Recently, Michael caught up with a friend who works as an accountant. A long discussion about the two professions got Michael thinking: do listeners of the Money Over 50 podcast (and people in general) know the difference between an accountant and a financial adviser?
In the previous podcast we discussed ‘bolting it all together’ while you are still working – meaning getting everything in order financially before you retire. We gave the example of a couple who earn $90,000 each in the final 10 years of their working lives, and their ability to claim $113, 505 in personal tax returns if they make voluntary super contributions in that time. If we subtract the 15% earnings tax from this, it would leave a benefit of $64,155. There are other benefits the couple could tap into while they are working, such as spouse contribution and government co-contribution. There are many small things you can do while you work to chip away at growing a larger amount of money for your retirement.
We find that tax deductions are often the least understood area of finance. People often spend money simply because it’s a tax write-off. But what they don’t consider is whether that expense will help them in some way in the future.
In our 88th podcast, we made a statement about how you can turn $100 a week into $100,000 over 10 years by making voluntary contributions to your superannuation. The trick for most people, of course, is to find that sum of money each week and make sure they put it away.
There’s no such thing as a free lunch. An oldie but a goodie – especially when it comes to tax deductions. Often you hear people justify buying a product or service because it’s a ‘tax write-off’ – and while that may be true, it still comes at an expense. So while the purchase might reduce your taxable income, the funds to purchase still have to come from somewhere. And that somewhere is your (or your company’s) pocket.
We’ve thoroughly enjoyed recording the podcasts each week and we want to take this opportunity to thank all our listeners for joining us. We’ve always said that we would do the podcast even if we had just one listener, but we’re glad to see so many of you out there! Thank you!
A large part of what we do is taking the time to understand the legislation involved in the financials of Australians and figuring out ways for us to use it to the advantage of our clients.
The term “financial planner” is broad one, as there are many different areas a planner can specialise in, much like a doctor.
A big part of a financial planner's role is to minimise the tax you pay as much as possible, this even includes the tax your loved ones will on the assets you leave behind when you pass away.
Tax. It’s an unavoidable aspect of working.
Most people pay a lot of tax in their working life and don’t receive much assistance from the government in return.
So, when it comes time to collect the Age Pension it may feel like it’s your time to finally ‘get something back’.
Dallas Davison, Michael Hogue and Ali Hogue.