Future Financial Services
Future Financial Services Emu Plains - Penrith provides; Retirement Planning, Wealth Creation, Superannuation Advice & Insurance Planning Advice. We are a boutique financial planning firm, we are dedicated to providing personalised, easy to understand advice as our clients go through various life stages. Operating throughout Western Sydney, with bases in Penrith, Western Sydney.
Our knowledge and experience in relation to legislation and strategies surrounding superannuation, insurance, investments, taxation and Centrelink will enable us to provide you with quality advice to assist you achieve your financial goals. Alex McKenzie, the principle financial planner, has been operating as an advisor since 2002 and has assisted clients in varying situations for over 10 years.
Future Financial Services is a mobile service and is able to come to you and provide financial advice in the comfort of your home or place of business.
Future Financial Services Blogs
Interest Rate Risk - So what do we do about it?
It is no secret that house prices are extremely high at the moment and many average Australians are now carrying high levels of debt. We also have interest rates that are historically low so these debts are manageable for most. My concern is that these interest rates cannot possibly remain at these levels and when they increase will be able to continue to afford their repayments.
To demonstrate how interest rates will impact on cash flow, if we look at someone with a $500,000 loan, very common place in this day and age, for every 1% that interest rates rise, mortgage repayments increase by $5000 a year or nearly $100 a week.
Given that the long term average interest rate is a little over 7%, and many banks are offering rates in the low 4’s at the moment, it seems clear that the rates will rise, if they return to long term averages, that borrower above with a $500,000 mortgage will have to find another $15,000 a year.
Federal budget changes to Superannuation - the financial planning impact of these changes
The federal budget included significant changes to the superannuation system; I thought I’d send all my clients a quick outline on the financial planning impact of these changes.
Limit of Contribution Levels
A life time Non-Concessional contribution (after tax) limit of $500,000 has been introduced; this includes all contributions made since 1 July 2007. This replaces the current yearly limit of $180,000 per annum that also allowed for a 2 year “bring forward” provision. This will reduce the capacity to build assets outside the superannuation system and make contributions once nearing retirement.
The concessional limit has been capped at $25,000 per annum; currently the limit is $30,000 and $35,000 for those over 50. This will affect those nearing retirement trying to accelerate savings by contribution heavily. It also limits the extent we can use the TTR strategy.
These limits are further complicated, unused contribution cap can be used in later years for those with Superannuation balances under $500,000. It seems that the unused caps will be measured on a rolling 5 year basis.
At this point I have not been able to determine whether these limits are indexed, I’m sure these details will be released shortly.