But if you’re a woman earning an income, it’s never too late to play catch up. Looking at your super and taking action now could make a difference over time to how much savings you have in super for retirement.

Get to know your super better – it’s your money
Superannuation, or ‘super’, is money set aside while you are working so that when you stop working it will provide you with an income in retirement. If you are an employee, your employer should be making super contributions to a superannuation fund on your behalf. These payments, known as super guarantee or concessional (before-tax) contributions,will be equivalent to 9.5 per cent of your salary or wages.

If you are self-employed, you will need to pay yourself super to provide for your retirement. You can make regular contributions or make lump sums less frequently, to suit your cash flow. To get to know your super better, start by checking your balance regularly, along with the insurance and investment options you have to make sure they are the best fit for your circumstances.

The Australian Taxation Office (ATO) recommends that you check your employer is paying the correct amount of super on your behalf. If you are unsure how much your employer should be paying you can use the ATO’s Estimate my super tool. If your employer is not paying the correct amount you can report this to the ATO online.

Many super funds arrange life and disability cover for their members, for a fee. Having insurance can provide a good sense of security for you and your family. It’s important that you know what cover you have as you might have similar cover under another type of policy. This might mean you are paying for the same cover twice, however you will not be able to claim twice.

Consolidate your super and save on fees
It’s a good idea to make sure all your super is in the same place. If you’ve changed jobs, different employers might have made your super guarantee payments to different funds over the years. This means you could have ‘lost super’ in accounts you’ve forgotten about. If your super is in multiple funds, you also have to pay separate administration fees to each fund, which eats into your retirement savings.

Contribute more and watch your super savings grow

Want to see your super grow faster? You can make payments into your super fund account in addition to the Super Guarantee 9.5 per cent that your employer pays on your behalf. This could really boost your super over time, and can help you make up for periods when you are not working. Even small amounts could make a difference.

The different types of additional contributions that can be made to your super fund are:

• Concessional (before-tax) super contributions – these are super contributions you make before you pay tax on them.
• Non-concessional (after-tax) super contributions – these are super contributions you make from sources that have already been taxed.

Be aware that the Federal Government applies monetary caps to these contributions to limit the tax concessions associated with making super contributions. Some types of contributions if made in excess of these caps are subject to tax rates of up to 49 per cent.

Don’t forget your TFN, otherwise you may pay more tax
To confirm if your super fund has your tax file number (TFN), take a look at your super statement. If your TFN is not listed, contact your fund and give it to them.

The benefits of providing your fund with your TFN are:

• Your fund will pay less tax on employer contributions (and pass the savings on to you)
• Concessional contributions are generally only taxed at 15 per cent, which means you could lower your taxable income
• You are less likely to lose track of a super account
• You will not miss out on government super payments – for example, the government co-contribution if applicable
• You will be able to make personal (after-tax) contributions to the fund.

Source: Colonial First State, 20 December 2018

The post Four Tips For Women To Take Control Of Their Super appeared first on Luka Group Accountants & Advisors.

The article below by Russell Investment Management provides a good summary of short and long term considerations for investors.

U.S. elections 2016: Trump wins White House. Markets react.
U.S. voters wanted change. They got it. We will have Donald Trump as the next American president

.In September, we wrote about the erosion of the middle class, especially in key rust belt states. Even with the aggregate economic gains during Obama’s presidency, there was a feeling of dissatisfaction among these segments of the electorate. The election results suggest that Donald Trump was able to tap into this as an agent of change. And Republicans also maintain control of both the House and Senate, meaning that President Trump’s policies could have a slim margin of support in Congress.

Global markets initially appeared to be taking the news badly. Overnight, the U.S. market sold off sharply. At their lows on November 8, according to the CME Group at 10 p.m. Pacific Time, Dow futures contracts were down 4.7% and S&P® 500 futures were down 5.0%. In other regions, according to Thomson Reuters Datastream at 8 a.m. Pacific Time, the Nikkei 225 index was 6.2% lower than the previous day’s closing levels and the FTSE 100 off 2.2%. In addition, foreign exchange markets experienced some turbulence, with the Mexican Peso down 12.6% against the US Dollar at 8 a.m. on Thomson Reuters Datastream today.

