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HOW TO GROW YOUR SUPER AND GENERATE AN INCOME IN

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HOW TO GROW YOUR
SUPER AND GENERATE AN
INCOME IN RETIREMENT
Asset Management
& Superannuation
INTRODUCTION
The average superannuation balance for retirees in Australia in 2011 was $250,000 for men and
$145,000 for women1.
With most couples, who have paid off their home, currently requiring at least $40,000 pa in after
tax income, these super balances are insufficient to generate an adequate income stream in
retirement. Consequently, more and more retired Australians will be forced into greater reliance on
the social security system.
The purpose of this guide is to show working Australians how to grow their super so that in
retirement their super savings are capable of generating an adequate income stream for the
remainder of their lives.
For current or prospective retirees, we will explain and illustrate, with the assistance of historical
precedence, case studies, charts and diagrams, how investing in growth assets, specifically shares,
can provide you with greater returns than investing in “conservative” or “balanced” funds.
Further, with life expectancy rising we will demonstrate how the aged care system works and why
we need adequate funds in our later years to fund this.
We have also included a section on life insurance and estate planning.
HOW MUCH SUPER DOES THE AVERAGE AUSTRALIAN
NEED IN RETIREMENT?
According to the Australian Association of Super Funds, to provide for a comfortable lifestyle in
retirement and assuming partial receipt of an Age Pension, the lump sum figure currently required
by a couple at retirement is $510,000.
Assuming this lump sum was invested in a balanced fund that returned 6% net per year and where
an allocated pension of $3000 per month2 was drawn, this couple’s funds would be completely
depleted in 15 years. (see Chart 1)
Chart 1: $500,000 super
fund of 65 year old
couple in a balanced fund
returning 6% pa, taking a
$3000 per month allocated
pension, indexed at 5% pa.
A$
Years
That healthy 65 year old retirees, who utilized this strategy, could find themselves with no super
left in their latter years is extremely concerning. Currently in Australia, residual life expectancy for
65 year old men and women is around 84 and 87 years old respectively3 and these figures are
expected to increase in the future.
A key problem is that the average balanced fund, which is frequently promoted to retirees, relies
heavily on substantial cash, bond and term deposit allocations. Common features of these types
of investments include minimal or no capital growth and income generation entirely from interest.
One of the key inadequacies of these types of funds is that they fail to adequately mitigate the
effects of inflation and the rising cost of goods and services on retirees and their savings.
ABS - Survey of income and housing
1
indexed at 5% pa for inflation
2
ABS - Residual Life Expectancy at Age 65, 2012
3
Inflation – a “scourge” on purchasing power, especially for retirees
During our working lives, regular pay rises (never enough!) serve to offset the effects of inflationary
price rises. In retirement how can we still hope to offset these increases in relation to the cost of
living? Just think about how much the cost of utilities have increased over the past few years. The
answer is to invest in growth assets.
Growth Assets – a crucial “hedge” against inflation, especially for retirees
GROWTH ASSETS
Growth asset investment provides a double “hedge” against inflation. The first “hedge” is an
income stream that can be varied to counter the effects of inflation. Companies can increase prices
they charge for goods and services and therefore increase profits and dividends to investors and
similarly landlords can increase rents. The second “hedge” is that appreciation in the market value
of the property or share can lead to capital growth of the original asset.
PROPERTY
Many Australians have substantial equity in their homes. This equity can, in turn, be used to
purchase an investment property. Once the property is leased and rent is received, both the
interest on the loan and depreciation on the building can create tax benefits.
Over the past 10 years Australian residential property has produced annualised capital growth of
5.3%4, plus rent of say 4% making for a total return of just below 10% per annum. This is in a period
that included the GFC. Returns in previous decades have been much higher.
Key concerns when it comes to property investment include over gearing, heavy reliance on
the capital growth of the property (especially concerning given the current overvaluation of the
Australian residential property market) and a large financial commitment to a single or small
number of investments.
