As you saw in our previous month’s client video with Steve Fairall, he’s been retired for 2 years and it looks pretty good! Steve says, “there was a stage when we had 4 young kids, we wanted to provide them with a good life in Sydney, help them grow and get well educated whilst also setting ourselves up for the future.”
But there’s a lot of work and strategy that goes into a financially effective retirement.
Let me explain,
As you would know if you meet certain requirements you can add up to $25,000 per year into your superannuation fund as a concessional contribution and up to $100,000 can be added as a non-concessional contribution each year. 1
During the accumulation phase of your superannuation, contributing to your fund can ensure that you will have ample funds held tax effectively during your pension phase. Most people think after you are 65 years old and no longer working that you are unable to make voluntary contributions. However, this is where the strategy comes into play.
It is called the “downsizer contribution”, put simply if you are aged 65 or older and you have owned your principal place of residence for at least 10 years you may be eligible. This means you can make a tax-free contribution into your super of $300,000 and as a couple you can contribute $600,000 irrespective of having a total superannuation balance in excess $1.6 million.
Prime Wealth’s Senior Advisor Angus Rodgers says, “Where it applies, this is an awesome strategy to ensure retirement funds are maximised and invested tax-effectively.”
Still confused or want to know more about this strategy, the tax and social security implications talk to our advisors today on (02) 9415 1511 or email us.
1 This contribution will be considered at 30 June of the financial year in which the contribution is made, when the total superannuation balance is recalculated.
This strategy is not for everyone and has been provided as general information only and prepared without taking into account your financial position, objectives, and needs. You should consider its appropriateness and seek financial advice before making any financial decisions.
How the ‘gig economy’ has changed work and the economy.
Firstly, you’re probably wondering what this whole “gig economy” means. It’s actually a buzz phrase, first coined at the height of the financial crisis when a number of workers started ‘gigging’ and working many casual jobs to stay afloat financially. Today, it is more recognised with people freelancing who are seeking more flexible and diversified work and working hours especially within the rapidly growing digital platforms. These platforms allow freelancers to directly connect with potential employers to find employment. Hence the term ‘gig workers”. Great examples of these digital platforms are companies such as Uber, Airtasker and Deliveroo who are changing traditional markets.
With this growing trend legislation also needs to be updated to reflect these abovementioned changes and it has, but it has been slow. Internationally, we have seen disagreement over gig workers classifications as either ‘employees’ or ‘independent contractors’. The most recent ruling by Australia’s Fair Work Ombudsman in June 2019 found Uber drivers to be independent contractors because there is not “an obligation for an employee to perform work when it is demanded by the employer”, as reported by Stuart Ridley.
A survey commissioned by the Victorian government published in June 2019, found 7.1% of Australians reportedly used a digital platform such as Airtasker (34.8%), Uber (22.7%), Freelancer (11.8%), Uber Eats (10.8%), Deliveroo (8.2%) for work. This report further found 64.8% of gig economy workers to access work via one platform opposed to 35.2% who accessed work through more than one platform and 11.4% who are registered on four or more platforms.
This however is also causing issues regarding superannuation. The Association of Superannuation Funds of Australia (ASFA) noted almost a quarter of self-employed people to have no super and less likely to meet the $450 per month earning threshold with any one employer as recorded in February 2018. It has been suggested a new ‘dependant contractor’ category to be made, ditching the earning threshold.
Further taxation issues have arisen from this new gig economy with the Australian Tax Office (ATO) updating guidelines for people earning income via digital platforms to also include ride sharing, short-term property or room rentals or skills on demand, as changed in June 2019. The ATO warn they will be matching data earnings from such above-mentioned platforms.
If you want to know more about how to navigate through these gig economy changes, please get in touch with the team via emailor phone us 02 9415 1511. Speak soon!
Don’t let your Christmas generosity cause unwanted tax for your business
When celebrating Christmas with your staff in the form of Christmas parties or gifts, be sure to keep accurate record as certain scenarios may attract Fringe Benefit Tax (FBT). Since 1986, the FBT system has existed in order to tax on things on the fringe, as the name suggests or outside of your salary package.
There is no separate FBT for the Festive Season however you may encounter several different circumstances when providing these events to your staff. This could also include fringe benefits provided by you to past and future employees and their associates (spouses and children), an associate or those under an arrangement with a third part to any current employees.
Implications for taxpaying body
If you are not a tax-exempt organisation and do not use the 50-50 split method for meal entertainment, the following scenarios may help you determine whether there are FBT implications arising from a Christmas party;
Understanding the Fringe Benefits Tax implications can be confusing and for a merrier Christmas your awareness of FBT and having accurate record keeping is important. Before planning your Christmas party, staff and client gifts please call us for advice.
Most people ignore it until it touches them or someone around them…
During this month of Movember, the team at PrimeAdvisory are taking on the challenge to raise awareness and support for prostate cancer. In Australia, prostate cancer is the most commonly diagnosed cancer in men.
