RUNNING A HOME BUSINESS: ARE YOU COVERED?

June 26, 2017 By Complete Financial Solutions

Setting up a business at home can be extremely rewarding, especially if it gives you more time to spend with family. But without the financial safety net an employer can provide, it’s vital that you have the right types of insurance in place to cover all eventualities.

Running a business out of your home certainly has its perks. As well as the flexible working hours, think of the time and money you can save on commuting. And don’t forget the comfort and convenience of being able to work in your pyjamas.

But what happens if someone gets injured in your home office? Or if a burglar steals your work laptop? Are you financially covered in the same way you’d be if these things happened at an external workplace?

If you or someone else in your household is running a home business, it’s a good idea to make sure you’re protected against the unexpected. Here are some worthwhile insurance options to consider.

Protecting your business

While your contents insurance might protect the valuable items in your home, it may not cover specialised work items like tools or IT equipment. These can be expensive to repair or replace, and your work can really be held up if you don’t have the cash to fix them. So you might want to consider specific insurance that can cover the costs of getting your equipment back up and running.

And when your home is also your workplace, you’re responsible for anyone who comes on site for business reasons. Public liability insurance protects you if a customer or supplier gets injured or has their property damaged while at your home.

If your business sells physical goods to customers, then you’ll want to consider product insurance as well. This is to cover the costs of compensation if someone gets injured from using one of your products. Litigation can be expensive, so make sure you’re adequately protected against the risk of being sued.

Protecting your staff

If you’re running your business with someone else, including a spouse or family member, then you need to think about what would happen if one of you became seriously ill or injured – or even passed away. Unfortunately, when a small business loses a staff member, it can often signal the end of the whole organisation.

Key person insurance enables you to take out life cover for a partner or employee, with the business named as the beneficiary. This means the business receives a payout if that person dies or becomes incapacitated. The money can then be used to compensate for the loss and keep things running until a replacement person can be found.

And don’t forget, if you have any employees – whether they’re employed on a full-time, part-time or casual basis – then it’s compulsory to take out a workers compensation policy that covers them. This insurance goes towards the costs of benefit payments and medical expenses if a staff member suffers a work-related injury or illness.

Protecting your loved ones

If you’re self-employed, you need to think carefully about how you and your loved ones would be impacted financially if you were unable to work for a while.

That’s where income protection insurance comes in. If you get sick or injured and can’t work for an extended period, this insurance will provide regular payments to cover your loss of earnings until you get back on your feet.

And if you’re starting up a business, what better time to review your life insurance arrangements? By making sure you have the right level of cover, you’ll have comfort in knowing your loved ones will be financially secure if you’re no longer around to take care of them.

Remember, your financial adviser is the best person to guide you through your options and make sure you have the right types of cover for your business and your family.

MAKE SURE YOU’RE AOK FOR EOFY

June 26, 2017 By Complete Financial Solutions

How do you best prepare for the end of the financial year? Adopt some of this advice and it could make a real difference to your financial position.

Usually as we approach the end of financial year (EOFY) we begin thinking seriously about tax effective spending and investing, extra concessional contributions to superannuation and financial spring cleaning.

It’s often the only time of year that we know how much we’re able to afford in terms of extra super contributions. EOFY is also a great reminder to take a step back and check how you’re going in terms of savings, debt, investments and more.

But how do we best take advantage of this valuable urge to get our financial affairs in order? The best way to start is to be fully across your financial position in the lead-up to EOFY. This helps you avoid financial shocks and helps you make informed decisions.

Don’t be afraid to ask yourself questions. How much super have you contributed this financial year? How much are you allowed to contribute? How much cash do you have? What expenses are coming up and what can you pre-pay? What are your debt levels?

It’s wise to avoid getting too close to the end of financial year and realising you could put some extra super away before June 30, only to discover it’s too late as it had to be done through salary sacrifice and you may only have one pay period left to do it.

What’s even worse is when you get to the end of June and realise you should have stopped salary sacrifice a month or two earlier because you’ve exceeded your contribution caps and now have to pay a penalty.

This is the time of year to begin a regular financial health check regimen. If you’ve got a savings, investment, superannuation or repayment plan for instance, then it’s a good idea to write down at least once a year a summary of your overall financial position. Even better, do it monthly. How much do you have in the bank? How much do you owe on your credit card? How much has your mortgage been paid down? What are your investments worth? How are you tracking compared to last month or last year etc.?

