgage payoff, senior discounts, tax-free income from super, and eligibility for the Age Pension. While personal wealth and choices play a role, for the majority of Australians, these figures hold true, allowing for a comfortable retirement on a reduced income. 

 

Funding Your Retirement: Strategies for Financial Freedom: 

 

We explore various avenues to fund your retirement nest egg. From superannuation, investments, and assets to the age pension, this section provides a holistic view of the financial tools at your disposal. 

 

Handling Inflation Impact:

Inflation’s impact on retirement savings can be significant. To combat its effects, consider holding a diversified portfolio, including equities, real estate investments, or international bonds. A professional retirement planner can assist in devising a strategy to navigate inflation’s challenges effectively. 

 

How Much Super Is Enough to Retire:

Guidelines like the Two-Thirds Rule suggest aiming for around two-thirds of your current income annually to maintain your lifestyle in retirement. ASFA estimates a couple needing $690,000 in their super fund for a comfortable retirement at age 67. Tailor your retirement savings target using super projection calculators and consider various variables like homeownership, marital status, and desired lifestyle. 

 

How to Spend Your Retirement Funds: 

 

Implement a sustainable withdrawal strategy to ensure your retirement funds last. Explore methods like fixed percentage withdrawals, the 4% rule, fixed dollar withdrawals, bucket strategies, market-based approaches, and custom approaches tailored to your portfolio, goals, and personal circumstances. 

 

Securing a Fulfilling Retirement with Life Financial Planners: 

With a commitment to ensuring your retirement is not just financially secure but fulfilling, we at Life Financial Planners in Perth are dedicated to helping you retire in the best financial position possible. If you’re ready to take the next step towards financial freedom, don’t hesitate to contact Marijana or Mei at our West Perth office by dialling 08 9322 1882. Together, we’ll create a tailored plan that works seamlessly for you. 

If you have questions or wish to discuss your retirement plan, contact us at (08) 9322 1882, email admin@lifefinancialplanners.com or visit our contact page. We’re ready to help you navigate your path to retirement. 

Why Financial Planning May Make Sense For You 

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A common misconception we hear is that financial planning is something only for the wealthy, but the truth is, that it is one of the smartest moves you can make, no matter your financial situation or stage in life. At LIFE Financial Planners, we believe that taking control of your finances and building a strategy is a decision that can empower your future, whether you are just starting out, raising a family, or enjoying your retirement.

 

Why Now Is the Best Time to Start Planning 

 

The best time to start your financial planning journey is right now, regardless of how much money you have in the bank. You don’t need to be an expert in finances; that’s where we come in. We are here to guide you through every step, helping you understand and make the most of your financial opportunities.

 

What Is Financial Planning? 

 

In Australia, responsible and legal financial planning can only be undertaken by a trained and accredited professional financial advisor. Financial planning provides you with a clear roadmap to achieving your short and long-term lifestyle and financial goals.

 

Why You Should Have a Financial Plan 

 

While improving your finances is often the main goal, there are other important reasons to consider a financial plan:

 

  • Improving Your Financial Literacy: You might feel like numbers aren’t your thing, but we are here to show you that everyone has the ability to understand and manage their finances. The more you learn, the more confident you will become in making decisions that grow your wealth. 
  • Protecting Your Loved Ones: If you have dependents, having a financial plan is essential. It ensures that your loved ones are taken care of, even if the unexpected happens. 
  • It’s Surprisingly Rewarding: Financial planning can be addictive—in a good way! Watching your savings grow, exploring investment opportunities, and seeing your financial goals come to life can be incredibly satisfying. Many of our clients find themselves more engaged and excited about their financial future than they ever expected.

 

What Does Financial Planning Involve? 

Creating a financial plan doesn’t mean giving up life’s pleasures. It is about understanding and better controlling your budget and cash flow. Whether you are looking to explore health or life insurance policies, superannuation, or retirement planning, we’ll help you find opportunities to save money and build wealth.

