When it comes to managing your retirement finances, mistakes can be extreme costly. We suggest five financial faux pas you should rectify as soon as possible.
Lost super and savings
Changes to legislation have enabled the government to take control of money held in super, savings, shares and insurance accounts which has been untouched for a certain period of time. While this money is held by the Australian Tax Office (ATO) and will be returned with interest, claiming the money back can take a lot of time and effort. It’s important to ensure your contact details for any financial products you hold are up to date. If you think you may have ‘lost’ money being held by the ATO, then you should also start the search now.
Age Pension claims
Most people make a claim for the Age Pension as soon as they reach the age of eligibility; however, due to income and assets held, a percentage of these claims are rejected. Having been rejected once, and with their circumstances remaining unchanged, many people do not think to reapply. However, indexation of asset and income thresholds, changes to deeming rates, and the changes to thresholds for the Commonwealth Seniors Health Card, may mean that you are indeed now eligible to receive some form of concession or payment from Centrelink.
Over or under insured
Whether it’s private health insurance, home insurance or life insurance, premiums on such policies increase as we age. And while it’s tempting to decide you simply don’t need insurance any longer and cancel premiums, this can come back to hurt you in the longer term. A much more sensible approach is to regularly and systematically review the insurance policies you hold and calculate accurately what level of cover you need, and how much you can afford to spend to get it. There may be some compromises involved, but you’ll be surprised by how much you can save by getting it right.
Unfiled tax returns
As well as facing the possibility of a fine from the ATO, failing to file a tax return could mean that you are missing out on a much-welcome rebate. Taking advantage of tax offsets could deliver a mini-windfall, so make sure yours are up to date. Or if you don’t think you need to complete a tax return, check online.
Has it been a while since you updated your will? Has your chosen executor fallen out of your life? Do your chosen beneficiaries need updating? While time consuming and tedious, ensuring you have the correct documentation in place and that it’s up to date will help your family should something happen to you. A regular review of your estate planning arrangements could save your loved ones a lot of grief.
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