Writing down and keeping the results means you can constantly track your performance, identify when your strategy is not working and ensure you are always on the way to your desired goal. EOFY is the perfect time to kick-start such a discipline as each year, at the same time, you will be reminded to re-visit your financial health check.

It’s also important to seek financial advice in the lead up to EOFY. Your financial adviser will be aware of the latest regulations and policies, especially around the topics of superannuation, concessional caps and other considerations.

There is a lot that can be done leading up to the end of the financial year that can improve your position, especially if you have first developed an understanding of what your position is and how you want that to change. Don’t be afraid to seek advice from your financial adviser and to ask the right questions from the right person.

Making the dream purchase a reality

May 22, 2017 By Complete Financial Solutions

We all know the feeling – there’s a major purchase we want to make, but we’re worried it will break the bank. Whether it’s a luxury car or a hard-earned holiday, that extra expense seems just out of reach.

The good news is, there are plenty of alternatives to making an outright purchase upfront. And depending on what you’re in the market for, you might find a practical solution that won’t leave you strapped for cash.

Here are some creative ways you may not have considered to pay for a big-ticket item.

Piece by piece

When you see something you love, it’s tempting to think you need it then and there. But if you’ve got a little patience – and the item isn’t a necessity – then a layby option is a great way to make payments more manageable.

Here’s how it works: the retailer puts the item aside, making sure that it won’t be sold to someone else, while you pay off the balance bit by bit. Normally you have to hand over a deposit and then keep making regular payments that you can afford, until it’s yours.

If you really don’t want to wait until you’ve paid off the full item, some suppliers offer ‘own now, pay later’ options. This allows you to take home the item immediately and then pay it off in regular instalments. In this case, you may be charged interest over time, so it’s always a good idea to shop around first to get the best deal – you might even find a company that offers 0% interest for the first six or 12 months.

Borrowing to buy

For a major purchase that’s essential to your daily life – such as a family car or home repairs – it might be worth considering a loan or some other form of financing.

If you’re a homeowner, another financing option might be to unlock the equity in your home. Equity is the difference between the market value of your property and the amount you still owe on your home loan. This effectively allows you to borrow money against the value of your home, using your property as security. The best part is, you don’t necessarily have to use the money for home-related expenses, so you can choose what to spend it on.

Your financial adviser can help you with budgeting and refer you to a lending specialist or broker if required. They can also help set up a manageable repayment plan so you don’t end up falling behind and getting stuck in a debt spiral.

Sharing is caring

Think you can’t afford a holiday? Think again. If you haven’t heard about timeshare, then you may be in for a treat. Basically, it’s a way of owning the rights to a property for a specific amount of time each year without having to buy the whole property itself. In effect, you co-own the property with all the other shareholders and you pay a fixed amount each year – which is usually cheaper than paying for a holiday rental. That way, when you’re not using the property, someone else is.

In the same way, boat shares are available for those who prefer to spend their leisure time on the water. Instead of co-owning a holiday property, you co-own a boat and make bookings for when you want to use it. You could even apply this concept to other items that you only use occasionally, and team together with a group of friends to own it jointly.

Living in a renter’s paradise

Ever wondered why you keep buying items that err on the expensive side – like household appliances or whitegoods – when you end up having to replace them every few years?

In some cases it may be worth renting rather than owning, especially for things like your flat-screen TV, which you might want to upgrade when a newer model comes out. Plus in many cases, the rental supplier will take care of any repairs if the item breaks down, saving you money on maintenance.

But before you make any major financial decision, it’s always worth consulting your financial adviser. They can help you work out if your purchase fits within your budget and savings plan, and how you can best manage the repayments – whether you’re renting, borrowing, timesharing or paying instalments.

Want to buy something big but not sure you can afford it? Speak to us about some alternative solutions that won’t leave you strapped for cash.

Politics vs the Economy

May 10, 2017 By Complete Financial Solutions

Economics overview

Australia: The Reserve Bank of Australia (RBA) Board met on 4 April and as widely expected, left the official cash rate on hold at 1.5%. At the time of writing the RBA also left the official cash rate on hold at its 2 May 2017 meeting. There has been no change in the official cash rate since August 2016.

