Avoid Carrying Debt into Retirement

Increased housing costs and low wage growth are seeing more Australians carry higher levels of debt into retirement. Repaying this debt can place a major drag on retirement cash flows and prevent the achievement of retirement goals. Most of us would ideally like to, at the very least, maintain our current standard of living in retirement, but having debts to service in retirement means that there’s less money to spend on living essentials. And lets face it, the last thing you want to be worrying about in retirement is debt.

To avoid debt in retirement, these are some ways to go about it:

The ‘pay off one debt at a time’ approach

  • Tackle high interest debt first- Make a list of things you owe money on. Then, rank it from the highest to lowest interest. Then focus on paying off the loan with the highest interest. If you’re paying interest on credit card balances or personal loans and have the ability to redraw on a mortgage, pay them off using your mortgage account.

Look into Downsizing

  • Downsize your home. This may allow you to pay off debts and still have enough to purchase a smaller home. If this strategy frees up more money than you need to repay your debt, investigate the superannuation incentives available to ‘down-sizers’. Also, be aware any surplus cash you pocket may reduce age pension payments.

What if I already retired?

  • Already retired? Consider looking at using your superannuation to pay off outstanding debt.

As always, it is important to take your personal situation into account. Endorphin Wealth is able to create personalised strategies taking into your requirements and creating a happy, worry-free retirement plan. For example, if your mortgage interest rate is low, you do have significant investments earning a good return. This also means you have a long life expectancy and thus carrying some debt into retirement may be worth considering.

To manage your debt in retirement, Endorphin Wealth have many experienced financial advisors familiar with the process of managing debt in retirement.

For an obligation-free conversation about your financial future, please contact us on 03 9190 8964 or at advice@endorphinwealth.com.au.

The team at Endorphin Wealth are passionate about helping people achieve their life goals with great financial planning. We are not licensed or owned by big banks and financial institutions. So the advice and wealth management we provide is always in our client’s best interests. We have the advantage of being able to access a range of products from different providers. This means that our advice can be tailored to our client’s goals. We have offices located in Sydney and Melbourne, where you can find a financial advisor that is suitable for you. 

7 Common Mistakes in Wills and Estate Planning – Sarina Cowle

Sarina Lea Cowle is an accredited practitioner specialising in commercial law, wills and estates and workplace relations at Sarina L Cowle & Associates based in Melbourne. Previously, Sarina was a member of the business network international and was also a specialist at Premier Wills. Now owning her own business and coupled with over 30 years of experience, she looks into the 7 most common mistakes in wills and estate planning.

If you would like to contact Sarina Cowle, her details are:

Email: scowle@slclaw.com.au

Mobile Number: 0407 697 802

Website: SLC Law

 

 

7 Common Mistakes in Will and Estate Planning- Sarina Cowle

Having a goal, via a will, is important for the orderly passing of assets to the next generation. This includes charities and could protect the relevant family.  It is important to state formally and legally, a person’s final wishes.

Some people believe that going against wills are not worth making.  However, if someone does not record their own wishes then there is no evidence of what the will-maker thought was reasonable or wanted.

As such, the following points may help avoid some of the common errors.

  1. Consider Updating Regularly

A person regularly should consider updating their will. Particularly when major life events occur (eg. marriage, births, death of family members, divorce) and where financial affairs become more complicated (for example, the addition of trusts, companies, businesses and super funds).

Failure to consider the impact of any big changes could result in unintended gifts and inheritances. This could open up the estate to challenges and extra costs, possibly even thousands of dollars in legal costs!

A person may not need changes to a will that is well-drawn and can keep in mind some of these changes which is important to consider.

  1. Remember to Consider TAX!

Inheritances are generally not taxable in Australia.  However, there are “taxes” on the issuing of superannuation entitlements to non-dependants (eg. adult children). This includes important capital gains tax issues to think about.

Well-thought-out estate plans can decrease tax and increase the payouts to beneficiaries.

In the handling of estates, there are timelines to consider that greatly affect potential capital gains tax issues.  An experienced lawyer and accountant will be able to help.

  1. Remember to Appoint an Executor You Can Trust

An executor will be the party who handles your estate, therefore as a will-maker, you should choose wisely.

There are legal protections for beneficiaries against unskillful executors, however, a party who has the skills and one whom a will-maker can trust is always the best choice.

  1. Will Kits Are OK – If You Sign and Complete Them Correctly

Will kits that you pay for are generally well written. However, in fact, a lot remains in a drawer unsigned or incomplete.

Requirements for wills signatures are very fixed and are often wrong.  Following the law, there are ways to use a will that is not correctly signed, but again, a lot of extra costs is normally expected.  Some poorly signed wills may require a Court application to process.

  1. Include All of the Assets

Many people fail to issue all of their estate, whatever that might be at the correct time.  It is important to name specific gifts of property, for example, a car or house or painting AND to issue any remainder of the estate.  Normally the “residue” is the remainder of the estate. If these named gifts of major assets are sold during the will-makers lifetime, it would be problematic as it could leave a planned beneficiary with nothing!

