Hot Issues
spacer
SMSFs: Our 'hardest' jobs
spacer
ASIC issues alert over big gaps in SMSF trustee knowledge
spacer
Super savings gap for women stuck at 30%
spacer
Statistics for all Australians
spacer
Super set to play bigger retirement role
spacer
Why SMSFs want estate-planning advice
spacer
The power of financial role models
spacer
Assess your retirement financial resources
spacer
Cryptocurrency audits tipped to increase this EOFY
spacer
Time to check your risk exposure?
spacer
Some general interest stats on SMSFs
spacer
Check trust deed to protect super in estate planning
spacer
Survey reveals strong opposition to retirement system changes
spacer
Australia by numbers – Update
spacer
Federal Budget 2018 – Overview
spacer
Your Budget
spacer
4 components of our 2018 Federal Budget
spacer
Tools to help you manage your financial position are available on our site.
spacer
New rules capture SMSFs trading big with cryptocurrency
spacer
Common EOFY slip-ups flagged for SMSFs
spacer
Beware residency rules if moving overseas
spacer
99 pct of SMSFs missing global opportunities
spacer
How to plan for a better retirement
spacer
Australia by numbers - Update
spacer
Determine your retirement goals
spacer
ATO issues update on cryptocurrency compliance traps
spacer
How likely is a global trade war?
spacer
Gig economy spike prompts calls for super policy changes
Article archive
spacer
Quarter 2 April - June 2018
spacer
Quarter 1 January - March 2018
spacer
Quarter 4 October - December 2017
spacer
Quarter 3 July - September 2017
spacer
Quarter 2 April - June 2017
spacer
Quarter 1 January - March 2017
spacer
Quarter 4 October - December 2016
spacer
Quarter 3 July - September 2016
spacer
Quarter 2 April - June 2016
spacer
Quarter 1 January - March 2016
Quarter 2 of, 2016 archive
spacer
Making investing a family affair
spacer
Super and divorce: a personal finance issue
spacer
Market Update - May 2016
spacer
ASIC flags SMSF investors in scam risk
spacer
Older, greyer and still working
spacer
Working and contributing to super past 65
spacer
The pitfalls of part-year pensions
spacer
Replenishing SMSF memberships
spacer
Budget will hit 15% of SMSFs
spacer
The insidious side of low interest rates
spacer
Market Update - April 2016
spacer
Budget 2016-17
spacer
Do investment principles stand test of time?
spacer
Estate Planning - early inheritance
spacer
US economy will bend, not break
spacer
A detailed look at the ATO’s new LRBA guidance
spacer
Defying life's blueprint
spacer
ATO continuing lodgement crackdown
spacer
Another twist on the gender savings gap
spacer
Market Update – March 2016
spacer
Going solo
spacer
Age Pension means-test prevents rational decision-making
spacer
Changing times for super collectables
spacer
Preservation Age Rule
spacer
Why investing for retirement isn't just about super
Making investing a family affair

 

Most advisers would agree that couples in a marital relationship who carefully co-ordinate their investment portfolios along with their other personal finances ....

           

 

.... can potentially put themselves in an excellent position to reach their shared long-term goals. 

This joint approach to investing can include ensuring that the asset allocation of all of their investment portfolios - inside and outside super - are appropriate and non-conflicting. It also involves making sure that each partner is making the most of the caps on super contributions if suitable for their circumstances and within their means. 

Another issue to consider is whether to make spouse super contributions where appropriate with one spouse contributing to the superannuation account of the other spouse. For instance, a higher-earning spouse might decide to split eligible concessional (before tax) contributions with a lower-earning or non-working spouse. (See discussion below regarding the federal Budget.) There are numerous ways that spouses can save and invest together.

However, for married and de facto couples, particularly those whose relationships last, taking a joint approach to personal finances and investments in general can be highly positive. 

Perhaps think about consulting a financial planner as a couple to discuss your overall personal finances and your shared long-term goals. 

The recent federal Budget with such proposals as a $500,000 lifetime cap on non-concessional (after-tax) contributions and a $1.6 million cap on the amount that can be transferred into a super pension account underline the benefits of a co-ordinated savings effort. These two Budget proposals once again emphasise that both partners should each work towards reaching their individual contribution caps - rather than most of the savings being in the super account of one partner. 

Further, the Budget proposes to allow fund members aged 65 to 74 to make super contributions from July 2017 without meeting the works test. In turn, this would enable spouse contributions for non-working spouses aged up to 74, providing another incentive to take a joint approach to retirement savings. 

Self-managed super funds can provide the best example of couples saving together in a co-ordinated way to achieve their shared goals. 

Two-member SMSFs hold 69.7 per cent of the $590 billion-plus in SMSFs while single-member funds hold 22.6 per cent of the money as at 2013-14, according to the ATO's latest SMSF stats. These percentages hardly move from year to year.

Couples in married or de facto relationships would make up vast majority of these two-person SMSFs. And presumably a fair proportion of the single-member SMSFs in existence once had memberships made up of couples in a marital relationship until death or divorce intervened. 

The remaining 7.7 per cent of SMSFs have various membership combinations including parents and up to two of their adult children.

 

By Robin Bowerman
Smart Investing 
Principal & Head of Retail, Vanguard Investments Australia
03 June 2016