 

Is It Worth Paying for a Financial Advisor in Australia? 

We understand that you might be wondering whether it’s worth investing in a financial advisor. At LIFE Financial Planners, we firmly believe that the value of professional advice far outweighs the cost. Our clients trust us because we save them time, reduce their stress, and help them make informed decisions that lead to financial success.

 

  • Expertise and Knowledge: We know the market inside and out—all the products, services, and fine print. We save you hours of research by providing clear, actionable advice. 
  • Simplifying Complex Matters: Financial planning might seem complex, but with our guidance, you will find it much easier to understand and manage. We are here to make sure you feel confident in every decision you make. 
  • Thorough Review: We meticulously go through all your policies, mortgages, and agreements, often uncovering savings and opportunities that can significantly impact your financial situation. 
  • Collaboration with Other Professionals: We are happy to work alongside your accountant, tax specialist, or lawyer to ensure that all aspects of your financial life are working together harmoniously.

 

Ready to Take the Next Step? 

 

Now that you understand the value of financial planning, we invite you to take the next step with us. At LIFE Financial Planners, we are committed to helping you achieve your financial goals with personalised, professional advice. Whether you are starting out or looking to refine your strategy, we are here to support you every step of the way. 

Reach out to Marijana or Mei at our West Perth office by calling 08 9322 1882. Let’s start the conversation about how we can help you secure your financial future with confidence and clarity. 

superannuation planner

Should I Top Up My Superannuation? 

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This question is one we frequently receive at LIFE Financial Planners. The motivation behind it often boils down to two key considerations: ensuring you have enough retirement savings and maximising potential tax benefits. Consulting with a superannuation planner at Life Financial Planners in Perth can provide clarity on this important decision. 

 

Why Consider Topping Up Your Super? 

 

The primary reason to consider topping up your superannuation is to ensure a comfortable and enjoyable retirement. Beyond that, there are significant tax advantages associated with the superannuation system. Here’s what you need to know: 

 

Tax Benefits 

 

Superannuation is an attractive option for accumulating retirement savings due to its tax benefits: 

·        Tax-Free Income in Retirement: Once you retire and convert your super savings into a regular income, this income is tax-free. 

·        Lower Tax Rates During Accumulation: Earnings within your super fund are taxed at 15% on income and 10% on capital gains, which is typically lower than personal tax rates. 

·        Tax-Free Payouts to Spouses: Superannuation is tax-free when paid out to a spouse upon your passing, unlike non-super investments that may incur capital gains tax. 

 

The Drawback: Preservation 

 

One key drawback is that superannuation savings are preserved until you reach at least 60 years of age and retire. This means any money you contribute to super is inaccessible until then. Therefore, it’s important to ensure that any top-up contributions are funds you won’t need until later in life. 

 

Contribution Caps 

 

When considering topping up your super, be aware of contribution caps, particularly the concessional contribution cap, which is currently $30,000 per year. Contributions above this limit may incur penalty taxes. Make sure to check how much of this cap is already being used by your employer’s contributions to determine how much more you can contribute. 

 

Is Topping Up Right for You? 

 

The decision to top up your super should consider your individual circumstances: 

·        Current Taxable Income: If your taxable income is under $45,000, the tax benefits of super contributions might be minimal. 

·        Alternative Uses of Funds: Consider whether these funds might be better used elsewhere, such as paying off a mortgage, which offers guaranteed returns equivalent to your mortgage interest rate. 

·        Future Top-Up Opportunities: You might also consider making larger lump-sum contributions later in life through non-concessional contributions or downsizing provisions. 

 

How Much Do You Need? 

 

To determine whether you should top up your super, start by estimating how much income you’ll need in retirement. Use tools like MoneySmart to estimate how much savings are necessary to generate that income. Then, compare this with your current super balance and projected future contributions to see if additional contributions are needed. 