  1. Consider Beneficiaries Needs With Care

Some beneficiaries can profit from special trust requirements or Special Disability Trusts under Services Australia Rules.  Others may have a legal disability and legal exposure like bankruptcy or because they are in risky occupations, for example, professionals and people who run their own businesses.

Some will-makers want to gift to beneficiaries who have a hard time with money or relationships or may be bankrupt.  A well-drafted will can protect family assets from wastage and give protection to the family inheritance.

  1. Superannuation and Assets Outside of the Will

Some will-makers forget that their companies and trusts may not form part of their grounds for issuing.  Superannuation is a great example. It is controlled by completely different rules and mainly the trust deed of the linked super funds.  Assets in a trust are passed down in the trust deed, and the amount is most likely besides the point.

It is important to guide the correct issuing of superannuation so there is no doubling up. This includes unfair and surprising treatment of beneficiaries or situations of excess tax.

Sarina Lea Cowle

The team at Endorphin Wealth are passionate about helping people achieve their life goals with great financial planning. We are not licensed or owned by big banks and financial institutions. The advice and wealth management we provide is always in our client’s best interests. We have the advantage of being able to access a range of products from different providers. This would be tailored to our client’s goals. We have offices located in Sydney and Melbourne, where you can find a financial advisor that is suitable for you.

For an obligation-free conversation about your financial future, please contact us on 03 9190 8964 or at advice@endorphinwealth.com.au

Make Christmas a Time of Joy for You!

It seems to arrive earlier and earlier every year. Just when you thought Christmas was only weeks ago, suddenly it’s only weeks away! While children count down the days, Christmas for many adults can be a difficult time financially. At Endorphin Wealth, will be able to help you plan out your Christmas budget and finances, with some savings to spare!

It can be a challenge to organise and prepare meals, buy gifts or to arrange a Christmas party. This can have the opposite effect to what most of us would like to achieve at this time of year. And let’s not forget that feeling when credit card bills arrive in January!

The good thing is that you get another chance each year to do things differently so you can have a different and much better Christmas this time around. Here are some ideas:

1. Create a Christmas Budget

Getting your spending in order isn’t all about sacrifice. A budget is just a plan. And working with a plan this Christmas can help ease any festive financial fears. You can carve out budget for things like gifts and holiday adventures plus still keep space for the usual joys, like weekly yoga or a meal out every Friday.

And you don’t need to do it alone. Endorphin Wealth has a team of experienced financial planners that can guide you every step of the way. We use personalised cash flow calculators and budget strategies to ensure you have a worry-free Christmas.

2. Small Savings = Big Gains in your Future

The countdown to Christmas is real. Why not pass the time by finding something small to save each day – look at it as a personal advent calendar! Maybe it’s making dinner at home, or adding spare change into an investment account.

We all have different small costs we could cut to have a little extra to spend – why not seek a financial planner to see where and you save and see what you could be using to fuel your festive spending power.

3. Start Shopping for Gifts Early.

Any benefits of “retail therapy” are soon lost as we push through overcrowded shopping centres looking for the perfect gifts for our loved ones. If you have left your Christmas shopping too late, make a list of the gifts you need in advance so you don’t waste precious time “browsing” or exceeding your budget. Or maybe do most of your Christmas shopping from the comfort of home – go online!

When you shop-smart, you could consider if there’s a local alternative to the most expensive brand name on your list? Compare prices, delivery costs, features and warranties and weigh up which product is going to give you the most bang for your buck. Buying earlier (like now!) can make a difference too. The closer it gets to Christmas Eve, the likelier it is that there will be a rush of demand that limits your choices and increases delivery costs.

4. Give Presents that Don’t cost an Arm and Leg.

When you think of the most precious things you’ve been given by your loved ones, there’s every chance it’s the experiences or the intention that counted much more than the gift itself. A present is really a way of saying “hey, I care about you, and this is a reminder”. So get creative.

If you can cook, paint or make things, why not craft a custom Christmas hamper or upcycle some vintage furniture? You could always gift someone a loyalty card that entails them to your driving skills, or music lessons. This way you can gift the perfect present without blowing your budget.

5. Savings Skills are the Gift that keeps on Giving

Sure, this isn’t a Christmas-only tip, but here at Endorphin Wealth, we want to help you have a healthy, happy attitude to saving all year round. Setting yourself up for a joyful New Year with some savings can help you focus on living – not losing sleep over your financial situation.

By setting aside a daily amount and an account for long-term saving, you’re investing in your own peace of mind. Micro-savings now, lead to mega savings later. Not sure where to start? At Endorphin Wealth , we have a team of expert financial planners that can help you create a cash flow strategy and budget for a happy, worry-free Christmas. Till then, Merry Christmas!

 

For an obligation-free conversation about your financial future, please contact us on 03 9190 8964 or at advice@endorphinwealth.com.au.

The team at Endorphin Wealth are passionate about helping people achieve their life goals with great financial planning. We are not licensed or owned by big banks and financial institutions. So the advice and wealth management we provide is always in our client’s best interests.

We have the advantage of being able to access a range of products from different providers. This means that our advice can be tailored to our client’s goals. We have offices located in Sydney and Melbourne, where you can find a financial advisor that is suitable for you.