Federal Budget 2017

Federal Budget 2017

 

For the first time in many years, the government has delivered a budget that has been widely approved by economists and opposition parties alike. Some commentators have even likened it to a ‘Labour Budget’ with more taxes on the banks and moves to support the NDIS and additional funding for schools

We’ve taken a close look at the budget itself and the expert commentary on the proposed changes to our financial system and compiled a list of the most relevant items for you.

The Federal Budget details the government’s intentions for revenue raising and expenditure for the forthcoming year and it is important to note that it is still to be considered by parliament before the new financial year.

Retirees encouraged to downsize

To increase housing stock, the Government is encouraging older Australians, aged 65 or over, to downsize their properties by allowing them to make a non-concessional contribution of up to $300,000 into their superannuation fund from the proceeds of the sale of their principal home.

Importantly, the normal super contribution rules such as ‘work test’ requirements that currently apply to those aged 65 or older will not apply to these contributions, and they can also be made by those with more than $1.6 million of total superannuation.

Removal of some deductions for property investors

From 1 July 2017, travel expenses incurred in inspecting, maintaining or collecting rent on residential investment properties will no longer be tax deductible.

In a separate proposal, depreciation deductions for plant and equipment in residential investment property will be limited to the actual expenditure incurred by the investor. This is to stop investors ‘double-dipping’ on deductions that may have already been claimed on the same assets by previous owners.

Medicare levy to be increased by 0.5% to 2.5% from 1 July 2019

To ensure all Australians can continue to access timely and affordable healthcare, the Government announced that it will set up the Medicare Guarantee Fund to pay for all expenses on the Medicare Benefits Schedule and the Pharmaceutical Benefits Scheme (PBS). The revenue raised will be allocated to Medicare benefits, the Pharmaceutical Benefits Scheme (PBS) and to fully fund the National Disability Insurance Scheme (NDIS)

Initiation of the First Home Super Savers Scheme

To help first home buyers get ‘into the game’, they will be able to save for a deposit by making additional voluntary contributions into their superannuation account from 1 July 2017. The First Home Super Savers Scheme will enable access to the tax advantages of superannuation with pre-tax contributions and earnings taxed at 15%, rather than marginal rates, and on withdrawal taxed at the relevant marginal rate, less 30% offset.

These voluntary contributions plus their deemed earnings can be accessed from 1 July 2018. Savers will not have to set up a new account, they can just use their existing super account while contributions will be limited to $30,000 per person in total and $15,000 a year. The contributions made will be counted under the relevant contributions caps.

The government has even gone as far as to provide a website for first home buyers to estimate how much better off they would be utilising the scheme.
http://budget.gov.au/estimator/index.htm

In other news

On the spending front, the government is also looking to provide:

•    A further ramp up in infrastructure spending (by an additional $20bn over the forward years) including Western Sydney Airport, inland rail & various road projects.
•    Extending the small business $20,000 asset write-off scheme and working with states to remove red-tape.
•    $18.6bn over ten years in extra school funding (Gonski 2.0).

Which is being offset by:

•    Increased university fees.
•    A 0.6% levy on the major banks with liabilities over $100bn.
•    More measures to curtail the cash economy and improve the integrity of the tax and welfare system.

So potentially a few interesting policies that could have a considerable impact on our client’s financial future. We will of course be in direct contact with affected clients if any of the above is legislated and will affect your wealth moving forward.

For an obligation free conversation about your financial future, please contact us on 03 9603 0072 or at advice@endorphinwealth.com.au

Phillip Richards and Robert Rich

Endorphin Wealth Management

Financial Advisor Phillip Richards
Phillip Richards is a qualified Financial Advisor with over ten years’ experience.

Contact Phillip today to discuss how you can build your own wealth and plan to reach your retirement goals.

 

Financial Advisor Robert Rich
Robert Rich is a qualified Associate Financial Advisor with over nine years of personal investment experience.

Contact Robert today to plan for your retirement goals.

 

This information is general in nature and does not take your personal situation into account.

Contact Us today for quality financial advice so you can feel good about your future.

Retirement Planning – Is My Super Fund Right For Me?

 

There are over 240 different superannuation funds in Australia and thousands of different investment options available to choose from. We often provide advice on retirement planning to assist our clients compare their current super fund and investments within the market.

We find a proactive approach to superannuation has the potential to significantly increase your balance in retirement. Not only are we able to find fee savings for our clients, but often better performing investments too.

Let’s look closer at how to identify a great super fund and the benefits you can gain from keeping on top of your investments.

Retirement Planning – Superannuation Investments

What should I be invested in?

Some funds will only have a handful of investment options for you to invest in, whilst others will have hundreds of different opportunities available. Tailored financial advice can help you to choose an appropriate mix of investments for your situation.

Direct holdings in quality Australian companies have performed very well over the last 5 years such as Commonwealth Bank (17.9% growth and dividends pa), Telstra (10.9%pa) and Ramsay Health Care (29.8%pa)

Investments like these can potentially assist you to outperform with your investments and maximise your retirement balance.

How are my investments performing?

Superannuation is such a long term investment and performance can have a huge impact on how much money you will have built up at retirement. The below table highlights the difference a 1% return per year can make to the end result:
Retirement Planning - Is My Super Fund Right For Me 1
The additional $158,983 could genuinely mean the difference between a carefree retirement or one worrying about your finances.

Retirement Planning – Superannuation Fees

What fees am I paying for my super fund?

There are a number of types of fees commonly charged by superannuation funds to manage your superannuation and the investments held within it. These range in value dramatically and can include Annual Member Fees, Administration Fees, Investment Fees and Performance Fees.

In the same way as performance is important in determining how much money you end up with in retirement, fees can work to erode your savings and a small change in fees can result in a dramatic effect:

Retirement Planning - Is My Super Fund Right For Me 2

How Endorphin Wealth Management can help

Non aligned

Here at Endorphin, we have no alignment to the big banks, so the advice is always in our client’s best interests. We have the advantage of being able to access a range of products from various providers that can be tailored to our client’s needs.

Comprehensive analytics and research

We invest a great deal of time and effort researching the best strategies and investments for our clients. We have, over time, developed a number of systems to manage and track the marketplace. We’ve been able to identify some really well featured and low cost options for our clients to manage their superannuation.

The investment landscape always evolves and it is more important than ever to consider your investments and superannuation funds carefully. We pride ourselves on being experts in researching investments and strategies that fit in with your retirement goals. We want all of our clients to get on with enjoying their life rather than worrying about money.

For an obligation free conversation about your financial future, please contact us on 03 9603 0072 or at advice@endorphinwealth.com.au

Phillip Richards and Robert Rich

Endorphin Wealth Management

Financial Advisor Phillip Richards
Phillip Richards is a qualified Financial Advisor with over ten years’ experience.

Contact Phillip today to discuss how you can build your own wealth and plan to reach your retirement goals.

Financial Advisor Robert Rich
Robert Rich is a qualified Associate Financial Advisor with over nine years of personal investment experience.

Contact Robert today to plan for your retirement goals.

 

This information is general in nature and does not take your personal situation into account.

Contact Us today for quality financial advice so you can feel good about your future.

May 2017 – Retirement Planning Seminar

The end of the financial year is fast approaching with changes to the superannuation legislation. We’re presenting a retirement seminar for people approaching retirement to learn more about actions they can take now before the changes take effect.

Wed 17/5/2017 5.30pm – 7.30pm
Level 19, 727 Collins St, Melbourne
RSVP to jennifer@endorphinwealth.com.au

retirement-seminar