 

Get Advice From A Superannuation Planner in Perth 

 

Australia’s superannuation system is complex, and it’s crucial to get advice tailored to your specific circumstances. If you’re unsure about whether to top up your super, reach out to one of our financial planners at LIFE Financial Planners in Perth. We can support you with tailored superannuation advice and develop a strategy that aligns with your retirement goals. 

Financial Planner in Perth

Accountant vs. Financial Planner: Understanding the Key Differences 

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When it comes to managing your finances, understanding the distinction between an accountant and a financial planner is important as both professions play different roles in ensuring financial health, with their focus, scope, services provided, and approach can vary significantly. Let’s delve into how an accountant or financial planner in Perth can help your needs.


Focus and Scope 


Accountants:

Accountants primarily deal with financial reporting, tax preparation, auditing, and analysing past financial transactions. Their primary focus is on ensuring legal tax adherence and minimisation. Reviewing your financial history to provide insights into your current financial situation and ensure that all financial activities comply with relevant laws and regulations. 


Financial Planners:

Financial planners, on the other hand, have a more advisory role. They help you with long-term financial planning, investments, and wealth management. Their focus is on recommending when and where to invest money to achieve future financial goals. Financial planners take a holistic view of your financial life, including your investments, retirement plans, and overall wealth management strategy.


Services Provided 


Accountants: 

Accountants typically offer services such as:

  1. Tax Preparation 
  2. Bookkeeping 
  3. Auditing 
  4. Business finance advice 
  5. Asset protection

These services are geared towards ensuring accurate financial reporting and compliance with tax laws. Accountants also help optimise your tax obligations and provide financial insights based on historical data. 


Financial Planners:

Financial planners provide services such as:

  1. Retirement planning 
  2. Wealth management 
  3. Investment advice 
  4. Superannuation planning 
  5. Insurance recommendations


These services are aimed at helping you set and achieve long-term financial goals. Financial planners develop strategies to build and preserve wealth, focusing on your future financial security. 


Timeframe 


Accountants: 

Accountants often focus on past and present financial matters. For instance, they prepare tax returns for the previous year and ensure that current financial records are accurate and compliant with regulations. Their work is rooted in analysing historical data to provide a clear picture of your financial standing. 


Financial Planners: 

Financial planners take a more forward-looking approach. They help you set and achieve long-term financial goals, such as retirement, education funding, and investment growth. Their advice is future-oriented, focusing on creating strategies that will benefit you in the years to come.


Your Needs 


Accountants: 


If you’re primarily seeking tax advice, financial reporting, or compliance-related services, you would typically consult an accountant. Accountants are essential for ensuring that your financial records are accurate and that tax obligations are minimised within the bounds of the law. 


Financial Planners: 


Those looking for help with long-term financial planning, investment strategies, or retirement planning would generally seek a financial planner. Financial planners are invaluable for developing comprehensive financial strategies that align with your future goals and aspirations. 


Choosing a Financial Planner in Perth 


Choosing the right financial planner significantly impacts your financial future. At Life Financial Planners in Perth, we specialise in providing tailored financial guidance to help you achieve your long-term financial goals. Our team of experienced financial planners in Perth offers expertise in both financial planning and wealth management, ensuring you receive comprehensive advice that aligns with your unique needs. 


Whether you are planning for retirement, managing investments, or seeking long-term financial security, our comprehensive approach ensures you have the support and strategies necessary to succeed. Reach out to Marijana or Mei at (08) 9322 1882 to speak to a planner and embark on the path to achieving your financial goals.  

Portfolio Diversification Strategies for Perth Investors

Undeniable Portfolio Diversification Strategies for Perth Investors

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At Life Financial Planners, we understand the importance of building robust investment advice tailored to your unique financial aspirations. If you’re in Perth and seeking to fortify your financial future, understanding the intricacies of portfolio diversification can be a game-changer. Let’s delve into this essential aspect of investment strategy, drawing insights from various sources to provide you with comprehensive guidance.