The RBA continues to balance three key risks in the economy for their monetary policy deliberations; the outlook for inflation, the strength or otherwise of the labour market and household financial stability.
In the May statement accompanying the on hold decision it was clear that the RBA is not contemplating moving interest rates again soon, in either direction.
Q1 17 inflation data was released in the month, and rose by 0.5%/qtr, a touch below consensus expectations at 0.6%/qtr, and the same increase as seen in Q4 16. This took the annual rate of inflation up to 2.1%/yr from 1.5%/yr in Q4 16. This sees the rate of Headline inflation move into the RBA’s 2%-3% target range for the first time since Q3 14.
The main price pressures in Q1 17 came from automotive fuels (+5.7%/qtr), medical and hospital services (+1.6%/qtr) and new dwelling costs (+1.0%/qtr). These price rises were partially offset by falls in furniture and household equipment/services (-1.0%/qtr) and recreation & culture (-0.7%/qtr).
Perhaps more importantly, the two measures of underlying inflation both also rose close to expectations. The trimmed mean measure rose 0.5%/qtr with the weighted median up 0.4%/qtr. This took the annual rate of underlying inflation up to 1.8%/yr, from 1.5%/yr at the end of 2016.
The housing market saw more moderate gains in April, with month end figures from CoreLogic showing capital city home prices rose 0.1%/mth and 11.2%/yr. Prices for detached houses were stronger in Sydney (+0.2%/mth) and Melbourne (+0.5%/mth) while unit prices were weaker in Brisbane. Perth prices fell 1.0%/mth and continued their run of recent weakness. Overall house prices did show more moderate gains in April verus recent months, post the step-up in macro prudential measures announced in March and recent increases in investor mortgage rates.
The NAB business survey for April showed a strong gain in business conditions, up to +14, from +9, well above the longer-term trend, although there was a low response rate from Queensland due to Cyclone Debbie. Business confidence fell from +7 to +6 over the month.
The March labour market report showed the unemployment rate hold steady at 5.9% in the month. There were gains in employment of 60.9k, although there were questions raised around some sampling distortions in the month. The positive aspect of the report were strong gains in full-time employment, +74.5k, with part-time job losses at 13.6k.

US: The US Federal Reserve Open Market Committee (FOMC) did not meet in April with the next meeting scheduled for 2-3 May 2017. No change in the Federal Funds rate is expected at this meeting after the FOMC lifted the Fed Funds rate at its March meeting. An interest rate hike in June is around 70% priced in by markets.

The news flow in April centred on President Trump’s plan for tax reform and the need form for Congress to pass a spending bill to keep the government funded till 30 September 2017.
On 26 April 2017, President Trump through economic adviser Gary Cohn and Treasury Secretary Steven Mnuchin announced a list of objectives for tax reform. The main objectives included; cutting the federal income tax rate to 15% for corporations, small businesses and partnerships of all sizes, a one-time repatriation tax of 10% on corporate earnings currently offshore, the top individual tax rate would also be lowered to 35% from 39.5% and there could also be the removal of several high income taxes such as estate taxes and the alternative minimum tax.
However there were limited details on how these tax changes would be funded and the timetable for legislation around tax reform.
Congress were also required to pass a spending bill to fund the government until 30 September 2017. However only a stopgap bill was passed that gave Congress one week to agree to a spending bill. There were reports on 1 May a deal had been reached to fund the government through the remainder of the US fiscal year with President Trump indicating he would sign the bill despite it providing no provision for a number of his key policy initiatives, such as the border wall with Mexico.
Employment was weaker than expected in March, with just 98k payrolls added, compared to 219k in February. Bad weather likely impacted the result, with a severe winter storm driving a higher than normal impact on the inability work over the month. The unemployment rate fell to 4.5% (from 4.7%). Average hourly earnings retreated to 2.7%/yr, from 2.8%/yr and the underemployment rate also fell to 8.9% from 9.2%.
Inflation data for March was weaker than expected, falling 0.3%/mth, taking the headline inflation rate down to 2.4%/yr, from 2.7%/yr. This was the first monthly fall since February 2016 and was largely due to a one-off fall in wireless phone services, and weakness in apparel prices. Core inflation fell 0.1%/mth, taking the annual rate to 2.0%. The Fed’s preferred measure of inflation, the Core Personal Consumption Expenditure Index, fell 0.1%/mth with the annual rate down to 1.6%/yr from 1.8%/yr.
There was also weakness in a number of other economic indicators in April. The ISM Manufacturing Index fell to 54.8, from 57.2, with falls in orders and employment. The first estimate of Q1 17 GDP came in below expectations at 0.7% on a seasonally-adjusted-annualised-rate (SAAR), compared to market expectations of 1% and 2.1% in Q4 16 on a SAAR basis. The weakness largely came through a negative contribution from inventories and government consumption.