Since then, however, equity markets have pared their losses after the president-elect adopted a conciliatory tone in his victory speech. As of 8 am Pacific Time on November 9, the S&P 500 was down just 0.1%, while the Dow Jones Industrial Average was up 0.1%. The UK’s FTSE 100 is positive 0.4%. One noticeable exception is Mexico’s peso, which fell 8.3% against the U.S. Dollar on the news as of these election results. 

On the fixed income side, long-term interest rates look to be significantly higher today. The 10-year U.S. Treasury yield moved up from 1.86% to 1.95% (its highest level since March 2016). The risk-off environment seems to be short-lived and now the bond market needs to carefully consider the potential inflationary consequences of greater fiscal spending.

Keeping an eye on the short term
While there was a quick selloff at first signs of a conclusion to the U.S. elections, and markets seem to have recovered quickly, there still may be some near-term volatility. As with many geopolitical events that generate market swings, we believe the first priority is to rationally evaluate your chosen investment strategy. Review your primary market indicators (we use cycle, value and sentiment), consult your expert advisors and then chart your course over the long term rather than as a reaction to current events. There could be opportunities you miss if you rush to follow the herd.

Looking at the potential longer-term global ramifications, President Trump may call into question the decades-long assumption that more trade is good trade. The “Brexit” vote this past summer was one shoe dropping on a growing belief that trade may not always be good. The U.S. presidential election is another shoe. Trump has opposed the Trans-Pacific Partnership, said he will re-negotiate or tear up the North American Free Trade Agreement (NAFTA) and has generally shown a willingness to renegotiate trade deals with anyone. Most investors in a global economy will be watching how U.S. trade policies develop.

Looking ahead to the medium-term
Even though such a drastic change in administrations may seem jarring to some, the American political system has plenty of checks and balances, which is why no president since Franklin D. Roosevelt has been able to enact a truly far-reaching agenda like the New Deal.

Plus, the U.S. economy is driven far more by the private sector and consumer spending, in particular, which accounts for nearly 70 percent of economic activity. Fundamentals matter more for the outlook: what happens with earnings growth, economic growth, and monetary policy are likely to be much more influential than presidents when it comes to financial markets, in our view.

And don’t forget that the U.S. Federal Reserve (the Fed), which holds many of the economic levers in the United States, has an important meeting in December. We still think the Fed is on track to hike at that meeting, but it is a much closer call after today’s outcome. Janet Yellen and the Federal Open Market Committee will be looking at financial conditions to see whether markets stabilize before making that important policy decision.

So we don’t see this election as having a lasting impact on markets. True, it will take some time for investors to consider the implications of a Trump presidency, and act accordingly. But there are sectors that might benefit—energy could outperform, given Trump’s insistence that he will reduce regulations and work to boost output of oil, gas and coal. Healthcare and biotech stocks, which faced concerns that Hillary Clinton would seek greater regulation and even price controls, might benefit as well. More fiscal spending could reinvigorate growth and potentially help to boost the infrastructure sector.

The markets during the next presidency
While President Trump comes with plenty of uncertainty, it isn’t clear what many of his policy positions are and what he’ll actually push forward as a legislative agenda, nor is it clear what direction the Fed will take under a Trump presidency. He has said he will replace Fed Chairwoman Janet Yellen, although her current term is through January 2018.  The Fed is deliberately positioned to be independent of the political process in Washington. That provides an important source of stability and leadership in the short-run.

Against a backdrop of stable macroeconomic fundamentals, we at Russell Investments like buying significant dips like this one and prefer non-U.S. assets at this time. We encourage investors to remember that however radical this presidential change may seem, the United States is a big place with a large and diverse economy. And, as Brexit proves, populism is becoming a driving force in global politics today. We don’t think one person—even the president—is positioned to help send the markets permanently off the rails. Savvy investors should look for opportunities as the political environment settles.

Remember it was only in June that the Brexit vote through markets into temporary turmoil, only to rebound strongly within days. Brexit, Grexit, Chinese Stock Market Bubble, GFC, Subprime Mortgages Crisis, Dot-Com Bubble, Asian Financial Crisis and Black Monday are just some of the crises and bubbles to impact on investors over the past 30 years. With financial crises dating back to 3^rd Century Roman Empire and the infamous Tulipmania bubble of the 17^th Century, these types of events are nothing new for investors.

Focus on what is within your control. You can’t control markets. The only thing you can control is the level of diversification in your portfolio, the quality of your strategy and your discipline in investing for the long term.

Remember: risk is the only thing you are guaranteed when you invest. Invest wisely and don’t let yourself get caught up in behavioral biases.