SHARES
Shares on the other hand provide greater diversification than real estate. One can own shares
in many stocks across many sectors of the market, where fractional ownership not only allows for
greater diversification but minimized investment risk.
Over the past 30 years shares on the Australian Stock Exchange (ASX) have shown long term
growth and returned an average of 11.1% pa5. (see Chart 2) Similar growth can be expected over
the next 30 years.
Australian share price movements
Chart 2:
100 years
price history
of the ASX.
(zoom in for details)
1900
1905
1910
1915
1920
1925
1930
1935
1940
1945
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
7000
6000
5000
4000
2005
2010 2012
7000
6000
5000
4000
Tech wreck.
3000
3000
ASX demutualises, self-lists.
1989 Berlin Wall
torn down.
1986 Fringe Benefits
Tax introduced.
2200
2000
1800
1600
1400
1200
Increasing British
investment.В В В Federation.
War priorities and shortage
of imports restrict industrial
activity.
1000
800
Boer War
ends.
600
Start of WWI.
WWI ends.
1925 UK
returns
to gold
standard.
1929 Crash. British
lending ceases.
Export prices collapse.
Industrial activity falls.
Many businesses close.
1930-31
Depreciation
of Australian
currency. Cheap
money policy and
Premiers’ Plan.
1920-21
Brief post-war
deflation.
400
1936-40 European
war scare. Wool
prices fall. Brief
economic recession
and slow transition
to war economy.
Wool prices peak.
Severe but brief
inflation.
Start of WWII.
Oil, mining
and Poseidon
booms.
Low wool prices.
Import controls.
1945 Germany
surrenders.
1973
Vietnam
agreement.
World
share
price
collapse.
Property
boom.
$A floated.
60
1941
Pearl
Harbour.
USA enters
War.
40
20
1940
Fall of
France.
1945
Japan
surrenders.
1942-46
Share price
controls.
1950
Korean War
starts.
1949
Devaluation
of sterling.
Oil, gas
and nickel
discoveries.
Iron ore and
bauxite
developed.
1960
Credit squeeze.
1953
Korean
armistice.
1956
Suez
crisis.
Strong overseas
investment,
scrip shortage
and property
boom.
Deregulation.
Credit boom.
Growth in SE
Asia and world
economy lifts
commodities.
Commodity
prices recover,
new mineral
discoveries.
Industrial
rationalisation.
OPEC oil crisis,
inflation, credit
squeeze. Property
company failures.
US/Europe
equity
bubble bursts,
overseas
markets fall
up to 70%.
600
400
$A falls 30%.
Commodity
prices fall.
Global
sharemarkets
fall in value.
Sept 11
Terrorist
attacks
on US.
Resources boom.
High interest rate / high $A.
Euro banking crisis.
200
180
160
140
120
100
60
40
Inflation down.
Industrials recover.
Commodities weak.
$A fall attracts
overseas investors.
1st Gulf War.
Cold War ends. CBD
property crash hits
banks. Major recession.
Interest rates and inflation
fall. Privatisation starts.
20
10
10
1900
1905
1910
1915
1920
1925
1930
1935
1940
1945
1950
1955
1960
1965
1970
1975
1980
www.asx.com.au
S&P DOW JONES INDICES is the owner and operator of the S&P/ASX index series, including the All Ordinaries. The All Ordinaries, which is used for this chart, was the benchmark equity
index for the Australian market up until March 2000, at which point the S&P/ASX 200 was introduced. For more information about the S&P DOW JONES INDICES Australian index series
visit www.spindices.com/australia. The chart shows the course of share prices on Australian stock exchanges from 1900. It is based on monthly averages from the ASX All Ordinaries
Share Price Index (1980-2000), the Sydney All Ordinaries Share Price Index (1936-1979) and the Commercial and Industrial Index (1875-1936). From April 2000 this Chart follows
monthly averages for the All Ordinaries. A logarithmic vertical scale has been used to show the proportionate importance of fluctuations over the period. Updated November 2012.