Europe: The European Central Bank (ECB) met on 27 April 2017 with no change to policy. The Governing Council continues to expect the key ECB interest rates to remain at present or lower levels for an extended period of time, and well past the horizon of net asset purchases.

As of April, the ECB will be purchasing €60bn per month of securities until the end of December 2017, or beyond if necessary.
The ECB made little changes to its overall view, with expectations that this will be updated in June when new staff forecasts will be available. Risks to the economic outlook were seen to have “further diminished”, but remain to the downside. There was no change to the assessment of inflation with “underlying inflation pressures remain subdued and have yet to show a convincing upward trend.”
In April, the estimate for headline CPI was 1.9%, up from 1.5%/yr in March. Core CPI also rose, now at 1.2%/yr, up from 0.7%/yr.
The focus in Europe in April were on the first round of the French Presidential elections. Consistent with pre-election opinion polls, the first round of the French Presidential election saw the centre-left Independent candidate Emmanuel Macron and the far-right Marine Le Pen win the two largest shares of the vote – which included a higher-than-expected voter participation rate of around 77%.
Macron and Le Pen will now fight it out in the second round vote, scheduled for Sunday 7 May. Significantly, this will be the first time in modern French political history that neither of the two major traditional political parties in France (ie. the Socialist Party and the Republican Party) will be represented in the second round of the Presidential election.
UK: The Bank of England (BoE) did not meet in April. The next meeting will be held on 11 May.
A speech by board member Michael Saunders during the month suggested he was more optimistic on economic growth “growth seems more likely to exceed the external consensus…than to undershoot” and “it is natural for policy to respond to the changing outlook if needed”.
Prime Minister Theresa May called a surprise snap election for 8 June, well ahead of the scheduled end of her term in 2020 and despite an earlier promise not to call an early election. This should help strengthen and shore up support for her Brexit plan.
Late in the month the European Council published a set of guidelines to govern the EU’s Brexit negotiations with the UK. In short the principle to the strategy is “a non-member of the Union that does not live up to the same obligations as a member, cannot have the same rights and enjoy the same benefits as a member”.
NZ: The Reserve Bank of New Zealand did not meet in April, with the next meeting scheduled for 11 May.
Q1 17 CPI data was released, with inflation rising 1.0%/qtr, compared to consensus of 0.8%/qtr and prior of 0.4%. Annual inflation rose to 2.2%/yr, compared to consensus of 2.0% and prior of 1.3%. Much of this lift is due to volatility in fuel and food and returns inflation to within the RBNZ’s target band.
Canada: The Bank of Canada (BoC) met on 12 April 2017. At this meeting the policy interest rate was left on hold at 0.5%, where it has been since mid-2015. The BoC highlighted GDP growth should be 2.5% in 2017 and just below 2% in 2018 and 2019. Despite the strength of recent data, significant uncertainties remain and therefore the current stance of monetary policy remains appropriate.
Japan: The Bank of Japan (BoJ) met on 27 April 2017 and left its policies intact, as was widely expected, with the Policy Balance Rate on hold at 0% and 10-year yield target at -0.10%.
The BoJ in updated forecasts expects to achieve the price stability target of 2% in the middle of the projection period – around fiscal 2018.
April inflation data showed headline inflation at 0.2%/yr and underlying inflation (ex fresh food and energy) at -0.1%/yr.
China: Q1 17 GDP data was released with growth of 6.9%/yr recorded, slightly ahead of expectations and Q4 16’s reading of 6.8%. Improved global demand, domestic infrastructure spending and strength in the property market helped the higher than expected reading.
Other economic data also showed upside surprises, with Industrial Production (+7.6%/yr), Retail Sales (+10.9%/yr) and Fixed Asset Investment (+9.2%/yr).
Inflation data released for March continued to show an easing of pressures that had built up at the start of the year. Inflation for the year to March was 0.9%/yr, up from 0.8%/yr in February, but down from 2.5%/yr in January.

