Investing in your forties can be challenging as often this will be both your peak earning and expenditure period for those with a mortgage and children. At this period in life, those with mortgages may be applying great chunks of their cash flow towards meeting debt repayments where their tax bills are also significant and consequential on their finances. This is the period where careers, family and lifestyle commitments overshadow investors and some tend to ignore their most efficient resources such as superannuation and any equity tied up in homes.
Our observations suggest that planning and investing in your forties is the best chance any investor can have to turn things around for a better long term. At this stage, investors have about two decades to implement an investment strategy to give themselves and their portfolios sufficient time to evolve. If having a clear written plan based on your objectives and goals can be ideal, this is the period it may be needed the most.
Talk to our professionals for an objective financial health assessment. We help our investors understand what they can do to improve their overall financial situation. We devise strategies focused on improving cash flow, debt reduction and tax minimisation. Reviewing super funds at 40 is of high importance as investors need to know whether they are on the right track or should be changing direction with their superannuation savings. Our professional services and advisers can provide you comfort in knowing that you are on track.
preferred asset classes of equities, fixed interest, and direct property-based investments.
. we are comfortable using investment vehicles like Superannuation, SMAs, SMSF, Family Trust, and other tax-effective vehicles to reduce the tax impact on your investment returns and future capital gains
36% is the maximum you can spend on servicing total household debts, including housing and other loans such as cars, personal loans and, credit card debts. Most lenders apply these rules in assessing investors borrowing capacity on the assumption that anything outside these parameters can be difficult to sustain by an individual or a household.
To focus on paying down a mortgage quicker with strategies, we first should understand your cash flow and budget and have a clear indication of where your money goes. This exercise can reveal to homeowners’ insights about their finances that can be managed and used to create some surpluses that can be reapplied to the mortgage or investing. Investors should be discriminating between bad debt and good debt and should try not to use home equity for non-capital and non-income producing purposes.
Where we identify resources possible to invest, we can align them with your goals and objectives and work out a strategy to create a second or third income stream to create relief. All surpluses from the income we can generate from investments can be a combination of shares, properties and fixed interest which can help to pay off your mortgage quicker.
over 20,000 shares and ETFs across 23 global exchanges inclusive the ASX, managed portfolios, managed funds, and investment managers when providing them with investment solutions.
only two types of superannuation contributions. They are the concessional contribution (CC) that currently is capped at $25,000 and a non-concessional contribution (NCC) that is capped per individual at $100,000 in a financial year or up to $300,000 for three years when you trigger the bring-forward rule.
ANIG WM think of the loan as another form of contribution as it is a form of capital injection. For instance, if the maximum you can put into super in a form of CC is $25,000 and NCC is $300,000 per investor, what should we call a loan amount of $500,000 worth of borrowing through super? If we consider a $25,000 each CC contribution by a couple, it will take 10 years for a couple and 20 years for an investor to contribute $500,000 into super. What the loan allows investors to do is to bring forward their consumption to today.
A self-managed super fund (SMSF) is a tax vehicle that allows investors to invest in a tax-effective environment.
Investors can run a pension within an SMSF structure, making the vehicle quite suitable as a long-term financial planning tool. SMSF can help reduce the amount of tax paid by the fund by investing in assets that pay franked dividends and offsetting the attached imputation credits against the fund’s taxation liability.
An SMSF is a lower tax vehicle that operates on a fixed cost basis. The highest tax applied to an SMSF is 15%. Capital gains tax (CGT) is capped at 10% for assets held over 12 months. With about 20 years’ timeframe, an SMSF can be an efficient wealth creation tool for over 40 investors. The services of a qualified adviser can play a key role in guiding you to understand what the vehicle is, how that could potentially benefit you, and also your trustee/s obligation and ensure your SMSF remains compliant. Talk to an ANIG WM SMSF Auditor and see how we can help you.
Our observation is most investors or retirees will need to be generating about 60% to 70% of their pre-retirement income to be able to live a comfortable lifestyle in retirement. This means for a couple or single investor on a combined or individual after-tax income of $120,000 will need to be generating between $72,000 – $84,000 of passive income tax-free.
ANIG WM assumes the investor is no longer paying for a mortgage that can take up to 28% of income and also your children may no longer be dependent as child cost could consume up to 30% of income or more for those who may sent their kids to private schools.
This is because if you are used to earning a certain standard of income over 20 to 35 years of your working life, individuals get accustomed to certain habits and lifestyles that can be hard to break. So, if you are planning to maintain a similar lifestyle in retirement and to slowly dial down as you age then we believe the 60% to 70% is more reasonable.
So if by default a Life/TPD cover offer you $300,000 Life/TPD but your mortgage is over $700,000 excluding major lifestyle expenses, ask how you see yourself covering the difference in a life or disability event after you’ve receiving a payout for the $300,000?
Passing away without a Will (die intestate) is a situation that can cause more grief to most families at an already difficult time. A will can ensure you have your affairs structured that your wishes are met and assets are distributed to the right beneficiaries. To die intestate can potentially cause an inappropriate or disproportionate distribution of assets. The services of an estate planning solicitor are of high importance. Wills must be comprehensive. As such, the ideal situation is not found in an online, 10 minutes to complete, ‘will- kit’ Will. In most cases, such Wills do not necessarily deal with the complications associated with estate planning and very often are inappropriate.
A binding nomination is an important part of superannuation as super does not form part of an estate. To ensure that the right person receives the superannuation benefits you need to ensure a binding nomination is set up.
It takes two to pilot this right. Tap into our resources and expertise and experience the ANIG WM difference.