AMP Capital Investors, Super ratings Sydney Morning Herald
4
300
80
Superannuation
Guarantee introduced.
1985 Capital Gains
Tax introduced.
Industrial and
property boom.
First Labor
government
since 1949.
Strong
commodity
prices and
trade balance.
800
CPI rise under 2%.
Bond yields at
20 year low. Banks
and media revive.
EC currency turmoil.
Gold price up. В 100
US credit
crisis.
1000
30 March 2000
S&P/ASX 200
replaces All
Ordinaries as
the investable
benchmark equity
index for the
Australian market.
200
180
160
140
120
80
2nd Gulf
War.
World
interest
rates rise
then fall.
S&P up
70% in
2 years.
300
2200
2000
1800
1600
1400
1200
ASX/SFE
merger.
Commodities
plunge. Interest
rates peak.
Severe
recession.
Rising
deficit.
Energy
and metal
shares
boom.
Oil found in
Bass Strait.
Fool.com.au Vanguard Investments
5
1985
1990
1995
2000
2005
2010 2012
HOW CAN ESTABLISHING A SELF MANAGED SUPER FUND
(SMSF) WHICH IS INVESTED IN SHARES, GROW YOUR
SUPER?
Past performance as an indicator of future expectation bodes well for super funds invested in
ASX shares. Both those still in the workforce as well as those at retirement can, as a result of well
selected share holdings in their SMSF, maximize their super balance at retirement and even
continue to live from and grow their savings throughout retirement.
How to grow your super balance before retirement
Example - A 50 year old employed person with $350,000 in super, who establishes a SMSF and
rolls their existing super into it. They contribute $15,000 pa into their SMSF, which is invested in a
share portfolio of ASX stocks returning 11% pa.
The effects of compounding are staggering!
After 15 years, by the time the person reaches retirement age, they will have $2,400,000 in super.
(see Chart 3)
Chart 3: Super
balance starting
in 2013 of
$350,000,
investment in a
SMSF
A$
Years
How to continue to grow your super balance and generate an income
in retirement
The effects of a super fund, investing in shares, which continue to return a similar per annum figure
to returns of the past 30 years, (11.1%) means that even retirees who take an allocated pension
from their SMSF can actually continue to grow (not deplete) their super balances in retirement.
Example - A 65 year old retiree with $500,000 in a SMSF, which is invested in a share portfolio of
ASX stocks returning 11% pa.
The effects of compounding are still staggering!
Even after taking a monthly allocated pension of $3000 (indexed at 5% pa for inflation) after 15
years, the retiree’s SMSF will have continued to grow and be worth well in excess of $600,000.
(see Chart 4)
Chart 4: Super
balance invested
in a share portfolio
returning 11% pa
taking a $3000 /
month allocated
pension, indexed at
5% pa.
A$
Years
SELF MANAGED SUPER FUNDS
The flexibility, transparency and control offered by SMSFs have made this structure the fastest
growing sector in the super system with over $400 billion in assets in 2012.
Structure
SMSFs require two to four individual members or a company to serve as trustee. Each trustee or
company director of a corporate trustee must be a member of the SMSF6.
SMSFs are regulated by the Australian Taxation Office (ATO). Once the fund’s members have
decided to establish a SMSF, the members or their advisor/s may apply to the ATO for an
Australian Business Number (ABN) and Tax File Number (TFN).
Once an ABN and TFN have been issued for a SMSF (this usually takes a few weeks) statutory
documents are able to be completed and bank and share trading accounts in the name of the
trustees on behalf of the superfund are opened.
Once a share trading account is open the ASX provide a Holder Identification Number (HIN),
which is the indentifying number for ownership of the shares in the ASX CHESS system. This
arrangement provides for the ultimate security as the owner of the asset, in this case shares, is the
super fund. There are no custodial arrangements or costs involved in CHESS.