This challenge is one that is close to our hearts, as our team member Mark Greenwood was diagnosed with prostate cancer last year after a simple blood test. 16 months later after surgery, and a period of recovery the signs look good for Mark with all test results showing “clear”.
Sharing his experience, Mark exclaims, “I want to promote awareness of this insidious disease, it’s one of those things that is not dramatic but will slowly kill you. I understand that most people ignore it until it touches them or someone around them.”
When reflecting how this experience has changed Mark’s outlook on life he says, “Everything like this does change you in some way or another. There are so many things going on in the world and we are all busy, that it’s easy to ignore these things until maybe it’s too late. I understand that a lot of guys my age do not even think about it. My best mate even asked me how I found out I had it, and he is over 50 and never had a PSA test. Every male should be having this test over the age of 45.”
So how do you know if you have prostate cancer and are you at risk?
To help raise awareness for this important cause, we are looking to raise $16,000 for the 16 months Mark has been clear! That’s why we need you to get involved and help us by generously donating much needed funds to fight this disease.
As part of acknowledging and participating in RUOK Day this year, the PrimeAdvisory team recently enjoyed a presentation from Wellness Coach, Dr Leanne Wall. Dr Wall shared how to recognise when either ourselves or a fellow team member might not be ok. Burning out is common among high-performers and can lead to anxiety and depression. In addition to presenting to our team, Dr Wall has kindly shared the article below to help us and our clients recognise and prevent burn-out to ensure we take care of our mental wellbeing.
Today I met with my lovely client who has been juggling two fulltime senior roles for the last twelve months. When the re-structure occurred, she was promised more resources and a level of team competency that would enable her to delegate. Fast track 12 months and neither promise has been kept. The organisation remains on a headcount freeze, and she is exhausted to the extent that I am worried about her physical, mental and emotional wellbeing. She tells me her hair has been falling out for at least 6 months now and her skin has a chronic rash that flares up from week to week. The sparkle in her eyes is gone, and her body oozes fatigue. She was meant to talk to her boss a few weeks ago; however, equally busy, he appears disconnected from his team. To say that my client is burnt out is an understatement.
The World Health Organisation (WHO) has redefined burnout as a syndrome linked to long-term work stress. Today burnout is a global phenomenon and according to the WHO comprises three elements: an overwhelming feeling of exhaustion, becoming detached from one’s job and a drop-in performance at work.
So how can you tell if you are close to burnt-out? Not quite there but almost? Because wouldn’t you agree to be waiting until you are already entirely burned out before you do something about it makes no sense at all. Let’s face it for any other illness you wouldn’t wait until it is too late.
“A lot of the signs and symptoms of pre-burnout would be very similar to depression,” says Siobhán Murray, a psychotherapist, based in County Dublin, Ireland, and the author of a book about burnout, The Burnout Solution. Murray suggests taking note of bad habits that are becoming the norm, such as increased alcohol consumption and relying on high sugar, fat and salty foods to get you through the day. Not to mention feelings of tiredness that won’t go away no matter how much you sleep. “So that even if you do sleep well, by 10 in the morning, you’re already counting down the hours to bed. Or not having the energy to exercise or go for a walk.” As soon as you feel this way, go and see a doctor who can distinguish between the two, because burnout is still best dealt with by making lifestyle changes, while depression requires a different approach.
So how do you figure out whether you are just having one of those hideously stressful months or are on the cusp of burnout? Stress in manageable doses can make us perform at our peak; however, it is stress with no recuperation that can turn into burnout. In his book Why Zebras don’t Get Ulcers, Robert Sapolsky says that our primitive stress response (aka our fight or flight response) was never designed to be switched on 24/7, instead only used in short bursts to get us out of danger. The problem is that the threat we perceive today versus the danger when we were cavemen is vastly different.
Further, with our well-developed brains, humans don’t need a physical crisis to switch on their stress response but can do so by merely thinking about something that may go wrong, that hasn’t even happened and may never happen. The impact of this on our body is enormous and can push us towards burnout. If you find you are continually feeling exhausted and your energy reserves are at an all-time low, you need to take action and get some professional advice.
Cynicism Towards your Work
Feeling like your work has little value, saying no to socialising and becoming more sensitive to disappointments is another classic sign you may be inching towards burnout. “Someone on the brink will probably begin to feel emotionally numbed or mentally distant,” says Jacky Francis Walker, a psychotherapist based in London who specialises in burnout. “Like they can’t engage as much in the ordinary things of life.”
Reduced work performance
Walker also stresses looking for the third sign of burnout, which is the nagging feeling that the quality of your work is starting to slide. “People say ‘but this isn’t me!’, ‘I’m not like this’, ‘I can usually do x,y and z’. But obviously if they are in a state of physical depletion, then they aren’t in their normal range of capabilities,” says Walker.