Why Portfolio Diversification Strategies Matter

In today’s dynamic investment landscape, diversification emerges as a fundamental strategy to mitigate risk and optimise returns. By spreading investments across different asset classes, investors can shield themselves from the adverse impacts of market volatility and economic uncertainties.

Consider this analogy: just as a diversified diet ensures better health outcomes by providing a range of essential nutrients, a diversified investment portfolio safeguards your financial health by offering exposure to various market segments.

How to Achieve Diversification

  1. Asset Class Allocation: Diversifying across asset classes is the cornerstone of a well-rounded investment strategy. This involves allocating funds to different categories such as stocks, bonds, property, and cash equivalents. Each asset class reacts differently to market conditions, thereby reducing overall portfolio risk.
  2. Spread Within Asset Classes: Within each asset class, further diversification is typically recommended (can vary based on your circumstances). For instance, if investing in stocks, consider spreading investments across different sectors like financials, resources, healthcare, and energy. Similarly, diversify across different fund managers and product issuers to minimise concentration risk.
  3. Global Investment: While Perth offers ample investment opportunities, global diversification can enhance portfolio resilience. Investing in overseas markets exposes investors to a broader spectrum of economic conditions, reducing dependence on local market fluctuations.
  4. Utilise Investment Vehicles: Leveraging managed funds, ETFs, and LICs can streamline the diversification process. These vehicles offer exposure to diversified portfolios across various asset classes, making it easier for investors to build a well-balanced portfolio.

Regular Portfolio Review with a Financial Planner:

As you embark on your journey towards portfolio diversification, partnering with a financial planner Perth can add significant value. Our role extends beyond mere guidance; we provide ongoing support and expertise to ensure your investment strategy remains aligned with your financial goals.

Through regular portfolio reviews, we help you:

  • Assess the current composition of your portfolio and identify areas for diversification.
  • Implement strategies to rebalance your portfolio and maintain optimal asset allocation.
  • Stay informed about market trends and emerging opportunities for diversification.
  • Navigate complexities such as tax implications and regulatory changes affecting your investments.

Investing in Your Financial Future

Investing can be complex, but with the right guidance, you can navigate the intricacies of portfolio diversification effectively. At Life Financial Planners, we are committed to empowering Perth investors like you to make informed decisions and secure a prosperous financial future.

Ready to embark on your investment journey? Contact our team today at (08) 9322 1882 to schedule a consultation and take the first step towards achieving your financial goals. Don’t wait any longer to invest in your future with LIFE Financial Planners.

Financial Planner in Perth

How Much Does a Financial Planner Cost in Perth? 

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Understanding the cost of hiring a financial planner in Perth is crucial for making informed decisions about your financial future. Various fee structures exist, and knowing the differences can help you choose the best financial planner for your needs.
 

Financial Planner Perth Fees: 

  • Percentage of Assets Under Management (AUM): In this model, financial planners charge a percentage of the assets they manage for you. Typically, this fee ranges from 1% to 2% annually. While this structure aligns the planner’s interests with yours—since their compensation grows with your portfolio—it can become expensive as your assets increase.

  • Hourly Rate: Some financial planners charge an hourly rate for their services. This model is particularly beneficial if you require specific advice or periodic check-ins rather than ongoing management. Hourly rates can vary widely, but this approach offers flexibility and can be more cost-effective for those who don’t need continuous support.

  • Flat Fee: Flat fees involve a fixed charge for specific services, such as creating a comprehensive financial plan or conducting an annual review. This model provides predictability, allowing you to budget for financial planning services without worrying about fluctuating costs. Flat fees can be particularly appealing for those who want clear, upfront pricing.

  • Retainer Fee: A retainer fee is a regular, recurring fee (often monthly or quarterly) for ongoing access to financial advice. This model ensures continuous support and advice but requires a consistent financial commitment. Retainers provide peace of mind, knowing you have a financial expert available whenever needed.