Rollovers and Contributions
Existing super of members of the SMSF can be rolled from other funds into the SMSF. Lost super
amounts can also be located and rolled into the SMSF. Employers are notified of contribution
arrangements so that future Superannuation Guarantee Charges (SGCs) can be paid directly into
the newly established SMSF. This is usually easily facilitated as most employees have super choice
(i.e. employees are able to nominate that their SGC payments be made to a super fund of their
choosing). Individual members may also choose to make regular or special contributions to the
SMSF.
Tax
In accumulation mode, all super funds, including SMSFs are taxed at 15%. This includes
contributions, interest, dividends as well as capital gains where the holdings have been held for
less than 12 months. Capital gains for investments held for more than 12 months are taxed at the
lower, concessional rate, of 10%.
In pension mode, all super funds earning less than $100,000 pa are tax free.
Running expenses of the fund are generally tax deductable, including life insurance contributions,
which may not be tax deductible for working PAYG individuals.
It should be noted that while SMSFs in accumulation mode pay tax at 15% dividends from fully
franked shares are taxed at 30%. This differential in the two tax rates means franked dividends
are able to provide an effective tax offset credit to the SMSF of 15%. For SMSF funds in pension
mode, these franking credits are fully refunded by the ATO once the fund’s tax return is lodged.
SMSFs are required to keep up-to-date records. Tax returns must be lodged and the fund is
audited annually.
Undischarged bankrupts, persons convicted of certain frauds and APRA banned persons may not act as SMSF trustees
6
Insurance
Insurance premiums including life, total permanent disability (TPD) and income protection can
be paid from and be tax deductable to the SMSF. (see section on �Insurance Planning’ in this
document for further details)
Documents
Where an SMSF is to be administered and managed by an advisor on behalf of the trust members,
the advisor must provide the following documentation:
- Statement of Advice (SOA)
- Financial services Guide (FSG)
- Product disclosure statements for products being used by the fund e.g. bank accounts /insurance policies etc The following legal documentation will also need to be prepared:
- A Trust Deed and other stutory documents
- Incorporation of corporate trustee and all ancillary documents
- Wills of SMSF members
- Powers of Attorney (POAs) as and if required for individual members of the trust.
- A Superannuation Binding Death Nomination for each member of the trust
(see section on �Estate Planning and Wills’ in this document for further details)
HOW OSTRAVA CAN HELP YOU
Overview
Australia’s complex tax system makes financial planning an essential requirement for investors.
Ostrava Asset Management provides an end-to-end financial solution for investors seeking to grow
their investments and generate investment income.
Ostrava’s approach is to invest in growth assets, primarily property and shares; utilising the
advantages provided by the taxation and superannuation systems and allowing for the power of
compounding to take its effect.
At Ostrava we manage the entire SMSF set-up process, including the establishment of the
fund’s Trust Deed by our in-house lawyer. We provide a full administration service, which includes
maintaining books and records and liaising with our tax agent for the preparation of annual returns
and general tax planning. We also offer a range of insurance products that protect earning power
and dependents in the event of unforeseen circumstances such as death or the inability to work.
In addition, our in-house lawyer is available to consult on general legal matters as well as specific
issues relating to estate planning, including the creation of wills, testamentary, discretionry, unit and
family trusts.
Property
Ostrava can assist in researching localities for investment potential and in sourcing mortgages at
competitive rates.
Investors should, however, be cautious not to over gear.
In most instances we believe that property investments should be kept separate and outside
of a SMSF. The reasons are two fold. There are often greater tax advantages by purchasing an
investment property in one’s own name and there are also issues to do with cross-collateralization
of assets that can potentially open an SMSF up to creditor access where property is owned by the
SMSF.
Many financial advisors promote the purchase of geared property in SMSFs. This fails to take into
account that the depreciation of the purchased property may be better utilised by the investors
outside the super system (i.e. in their personal names).
Asset protection and variable tax brackets notwithstanding, the average PAYG tax payer, earning
say $85,000pa, would ordinarily be taxed on an investment property at their marginal tax rate of
38.5%. However, by neutrally gearing their investment properties (i.e. rent received approximately
equalling interest paid) many of our clients have been able to take advantage of property
depreciation on their investment/s and have, as a result, had their PAYG tax reduced substantially.