For those scientists amongst us who find these symptoms a little too vague, have a look at the Maslach Burnout Inventory (MBI), a test which measures burnout. The MBI-General survey is the most widely used, and measures exhaustion, cynicism, and how well you think you are doing at work. Although this survey is generally used to diagnose burnout, it can be used to assess if you are getting close.
You’re pre-burnout: What’s next?
If ignored, burnout can wreak havoc on your health, happiness, relationships and job performance. So, catch and combat it early and here are some ways of how.
Whether it be meditation, listening to music, reading a book or magazine, taking a walk or visiting with friends and family, genuinely think about what you need to do to relax, and schedule it in your day to ensure you make time for it.
Cultivate a Life Outside of Work
Find a hobby, sports or fitness activities or volunteering in the community, something that doesn’t involve work and that you are passionate about that’s challenging, engaging and really gets you going. Where you can unwind and enjoy the moment.
Unplug that Device
While communication technology can promote productivity and ensure that we remain on top of things at work, it can also allow these stressors to permeate into family time, holidays and social activities. Be firm in setting boundaries by allocating certain times to check email at home and by turning your mobile off at dinner or not taking it to bed with you.
Sleep, Sleep, and more Sleep
Research suggests that fewer than six hours of sleep per night is a significant risk factor for burnout. Poor sleep can negatively affect your job performance and productivity. It can lead to fatigue, decreased motivation, make you more sensitive to stressful events, impair your mental function, leaves you more prone to making mistakes and makes it harder to juggle competing demands. We have also seen the reverse in that sleep improves memory and helps you better regulate your emotions. Nothing like a sleepless night to make you cranky the next day.
Organise Your Life
People who are burnt out often spend time worrying that they will forget to action something or that something important will slip their mind. Get organised, clear your head, put together a to-do list (or an electronic task list) and then decide what needs to be tackled first. That way, you don’t have to wake up at 4am in the morning with a long to-do list running through your head. You know you have systems in place to remind you.
Tune In To Your Body
There are important physical signs that may indicate that you might be under too much stress: an increase in headaches, tight shoulders, a stiff neck or more frequent stomach upset. You must stay tuned into how your body is feeling. We know from research that when it comes to mental health, burnout can affect depression, and if you’re depressed, it can also affect your level of burnout—it goes both ways. So, if the challenges you are tackling are severe and getting worse, you may need to seek professional help. Talk to a doctor or psychologist to get help as support from your family and friends may not be enough.
Is it Me or Is it Them?
Burnout is sometimes a symptom of external factors like work. In the first instance, make sure it is not because of an internal factor that you need to address. You should ask yourself, “Where is this coming from?” so you can work out what causes your stress, and how to maintain your internal resources to keep yourself motivated, doing your best work and functioning well.
Some burnout really is work-related. Cutting costs by hiring freezes, layoffs, cutting work hours can cause massive stress in the system. Owning your own business and having the responsibility of employees on your shoulders can create huge pressure. There are often two components that contribute to burnout: too many demands and too few resources. Assess if it is time to move on, figure out whether your role is a mismatch between what you need and what you are getting from working in that particular business.
When is Enough, Really Enough?
If you have tried everything within your power to make changes at work; however, the organisation is not willing to meet you halfway, is it time to move on? Talk to your manager or HR about access to counselling services, mental health benefits or stress management training. Perhaps it is about improving communication and creating a better work environment. Emphasise how those cultural shifts will enable you to continue to serve the company and become an even better employee.
At the end of the day, life is not a dress rehearsal! And if we are not living the life we want because we are exhausted, not connecting with the people that we love because we can’t face another conversation at the end of the day and not liking ourselves for the way we show up in our life every day, then do something about it.
I ask my client in a concerned voice ‘How long are you going to do this for?” She says quietly “I am done!” On the one hand, I feel a sense of relief for her but on the other hand I think “What a damn shame, for her career, her team and the organisation.” She has a meeting with her boss tomorrow, confirmed in the diary. She plans to lay out the ultimatum of ‘Keep your promises, or I am gone.’ I hope for her sake, she does.
Dr Leanne Wall is a Wellness Coach with over two decades of hands-on leadership experience in the corporate healthcare industry in Australia, New Zealand and the Asia Pacific.
Leanne has first-hand knowledge of the significant work pressures we can sometimes face working in a fast-paced corporate environment and through her personal experience of burnout in her career, understands the critical importance of managing work-related stress in a timely and effective way and knowing when to ask for help.
Leanne is passionate about increasing awareness of the importance of proactively and deliberately focusing on our health (mentally, physically and emotionally) and that this responsibility lies not only with the individual but at all levels of an organisation.
Leanne focuses on empowering managers with the knowledge, skills and resources to be great role models for managing their own stress and creating a psychologically safe work environment where team members feel comfortable to raise their hands if they are struggling.
With authenticity and humour, Leanne uses her medical and counselling background, together with neuroscience and evidence-based research to generate crisp insights into the acute stress response and how this can help and hinder our performance, both in our professional and personal lives.
Leanne can be contacted via email at email@example.com