Life Financial Planners: Fee-for-Service Model 

 

At Life Financial Planners, we adopt a fee-for-service model, which provides several key advantages: 

 

  • Transparency: Our fee-for-service model ensures there are no hidden charges or unexpected fees. You know exactly what you’re paying for, which fosters trust and confidence.

  • Objectivity: We ensure that our advice is solely in your best interest.

  • Customisation: Our services are tailored to your specific financial needs and goals. This personalised approach ensures that you receive advice and strategies that are most relevant to your situation. 

Benefits of the Fee-for-Service Model 

  • Clarity: Understand exactly what services you are receiving and their associated costs. This clarity helps you make informed decisions about your financial planning.

  • Independence: Receive impartial advice that is not influenced by commissions or product sales. Our sole focus is on helping you achieve your financial objectives.

  • Value: Pay for the advice and services that directly benefit you. This model ensures you receive personalised and effective financial strategies without unnecessary costs. 

Why Choose a Financial Planner? 

Choosing a financial planner in Perth like Life Financial Planners ensures that you receive professional and trustworthy investment advice. Certified advisers are bound by strict ethical standards and regulatory requirements, ensuring they act in your best interest. Independence means that their recommendations are free from conflicts of interest, providing you with peace of mind and confidence in your financial plan. 

Ready to Take Control of Your Financial Future? 

If you’re considering professional financial advice, discover how Life Financial Planners in West Perth can help you achieve your financial goals. Our fee-for-service model, combined with our commitment to transparency, objectivity, and personalised service, makes us the ideal partner for your financial journey.

Contact our team today at (08) 9322 1882 to schedule your first complimentary consultation and take the first step towards achieving your financial goals. Don’t wait any longer to invest in your future with LIFE Financial Planners.  

Short-Term vs Long-Term Investments

Understanding Short Term vs Long Term Investments

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At Life Financial Planners, we understand that your financial journey is unique, just like your investment needs. If you’re in Perth and looking to build wealth before retirement and feel more secure in your financial future, having a solid investment strategy is essential. Let’s explore the differences between short-term and long-term investing to help you make informed decisions that align with your financial goals.

 

Understanding Short-Term vs. Long-Term Investing 

The primary difference between short-term and long-term investing lies in how you approach an investment, not the investment itself. For instance, a stock can be used for both short-term and long-term investments depending on whether you buy and sell it within a month or hold onto it for several years. Understanding these differences allows you to craft an investment strategy that aligns with your long-term wealth goals.

 

Main Differences Between Short-Term and Long-Term Investments

 

Aspect Short-Term Investing Long-Term Investing 
Duration Less than a year At least a year, often several years or more 
Strategy Active trading, frequent transactions Buy-and-hold, passive investing 
Risk Higher short-term risk, frequent market monitoring Lower long-term risk, focus on market growth 
Taxation Higher tax rates on short-term gains Lower tax rates on long-term gains 
Liquidity High, quick access to funds Lower, less accessible 


Crafting Your Investment Strategy in Perth 

When deciding between short-term and long-term investments, consider your financial goals, time horizon, and risk tolerance. Both approaches contribute to a well-rounded portfolio. 

Investment Goals and Time Horizon: 

Near-Term Goals: If you need funds in the near future, short-term investments are ideal. For instance, saving for a home loan deposit or a significant purchase in the next few years. 

Long-Term Goals: For goals like retirement, long-term investments are more suitable, allowing you to benefit from market growth and compounding returns over decades. 

Risk Tolerance: 

Short-Term Risk: If you’re a risk-averse investor you may prefer stable, low-risk options, including high-yield savings accounts, CDs, short-term bonds, and money market accounts. These are less risky and are suitable for growing savings for near-term needs. 

Long-Term Risk: Those with a longer time horizon can assume more risk, as they have time to recover from market downturns, making investments like index funds and stocks ideal. 

Building a Balanced Portfolio

At Life Financial Planners, we advocate for a diversified portfolio that combines both short-term and long-term investments. This balanced approach ensures that you can meet both your immediate financial needs and long-term wealth-building goals, whilst diversifying risk and optimising your returns.