One of the least promoted benefits of super is that in the unlikely event of a member’s bankruptcy,
pre-existing super assets are generally protected from creditors. However, in instances where
property has been purchased by a SMSF with borrowed funds, and where one or more of the
members later becomes bankrupt, the effective cross-collateralisation of assets (where assets in the
fund have been mortgaged to a financial institution) may in fact mean that the super fund is no
longer fully protected from creditor access.
Although most Australians would regard bankruptcy as an unlikely occurrence, last year alone
(2012) 22,000 Australians were declared bankrupt and a further 9,000 were forced to enter into
formal debt agreements. Insolvency can result from such every day events as a marital breakdown
or adverse legal action ensuing from a car accident or public liability claim.
Therefore, while we are happy to assist clients in locating suitable investment properties and
mortgage products, we generally advocate that any geared investments should be held in one’s
personal name and only fully paid shares (i.e. not shares purchased utilising a margin lending
facility) held within one’s SMSF.
Shares
At Ostrava we construct a share portfolio from a short list based on our current research. We try to
diversify portfolios across sectors and industries, all the while attempting to invest in shares that will
provide our clients with the best opportunity for growth, income and franking credits.
In determining which shares or businesses to buy, Ostrava’s research and assessment process
utilises a combination of objective and subjective factors.
We call these factors the “Six Filters” – a term which we have �borrowed’ from Warren Buffett’s
business partner, Charlie Munger.
The Six Filters are:
1.
Is the business easily understandable?
2.
Does the business generate a higher than average return on equity utilizing little or no debt?
3.
Do we expect the business to grow revenue and earnings?
4.
Does the business have a sustainable competitive advantage?
5.
Is the business run by able and trustworthy managers?
6.
Are the shares available at a bargain price?
Generally, we prefer to hold stocks for extended periods, however, we will consider selling or
reducing holdings if one or more of the first five filters are breached or where we believe the shares
are overvalued.
The following two case studies illustrate how utilizing the “Six Filters” approach affects which
shares we ultimately chose to buy and which we reject.
CASE STUDY 1: ARB CORPORATION (ARP)
ARB manufactures, distributes and sells 4x4 vehicle accessories. The business was founded in the
late 1970’s by brothers, Andrew and Robert Brown.
From humble beginnings in their Melbourne garage the Brown brothers have grown ARB over the
past 30 years to become a global industry leader. Today, from its factories in Victoria and Thailand
the company continues to sell to a domestic market as well as exporting to over 80 countries.
Sales are fairly evenly divided between trade and recreational markets.
Products include: bull bars, side/rear/under vehicle protection, recovery equipment, air lockers,
compressors, canopies and fridge/freezers.
ARB has developed an excellent reputation for quality, reliability, innovation and value which
has allowed the company to attain considerable brand equity and a sustainable competitive
advantage.
4x4 vehicle sales in Australia over the past two decades have grown substantially as a percentage
of total vehicle sales, from 30% of sales in 2001 to 50% of total vehicle sales in 2012. SUV sales
growth is expected to remain robust in coming years, providing a considerable tail wind for ARB.
ARB’s revenue has grown from $88M in 2003 to $270M in 2012. Revenue in 2013 is expected to
be around $300M, i.e. approximately a 10% growth rate.
Profits have grown from $10M in 2003 to $38.5M in 2012.
Margins have improved from 12% 10 years ago to 14% last year (2012).
Dividends have increased in line with profits averaging out at 50% Net Profit After Tax (NPAT) most
years, with the odd special dividend in 2005 and 2010.
Over the next 5 to 10 years we anticipate that ARB’s earnings will continue to grow as the company
does what it has done in the past, that is, deliver high quality, innovative products to an increasing
number of customers in both domestic and an expanding pool of foreign markets.
