Hopefully we all get a chance to rest and relax over the Christmas break – and this can be a good time to check your vital personal arrangements are in place, such as:
Every taxpayer needs decent life insurance, and superannuation can be the cheapest place to have this – as a bonus it doesn’t affect your personal cash flow as it is coming out of super contributions and earnings. In addition to life insurance, income protection insurance can be set up in or outside of super and if anything happens to injure you outside of work at least the major bills are taken care of while recovering.
As well as getting these set up, make sure they are regularly checked to make sure they are current and cover any changes to personal situations that occur in life. An out-of-date will is likely to be challenged, creating animosity and anger and delaying your intended recipients receiving their inheritance.
Have you ever changed employer? If you have, chances are you have multiple superannuation accounts. If you haven’t thought to roll the funds from the original account into the new account, you are missing out on savings and being charged multiple management fees. You should also look at the fund you are in and consider whether it is tailored to your individual situation and if it is getting you the results you desire. Rather than relying on your employer’s default fund, you can have them pay into a fund of your choice. Also, look at the level of savings you have in your fund and consider making additional payments yourself to boost your retirement savings. Estimates vary, but you may need anywhere from $500,000 to $1m dollars in your fund to enjoy a comfortable retirement.
If you have a mortgage, chances are you are still with the original provider. Make the beginning of 2014 the time that you look at the fees and interest rates you are paying, and consider whether you can get better rates elsewhere. This also applies to other debts like credit cards and personal loans. Additionally, you should look to roll smaller debts into your mortgage, as the rate is certain to be better.
By Jennifer Lowe