An Investment Strategy Tailored to You

Investing might feel overwhelming, but it doesn’t have to be. We’re dedicated to assisting you in creating a tailored investment strategy through expert financial planning. Reach out to Marijana or Mei at (08) 9322 1882 to speak to a planner and embark on the path to achieving your financial goals. Don’t delay investing in your future with LIFE Financial Planners right here in Perth.

Grow your superannuation

How to Grow Your Superannuation

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Superannuation, or simply “super,” isn’t just a savings plan—it’s your key to secure and fulfilling retirement plans. At LIFE Financial Planners in Perth, we recognise the significance of making informed decisions about your super, and we’re here to guide you every step of the way.

 

Super Contributions

Super contributions play a significant role in building your retirement savings. There are various types of contributions you can make to your super fund, including employer contributions, voluntary contributions, government co-contributions, spouse contributions, and downsizer contributions: 

  • 1. Employer Contributions: Your employer is required to contribute a percentage of your earnings into your super account. This compulsory contribution, known as the super guarantee, must be at least 11% (increasing to 11.5% on July 1st 2024) of your ordinary time earnings.
  • 2. Additional Voluntary Contributions: Making extra contributions to your super can significantly accelerate its growth. You can contribute additional funds through salary sacrifice arrangements or by making after-tax contributions.
  • 3. Government Co-contributions: Eligible individuals making after-tax contributions to their super may qualify for government co-contributions. The government matches a portion of your contributions, providing a valuable boost to your retirement savings.
  • 4. Spouse Contributions: If your spouse earns a low income or is not working, you may be eligible to contribute to their super account and claim a tax offset. This can be a tax-effective way to bolster their retirement savings.
  • 5. Downsizer Contributions: If you’re aged 65 or older and have owned your home for more than ten years, you may be able to contribute up to $300,000 from the sale of your home into your super. This one-time contribution can enhance your retirement nest egg.

 

Investment Strategies

Investment strategies involve determining how you allocate your superannuation funds across different asset classes, such as stocks, bonds, property, and cash. The primary goal of an investment strategy is to achieve the optimal balance between risk and return based on your financial goals, risk tolerance, and investment time horizon: 

  • 1. Asset Allocation: Diversifying your super investments across different asset classes, such as stocks, bonds, and property, can help manage risk and optimise returns over the long term.
  • 2. Risk Management: Assessing your risk tolerance and investment time horizon is essential for selecting appropriate investment options within your super fund. If you’re a conservative investor, you may prefer lower-risk options, while oppositely, if you’re an aggressive investor, you may opt for higher-risk, higher-reward investments.
  • 3. Regular Review: Monitoring and periodically reviewing your super investment portfolio is essential for ensuring it remains aligned with your financial goals and risk tolerance. Adjustments may be necessary based on changing market conditions or personal circumstances. Regular reviews with a financial planner can provide valuable insights and adjustments to keep your investments on track.

 

Determining Your Retirement Needs 

  • 1. Retirement Lifestyle: Consider the lifestyle you envision for your retirement years, including housing, travel, healthcare, and leisure activities. Estimating your expected expenses can help determine how much super you’ll need to support your desired lifestyle.
  • 2. Superannuation Gap: Calculate the gap between your projected retirement expenses and your expected super balance. Identifying any shortfall early allows you to implement strategies to bridge the gap, such as increasing contributions or adjusting investment strategies.
  • 3. Age Pension Considerations: Factor in any potential Age Pension entitlements when estimating your retirement income. Understanding your eligibility for government benefits can impact your overall retirement planning strategy.

 

At LIFE Financial Planners, we’re dedicated to helping you take control of your financial future and utilise the full potential of your superannuation benefits. Don’t leave your retirement savings to chance—let us empower you to achieve a secure and prosperous retirement with our expert superannuation advice. Reach out to Marijana or Mei today at (08) 9322 1882 to schedule a consultation at our West Perth office.