Australian dollar

The Australian dollar was weaker over the month, with falls in bulk commodity prices, particularly iron ore leading to the falls. There was also a shift lower in geopolitical risks with the election in the UK and outcome of the first round of the French election leading to the Australian dollar to fall 3.1% against the GBP and 4.0% against the EUR.
Against the US dollar, the Australian dollar fell 1.8% to $US0.7488.
The AUD was also weaker against the Yen (-1.7%) but rose 0.2% against the New Zealand dollar.

Commodities

Commodity prices were predominantly lower in April, led by metal prices, while some energy prices, including coal and US gas prices were higher.
The price of West Texas Intermediate (WTI) Crude oil finished the month at $US49.3/bbl, down 2.5%/mth, while the price of Brent Crude oil was down 3.2% to $US52.1/bbl. The main catalyst were strong imports into the US supporting oil inventory levels.
Gas prices were higher with the US natural gas Henry Hub futures price up 2.2% $US3.16/MMBtu and after a sharp 23% gain in March.
Iron ore prices continued to retreat in the month with the spot iron ore contract (Qingdao 62% Fe fines) down by 14.4% to $US68.8/t in April, down from the recent peak of $US94.9/t in February. The recent volatility in the iron ore price is largely due to speculation and trading rather than fundamentals.
Coal prices rose in April, with the price of coal at the Newcastle Coal terminal rising 3.5%, largely as a result of weather impact from Cyclone Debbie in Queensland.
Base metals were mixed with the London Metals Exchange (LME) Index down by 2.7%. Nickel was down 5.7%, elsewhere aluminium (-2.6%), zinc (-5.3%), lead (-3.9%) and tin (-1.4%) all fell. Copper was also weaker, down 1.7%.
The spot gold price rose 1.5% to US$1,268.3/oz.

Australian equities

The S&P/ASX 200 Accumulation Index rose by 1.0% during April. The strongest performers were Industrials (+4.3%), IT (+4.1%), Health Care (+3.2%), Utilities (+3.1%), Property Trusts (+2.6%) and Financials (+1.9%).
The worst performer by some margin were Telcos (-9.9%), which were led lower by Telstra, TPG Telecom and Vocus Communications – the worst performer in the ASX 100 during April. Energy (-0.6%) and Materials (-0.2%) edged lower, as weakness in commodity prices, especially iron ore, continued.

Listed property

The S&P ASX 200 A-REIT index rose by 2.6% in April in AUD terms. Diversified A-REITs led the gains and climbed 3.4%, helped by robust performance from residential business segments.
The best performing A-REITs included industrial A-REIT Goodman Group (+4.8%) and diversified A-REIT Stockland (+4.5%). Goodman Group continues to see keen demand for its high quality logistics facilities, driven by the growing popularity of e-commerce. This is consistent with lacklustre recent sales figures reported by retail A-REITs. Stockland gained as investors focussed on strong results from its residential business, including a 24% increase in net deposits for the first nine months of this financial year, compared to the same period a year ago.
The worst performers included Cromwell Property Group (-1.6%) which made an indicative, non-binding proposal to acquire Investa Office Fund for A$4.85.
Listed property markets offshore also gained in April. The FTSE EPRA/NAREIT Developed Index (TR) climbed by 1.1% in US dollar terms. The UK was the best performing market, with a gain of 8.5%. The worst performing market, Japan, finished the month 0.4% higher.

Global developed market equities

Global developed equity markets began the month cautiously with no shortage of geopolitical risks including French elections, North Korea, Syria and the unwinding of optimism around President Trump’s policy timeline. However the outcome of the French election towards the end of month saw gains in most global developed equity markets.
The International Monetary Fund (IMF) upgraded its global economic growth forecasts. Global growth of 3.5% is expected in 2017 and 3.6% in 2018. This compares to 3.1% in 2016. The upgrades are broad based amongst advanced and developing economies, and through trade and manufacturing.
The MSCI World Index was up 1.3% in US dollar terms in the month and 3.6% in Australian dollar terms.
The VIX Index, a market estimate of future volatility of the S&P500 Index finished the month at 10.82 yet moved in a wider range given the geopolitical risks in the month, it peaked at 15.96 on 13 April before falling into month end.
In the US, the S&P500 (+0.9%), the Dow Jones (+1.3%) and the NASDAQ (+2.3%) all rose. The NASDAQ continues its outperformance, driven by the technology sector, particularly Google which rose 9.0% in the month.
Equity markets in Europe performed well as geopolitical risks eased in the month. The large cap Euro Stoxx 50 Index rose +1.7%. Italy (+0.6%), France (+2.8%) and Germany (+2.4%) all rose. The FTSE100 fell 1.6% with the snap election called in the month. The pound rose sharply on the announcement, with it finishing 3.1% higher against the US dollar in April.
Asia markets were stronger, with the Japanese Nikkei 225 up 1.5%. The other major markets also moved higher; Hong Kong (+2.1%) while Korea surprisingly rose 2.1% despite rising geopolitical tensions with North Korea.