In terms of valuation we would like to buy shares in a quality business like this at a price equal
to 12x annual earnings or less. With a stock of this quality, we would possibly even consider
purchasing shares at up to 15x annual earnings, however the lower the better!!!
In 2007, just prior to the onset of the GFC, the stock market was hot on ARB and bid up the share
price to around $4, some 20x historical earnings – close to double what we would like to pay.
Whilst revenue and profits for ARB grew through the GFC (sales actually increased from $146Mn in
2006 to $192Mn in 2009) ARB�s share prices fell from $4 to $2.50 in early 2009, taking the PE* ratio
to 9x. (*PE = Price ÷ Earnings – a measure of valuation in growth stocks – the lower the better!)
At this level, we concluded we could purchase an extremely high quality business, satisfying all of
our “six filters” including No. 6 – “available at a bargain price”. We then began accumulating the
stock.
Chart 5: ARB
Corporation
share price
2008 – 2013
Over the preceding years, ARB’s share price has appreciated from $3 to $12. Including
dividends, this represents a return of over 100% pa - far exceeding our benchmark.
CASE STUDY 2: TELSTRA (TLS)
Telstra is Australia’s most widely held and arguably one of the nation’s most scrutinized companies.
Its origins began at Federation when the Commonwealth Government formed the PostmasterGeneral’s Department (PMG) to manage and develop all domestic telephone, telegraph and
postal services.
In 1975, the Federal Government separated telecommunications from postal services and created
the Australian Telecommunications Commission or �Telecom’ as it was known.
With a strong research, development and engineering culture, Telecom was a leading innovator in
telecommunications, launching the Public Automatic Mobile Telephone System (Mobile) in 1981.
This enabled the first car phones to become operational – and was a significant boon for mobile
workers throughout Australia.
In 1993 the company was renamed Telstra and in the following years the industry was gradually
opened up to allow competition. Partial privatisation of the telco began with the T1 float in 1997
and culminated in the Commonwealth’s final T3 sale in 2006.
In 2010 Telstra agreed to sell certain legacy assets, primarily the hybrid copper network to the
Commonwealth for the roll out of the National Broadband Network.
Today, Telstra is a diverse provider of telecommunications and information products and services.
TLS is engaged in the provision of fixed and mobile networks and associated products and
accessories; data storage; internet; directories and pay TV.
Over the past 15 years, the company had experienced considerable growth in its mobile and
broadband divisions, whilst simultaneously suffering a large decline in its traditional, and previously
monopoly held, fixed line telephone network.
The financials tell the story:
Revenues in 2003 were $20.5Bn for a net profit of $3.4Bn with operating margins of 50%.
Revenues in 2012 grew slightly to $25Bn for a net profit of $3.4Bn while operating margins fell
to 42%. At the same time, net debt had grown from 70% to 97%. The per share comparison of
earnings and dividends is illuminating, especially for a stock many investors own for “income”….
200320052007200920112012
EPS (Earnings per Share)3534.8
26322631
DPS (Dividend per Share)274028282828
POR (Pay out Ratio)
77
114
107
88
107
90
Over the past decade Telstra, has had low revenue growth, no earnings growth and successive
management has, arguably for political reasons, maintained a high POR (Pay out Ratio) with the
maintenance of the sacred 28c dividend since T3.
Chart 6:
Telstra
Corporation
share price
2003 – 2012
No earnings growth = no share price growth. Telstra passes none of our “six filters” and
subsequently Ostrava has not purchased TLS stock.
CASH / TERM DEPOSITS
In the current low interest rate environment, cash is a store of value rather than a class of
investment.
Where our clients choose to maintain some liquidity in their SMSF we shop around, on their
behalf, for the best interest rates available at call or at term
INSURANCE PLANNING
Protecting our clients’ earning ability and lives are very important considerations in the financial
planning process. At Ostrava we constantly review insurance products on the market and match
clients with the insurance products and coverage best suited to their needs. The three most
common types of insurance products are life, total permanent disability (TPD) and income
protection7. Premiums for these categories of insurance can be paid from and be tax deductable
to one’s SMSF.
