Massey Financial Advice

Question: I recently noticed that my super statement mentions nominations. What are they, and what types of nominations can I make? Answer: Superannuation nominations allow you to specify who will receive your superannuation and any related life insurance benefits upon your death. There are different types of nominations, each offering varying levels of control. A binding nomination is a legally binding instruction to your super fund, ensuring that your benefits are paid to the nominated beneficiaries. This provides certainty but needs to be updated regularly, as most binding nominations expire after three years unless you opt for a non-lapsing nomination. A non-binding nomination is more of a guideline, giving the trustee of your super fund discretion to consider your wishes, but they can decide based on other factors, such as your dependents or current circumstances. There is also the option of a reversionary beneficiary, used for super pensions, which ensures that the pension continues to be paid to a specific person, such as a spouse, after your death. Reviewing your nominations periodically with your financial adviser is important to ensure they still align with your current wishes and life situation. If this applies to you, book a free initial call https://buff.ly/3RaGqS4

Common Stocks and Uncommon Profits "Common Stocks and Uncommon Profits" by Philip A. Fisher emphasizes the importance of investing in high-quality companies with sustainable growth potential. Fisher introduces his "scuttlebutt" method for conducting thorough research and understanding a company's management and competitive position. He advocates for a long-term investment perspective, focusing on the intrinsic value of businesses rather than short-term market fluctuations. The book also challenges traditional investment practices, encouraging investors to prioritize quality over quantity in their stock selections. Read more at https://buff.ly/48oLPMX

Wishing you the best of luck at the Melbourne Cup today. If your strategy for retirement hinges on a significant win on the big race, we should definitely have a conversation to create a realistic plan! Schedule a call with me. https://buff.ly/3RaGqS4

Question: I noticed on my super statement that there were different fees listed. What are these fees for, and should I be worried they will affect my balance? Answer: Super funds typically charge a range of fees, including administration fees, investment fees, and sometimes insurance premiums. Administration fees cover the day-to-day costs of managing your account, while investment fees relate to managing the assets in your super. Insurance premiums, if applicable, cover any life, TPD, or income protection insurance you hold within your super. These fees are deducted directly from your super balance. While some fees are necessary to manage your account and investments, they can reduce your overall returns over time. Even small differences in fees can significantly impact how much your super grows, especially over the long term. You should see a financial adviser who can regularly review your super statement to ensure you’re not paying more than you need and that the fees align with the services and performance you’re receiving compared to the market. If this applies to you, book a free initial call https://buff.ly/3RaGqS4

Aged Care Reform: The Consumer Protection Challenge and What It Means for You Due to our aging population there is a surge in demand for aged care. This is a complicated area both financially and legally, not to mention emotionally. Regulatory changes aim to improve consumer rights and safety in aged care. Transparency, accountability and quality standards should enhance the overall experience of those in aged care. Read more at https://buff.ly/3ZWGKct

Question: My friend told me that when I pass away, my super might be taxed before it’s distributed to my children. How does this work? Answer: Your superannuation may be taxed before it is distributed to your beneficiaries. How this is taxed is dependent on who your beneficiary is and the taxable components of your super fund. There is a taxable component, typically comprised of employer contributions, voluntary taxable contributions, and investment earnings of your super. This portion may be subject to tax upon distribution if the beneficiary is not a tax dependent such as an adult child, incurring a tax of 15% plus a 2% Medicare levy. Dependents such as a spouse or children under 18 will receive it tax-free. Conversely, the tax free component, which consists of after-tax contributions, is tax-free for all beneficiaries regardless. Understanding these distinctions is crucial for effective estate planning, as it allows you to strategise how your superannuation will be allocated to your beneficiaries. If you would like to find out how this applies to you and create a strategy to address it, book a free initial call https://buff.ly/3RaGqS4

Boom or Bust? Understanding the Forces Shaping Australia’s Property Prices Australian house prices not only reflect economic prosperity, but are also a key part of many Australian’s wealth. A number of market factors could point towards growth or decline in real estate markets including interest rates, economic growth and government policies. There are some investment strategies that may help mitigate risks in uncertain times with a fragmented market. Read more at https://buff.ly/3ZWGKct

Question: I recently heard about testamentary trusts after my friend completed his estate planning with his. How do they work? Answer: A testamentary trust is a type of trust established through your will and activates upon your death. It allows you to dictate how your assets are managed and distributed to beneficiaries. This type of trust offers several advantages, including potential tax benefits, as income distributed from the trust may be taxed at lower rates than if given directly to beneficiaries. It also provides you with control over the timing and manner of asset distribution, ensuring they align with your wishes. While a testamentary trust can be a valuable estate planning tool, particularly in complex family situations, it does require careful legal drafting and consideration, often necessitating professional advice to navigate associated costs and administrative details. Ultimately, it helps ensure your assets are managed according to your specific desires after your passing.

The Psychology of Money Our emotions and behaviours impact our financial decisions. Through a series of short stories, Housel shows how emotions, personal experiences, and cognitive biases influence our approach to money. Explore the why behind financial choices and discover how financial success may be linked to how you behave. Read more at https://buff.ly/3ZWGKct If you would like to work on your financial success, book a free initial call https://buff.ly/3RaGqS4

Question: Someone at work told me that my pension fund is subject to sequencing risk because it is only invested in 1 diversified fund. What is sequencing risk? Answer: Sequencing risk is the risk that the timing and order of investment returns will adversely affect a portfolio, particularly during retirement when withdrawals are being made. This risk is heightened if significant losses occur early in retirement, as it can deplete the portfolio more quickly and leave less time for recovery. In other words, poor returns early on can undermine the long-term sustainability of the portfolio, as subsequent withdrawals can magnify the impact of these early losses. You should see your financial adviser who can help you design a suitable portfolio to help you manage sequencing risk. If you are looking for a financial adviser, book a free initial call https://buff.ly/3RaGqS4