Global emerging markets

Emerging market equities had another positive month on improved global growth and falling concerns around President Trump’s more controversial trade policies. The MSCI Emerging Market Index was up 2.0% in USD terms and 4.3% in AUD terms.
MSCI EM Latin America (-0.4%) was weaker with lower commodity prices. While MSCI EM Asia ex Japan gained 2.1% over the month. Meanwhile the Shanghai Composite Index was down 2.1%, despite better economic data.
The MSCI EM Europe, Middle East and Africa rose 3.9%, with strong gains in Turkey post the referendum that increased the powers of President Erdogan.

Global and Australian developed market fixed interest

Monetary policy and US political uncertainty took a back seat in April as geopolitical risks and the first round of the French election were front and centre in the month. Rising tensions between the US and North Korea over missile testing and the US retaliation on Syria’s chemical weapons dominated headlines. The uncertainty largely led to a risk-off tone in markets early in the month before receding after the French election result.
Against this backdrop, bond yields in Europe traded in a wide range but moved little month on month with the 10-year German bunds down 1 bps to 0.32%. US yields traded in a similarly large range given the geopolitical conflicts and 10-year yields ultimately fell 11 bps in the month to 2.58%. UK 10-year gilts were down 5 bps to 1.09%. Japanese bond yields fell 6 bps in the month to 0.018%.
Early in the month the spread between US and Australian 10-year yields compressed to a 16-year low of 19bps. This was short-lived and Australian 10-year bond yields soon rose with global yields, finishing the month at 2.58%, down 13bps.

Global credit

Global investment grade credit spreads reverted back to mild tightening in the month with the majority of this coming after the French election results.
The broader risk-on tone given the lack of volatility priced in to markets saw Investment Grade credit continue to provide an opportunity for investors. There was robust supply in the month accordingly.
Specifically the Bloomberg Barclays Global Aggregate Corporate Index average spread moved 3 bps tighter to 1.17%. US credit moved 2 bps tighter, with the Bloomberg Barclays US Aggregate Corporate Index average spread closing at 1.10%. In Europe, the spread on the Bloomberg Barclays European Aggregate Corporate Index was 7 bps narrower to 1.11% on the back of the French election results.
US high yield credit spreads reacted notably to the change in sentiment following the French election results with the spread on the Bank of America Merrill Lynch Global High Yield index (BB-B) tightening from a high of 3.27% mid-month to 2.99% by month end, down 13 bps on the month. In addition, the high yield market continues to be impacted by downgrades particularly in the energy and mining sectors.
Australian credit spreads moved a little tighter in the month largely ignoring the volatility in outright yields and the widening of global credits spreads witnessed last month. Specifically the average spread on the Bloomberg Australian Corporate Index moved 4 bps tighter to 101 bps.

5 SUPER CHANGES – & HOW TO PREPARE FOR THEM

April 19, 2017 By Complete Financial Solutions

The countdown to super reform has begun, with new rules set to take effect on 1 July. If you haven’t thought about how your super might be impacted by the changes, now’s the time to get ready. Here are some of the more important changes you need to know about.

In last year’s Federal Budget, the government proposed a wide range of reforms to Australia’s superannuation system. In fact, these are the most significant changes to super of the last 10 years. Although not all the proposals have been legislated, some significant ones were passed by parliament late last year and are due to take effect on 1 July.

Here’s a breakdown of five of the most important changes – and what you can do to prepare ahead of them.