If you are concerned about your portfolio or retirement savings or need help managing your investments, give our Senior Financial Advisor, Sam Campbell, a call on 02 6883 2200 or email him at *protected email*.

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Great Britain is not part of the currency union of the EU, but enjoys other benefits that are associated with EU membership such as free trade, deregulated access to European markets, easier labor mobility and visa-free travel.

What will Brexit mean for Great Britain & the EU?
Brexit is likely to be a drawn out process and pose many challenges for both Great Britain and the EU. With the EU accounting for over 50% of Great Britain’s international trade, both economies are likely to be impacted. Credit Rating agencies have already warned Great Britain’s credit rating is likely to be downgraded, with the likely result being higher interest rate spreads, albeit interest rates in absolute terms may fall over the short term. An economic downturn in Great Britain may follow.

Contagion, both in financially and politically, is now a major concern, as the vote has the potential to trigger a movement to reverse the last 30 years of globalization.

The Economist¹ provides a snapshot of the issues:

The tumbling of the pound to 30-year lows offered a taste of what is to come. As confidence plunges, Britain may well dip into recession. A permanently less vibrant economy means fewer jobs, lower tax receipts and, eventually, extra austerity. The result will also shake a fragile world economy. Scots, most of whom voted to Remain, may now be keener to break free of the United Kingdom, as they nearly did in 2014. Across the Channel, Eurosceptics such as the French National Front will see Britain’s flounce-out as encouragement. The EU, an institution that has helped keep the peace in Europe for half a century, has suffered a grievous blow.

Managing the aftermath, which saw the country split by age, class and geography, will need political dexterity in the short run; in the long run it may require a redrawing of traditional political battle-lines and even subnational boundaries. There will be a long period of harmful uncertainty. Nobody knows when Britain will leave the EU or on what terms.

What will Brexit mean for my portfolio?
Unfortunately, events like Brexit occur all too often and yet portfolios continue to make money over the long term in spite of the volatility that ensues. Strategies such as diversification and active management come to the forefront in times of uncertainty, as discussed by prominent international fund manager, MFS²:

This sort of environment can create opportunities for investors. We are long term in our focus, and we’re very careful not to confuse the local economy and politics with markets. We invest in international and global businesses, and … [some] of the impacts of the Brexit vote may already be reflected in [share] prices. Against this more volatile backdrop, long-term inefficiencies may emerge. There are great businesses that have been hit hard in the short term, and there are others where risks have increased substantially. This is the type of environment where long-term active managers would be expected to add value. After all, volatility should be our friend over the long term. In fixed income, we continue to look for opportunities where valuations have become dislocated. We’re going through our names and sector exposures, deciding where we want to add or reduce risk. We’re not rushing, as we’re mindful of challenges around liquidity in the near term. We’re largely taking a wait-and-see approach, awaiting improved liquidity. We have already identified specific credits and sectors, so we can move quickly when the environment is conducive to adjusting portfolios appropriately.

Brexit, Grexit, Chinese Stock Market Bubble, GFC, Subprime Mortgages Crisis, Dot-Com Bubble, Asian Financial Crisis and Black Monday are just some of the crises and bubbles to impact on investors over the past 30 years. With financial crises dating back to 3^rd Century Roman Empire and the infamous Tulipmania bubble of the 17^th Century, these types of events are nothing new for investors.

Focus on what is within your control. You can’t control markets. The only thing you can control is the level of diversification in your portfolio, the quality of your strategy and your discipline in investing for the long term.

Remember: risk is the only thing you are guaranteed when you invest. Invest wisely and don’t let yourself get caught up in behavioral biases.

If you are concerned about your portfolio or retirement savings or need help managing your investments, give our Senior Financial Advisor, Sam Campbell, a call on 02 6883 2200 or email him at *protected email*.

 
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It is important to note, any changes proposed in the Budget are not law until they pass through Parliament. Over the past few years, getting changes approved by Parliament has proved difficult. With an election looming, the proposals are unlikely to even make it to Parliament for 3 months or more.

Please do not hesitate to contact Luka Group on 02 6883 2200 to discuss any points that affect you.

Key Superannuation Changes

The 2016 Budget has included the most significant changes to superannuation since 2007.  Importantly, all but one of these measures come into force from 1 July 2017, meaning you have over 12 months to make any required adjustments to your strategies.

Key Taxation Changes

Key social security changes

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