• Life Insurance
In the event of the insured’s death, Life Insurance results in a payment to one or more previously
nominated beneficiaries.
• Total Permanent Disability Insurance (TPD)
TPD cover results in a payout if the insured becomes totally and permanently disabled
E.g. an accident resulting in quadriplegia.
How much cover is appropriate, will depend upon factors including:
-Age
-Marital / relationship status
-Dependents
-Assets / liabilities
• Income Protection Insurance
Income Protection cover generally pays the insured an amount of their income (often around 65%)
for an agreed period of time in the event that they are unable to work.
Refer to Product Disclosure Statement (PDS) for full details on terms and definitions of individual insurance policies
7
ESTATE PLANNING AND WILLS
To ensure that your wishes are complied with upon your passing, estate planning is essential.
Depending on your individual circumstances, the process can range from being relatively simple to
quite complex.
Ostrava’s in-house lawyer can provide you with expert advice and can also prepare all necessary
documentation.
Your individual situation will determine the specifics of the legal documentation that you will
require. In most instances however it will be necessary for each member of a SMSF to have
the following documents drawn up and signed: A Will, A Power of Attorney (POA), and A
Superannuation Binding Death Nomination.
• Wills
Upon death most assets pass into your estate. Your executor (i.e. the person you nominate to
undertake your instructions) will then distribute the assets to the beneficiaries in accordance with
the instructions of your will.
Some assets, such as those held jointly (E.g. the family home, trusts, superannuation proceeds
and life insurance policies etc.) are generally not transferrable assets and hence are not ceded to
beneficiaries via instructions in your will.
Assets held jointly will automatically pass to the other owner/s in the event of death however other
arrangements will generally need to be made for trust and superannuation assets.
• Powers of Attorney (POAs)
A Power of Attorney is a legal document in which you nominate another person to act on your
behalf. Powers of attorney can be general (for protracted or prescribed periods and/or in particular
circumstances) or enduring.
General POAs are normally limited in the powers they provide and are often used where one
requires the attorney to undertake a specific function for a limited period (e.g. being a signatory
to your bank account whilst you are overseas). A general POA is no longer valid if you lose mental
capacity.
An enduring POA does not cease if you lose mental capacity. These are particularly important if
one is elderly as the chances of losing mental capacity are greater.
• Superannuation Binding Death Nominations
This document allows you to nominate beneficiaries who will receive your superannuation
proceeds in the event of your death. The document ensures that your super proceeds will be paid
directly to your nominated beneficiary/ies.
AGED CARE
Part of comprehensive retirement planning will often include consideration that at some point in
the future one may have to move from independent living into some form of aged care.
Making the decision to move into an aged care facility is a major step in one’s life, one which can
be daunting. In addition, there are a number of rules and regulations associated with the process
that can be extremely complex and confusing. Exploring the options and making well informed
decisions well ahead of time can help to ease the stress of such a transition.
At Ostrava, we assist each individual with a tailored approach, and explain the intricacies of the
process in a comprehensive and straightforward manner.
Over time we have developed relationships within the aged care industry and are therefore in a
position to know what the different facilities provide with regards to services and amenities as well
as how moving into an aged care facility will affect you financially.
We will assist you to locate the most suitable facility in terms of location, comfort, services,
amenities and financial optimisation.
Further, we will complete a cash flow analysis based on your personal assets and income to provide
you with detailed advice on the financial effects of transitioning to aged care.
CONTACT INFORMATION
Mr Bradley Grimm
-
Ms Vanessa Ash -
Portfolio Manager
Lawyer
OSTRAVA ASSET MANAGEMENT
Melbourne
Level 11, 350 Collins St,
Melbourne VIC 3000
Sydney
Level 29, 2 Chiefly Square,
Sydney NSW 2000
Phone: 1300 663 217
Email: info@ostrava.com.au
Web: www.ostrava.com.au
Asset Management
& Superannuation
Asset Management
& Superannuation
Asset Management
& Superannuation
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