1. Non-concessional contributions

There’s a limit to how much you can put into your super through after-tax or ‘non-concessional’ contributions each financial year. This is currently $180,000 per year, and you can only make these types of contributions up to the age of 65 – or 74 if you’re still working.

If you’re under 65, you can also apply the ‘bring-forward’ rule. This allows you to make up to three years’ worth of non-concessional contributions ($540,000) at any time during a three-year period.

But on 1 July, non-concessional contributions will be capped at $100,000 a year – or $300,000 over three years. If these contributions are a key part of your super strategy, you should speak to your financial adviser about how to make the most of the current caps this financial year.

If you’ve already triggered the bring-forward rule but haven’t used up all of your $540,000 cap yet, your remaining cap will be reassessed down on 1 July to take into account the reduced annual cap.

Also, from 1 July onwards once you have saved $1.6 million in super you won’t be able to make non-concessional contributions any more. In addition, your ability to bring forward contributions will also be restricted once your total super savings exceed $1.4 million. So it’s worth planning ahead to make sure you don’t go over the limit.

2. Concessional contributions

Concessional contributions are the amounts you put into super before tax has been taken out. They include Super Guarantee from your employer and any extra amounts salary sacrificed into super.

At the moment, there are two different caps for concessional contributions before extra tax applies: $30,000 a year if you’re under 50 and $35,000 a year if you’re aged 50 or over. But on 1 July, the concessional cap will go down to $25,000 across the board for everyone, regardless of your age.

If you’re between 65 and 74, you’ll still need to work at least 40 hours during a 30-day period before you can make concessional contributions for that financial year. And once you turn 75, your super fund will generally only accept contributions from an employer.

From 1 July 2018 onwards, if you don’t use the whole concessional cap in one financial year, the unused amount can be carried forward to the next year if your total super balance is less than $500,000.

So, for example, if you only make concessional contributions of $20,000 in the 2018-19 year, then you will be able to carry forward your $5,000 of unused cap to the following financial year – bringing your total cap for that year up to $30,000. You can keep bringing forward your unused caps each year for up to five years.

High income earners should also be aware of an upcoming change to how concessional contributions are taxed. Most people’s concessional super contributions are taxed at 15%, but if your total income (including your concessional super contributions) exceeds $300,000, part or all of your concessional contributions are taxed at 30% instead. As of 1 July 2017, this threshold will be reduced from $300,000 to $250,000.

3. Transfer balance cap

A new ‘transfer balance cap’ will be introduced from 1 July, limiting the amount you can have in the tax-exempt pension phase of your super. So, if you’re planning to retire and set up a pension from your super to draw an income stream, you can only use a maximum of $1.6 million to do so.

And this cap doesn’t just include new pensions. Even if you’re already drawing a pension as an income stream, before 30 June you’ll need to make sure your total balance in the tax-exempt pension phase isn’t over $1.6 million.

If it is, you’ll have to either withdraw or move any excess amount back into the accumulation phase of your super, where its earnings will be taxed at 15%. But if you don’t do it in time, you’ll have to pay a tax penalty and the ATO will make you move the excess anyway. So it’s important to get your financial adviser’s guidance before 30 June if you think you may be over or getting close to this cap.

4. Transition-to-retirement pensions

As you approach retirement, it’s possible to start drawing a pension from your super while you’re still working. Once you’ve reached your ‘preservation age’ but you’re under 65, you can set up a tax-free income stream from your super as part of a transition-to-retirement (TTR) strategy. If you’re working full-time and salary sacrificing, this can be a tax-effective way to boost your super in your final years of work.

But from 1 July, any earnings on the assets that support TTR pensions will no longer be exempt from tax. Instead, they’ll be taxed at the same rate as assets in the accumulation phase (up to 15%).

If you’re currently using or are thinking about using a TTR pension as part of a strategy to boost your super savings, this strategy might not be as beneficial from 1 July. That’s why it’s worth asking your financial adviser whether a TTR strategy is still the best option for you.

5. Estate planning

A final thing to remember is that any changes to your super strategy may have a knock-on effect for your estate planning.

If you move assets out of the pension phase to stay under the $1.6 million transfer balance cap, then you’ll need to think about what will happen to these assets after you pass away.

For example, you might have to put a binding death nomination on money moved back to the accumulation phase, or else update your will to account for any assets you take out of super.

Your financial adviser can review your estate plan while updating your super arrangements, to make sure any changes are accounted for.