Life Insurance Cover in Australia: Time to talk about the elephant in the room

In the media recently, we have heard plenty of dialogue around the cost of housing and unaffordability. How difficult it is for young families to purchase houses that are – to be honest – outrageously priced. Especially if you are in Sydney. We hear anecdotes of older parents, often at retirement age, helping their children out with house deposits or a fantastic new trend where parents build granny flats on their property for them to live in and their child’s family move into the main house. How’s that for thinking outside of the box? But all’s quiet on the media landscape around the topic of parents helping adult children out when they face times of financial hardship brought on by illness, trauma, and accidents and in worst case scenario, death. One story we heard recently – and it will tug at your heartstrings – was of a single mum who returned home to live with her Dad. He is retired and was happy to have his daughter and his five year old grand-daughter live with him to share expenses and help his daughter get back on her financial feet again after a tough relationship break-up. Sadly, the mum died unexpectedly. The grandfather, the beautiful man that he is, is raising his granddaughter and has found his retirement savings doesn’t cover off on the costs of raising a five year old and her future needs. It’s a sad story and quite often we don’t want to think about or even take action around the ‘what ifs’ but it’s so important we do. Financial planners are seeing more and more clients who are...

How to Boost Your Super Fund’s Performance

Many people think superannuation is a long-term thing. Who thinks about their super fund performance on a regular basis? Those payments from your wage that get popped straight into a superannuation account you barely think about and that you hope will give you the funds you need in retirement….whenever that may be. As it’s approaching the end of financial year (one of our favorite times of year here at Blenkhorn and we’re not joking!) we want to share some ideas with you on how to keep your superannuation front of mind. You’re working so why shouldn’t your super also get working? The end of the financial year is a great time to take stock of your financial situation and make some smart decisions about your future. Here are some super Super strategies to get you started: 1. Salary sacrifice With salary sacrifice, you can put some of your before-tax income into your super. These contributions are classified as concessional contribution and are generally taxed at 15% for most people – which may be less than your current marginal tax rate. Salary sacrifice depends on your personal circumstances and you need to be careful you don’t breach any caps on contributions and conditions. Call a Blenkhorn financial planner to be sure. 2. Protect your family Under-insuring is a major issue in Australia and while we don’t ever want to face the possibility of passing away, getting very ill or becoming disabled, the fact is it can happen. If cash flow is preventing you from taking out life insurance you may want to consider life insurance cover through your Super. This...

5 ways to choose a Financial Planner

Why is it such a big decision for choosing the right financial planner? Sharing your deepest, darkest financial secrets with someone is a big step to take. We are often told stories of our client’s parents or grandparents hiding money around the house or in the back shed because they felt it was safer to do that than entrust either a bank with the money or a financial planner with their future. Thousands of dollars hidden in books, tyre rims and inside crockery statues! Thankfully times have changed somewhat and now the financial planning industry is regulated by ASIC and has some great industry associations that focus on keeping the standards of this industry high and authentic. And yes, there will also be sharks in any industry. That’s a given. So here are our tips on how to choose the right financial planner and keep those sharks at bay by separating the financial planning wheat from the chaff. 1. Check Industry Association Membership The Financial Planning Association and the Association of Financial Advisors are the two main industry associations in Australia. Members are bound by a code of ethics and professional practice and must meet continual professional development requirements. 2. Ask for Qualifications While experience is great, a qualification gives that experience credibility. It quantifies the experience with theory and currency. 3. Who is Really Running the Show? A number of organisations such as banks and insurance companies also offer financial advice. While that’s great, it also means that sometimes the focus is on that company’s products and signing clients up to use them. Blenkhorn Financial Planning is privately...

Live Long and Prosper

Some interesting data about retirement planning was released recently. And it was a little confronting. This is what we like to call a bad news sandwich. Some bad news surrounded by a whole lot of good news. So let’s start with the first slice of good news. Australians are living longer. Hooray! As a society, our life expectancy is gradually increasing. In fact Australia was announced recently as one of the four countries in the world where average life expectancy is now over 80 years. We’re right up there with Japan, Switzerland and Iceland. Great company to keep. But here’s the bad news. We’re not planning for it. Here are some eyebrow raising statistics from The 2014 Retirement Income Report about our attitude toward retirement and money. • 44% of retirees expect to outlive their retirement savings • Only 10% have a plan of attack to combat this • 51% of accumulators (those that are still working and building wealth) expect to outlive their retirement savings • $150,000 is the average retirement savings gap • People underestimate the length of retirement by up to 7 years And if you’re a woman the bad news bit continues. Latest data from the Australian Bureau of Statistics shows that on average, women are expected to live four years longer than men. AND the Australian Institute of Superannuation Trustees and Women in Super forum published analysis that states the average Australian woman currently retires with just over half of superannuation savings compared to men. Ouch! Fairly sobering statistics. But that’s okay because here comes the other good part of the sandwich. You can...

Who has the power to make decisions for you?

A CASE STUDY – What happens if one of you suddenly needs help? The tale of a missing Enduring Power of Attorney At 65 Tim & Margaret sold their family home in Sydney and purchased a new home on the Central Coast for their dream sea-change retirement. Completely unexpectedly within a short period after the move the Margaret was diagnosed with Alzheimer’s that sadly deteriorated rapidly. Alarmingly she started to wander at night whilst Tim slept and ended up on a busy highway one night. Suddenly the situation was beyond Tim’s ability to manage on his own & it was essential for her safety that Margaret enter a care facility that could watch over her 24 hours a day. However, the only facility with a place available at the time was in the Western Suburbs of Sydney, a long way from the Central Coast. Tim was a pragmatic kind of fellow & so decided to immediately sell the house and move nearby to the care facility. As if he was not dealing with enough difficulty seeing his beloved partner in a care facility and her condition deteriorating, suddenly Tim’s future was also now out of his control. Unfortunately neither Tim nor Margaret had an Enduring Power of Attorney for each other so Tim could not sell the house without Margaret’s permission and she was now not of sound mind. Their case was then handed over to the Public Trustee to decide if it was in Margaret’s best interests to sell the house. Whilst Tim has waited for many months for a decision by the Public Trustee he travels hours...