Money and Life
(Financial Planning Association of Australia)

You don't have to pay yourself super, but when you retire, you might be glad you did.

You can make regular or lump sum payments, can usually claim a tax deduction on contributions, and may be able to save tax.

Why pay yourself super

There are advantages to contributing to super:

• You save for your retirement.
• You can claim a tax deduction for super contributions.
• Super contributions are taxed at 15%, so you may save tax depending on your situation.
• Super investments usually get better returns than bank savings accounts, so your savings will grow faster.

Use our super calculator

Work out how much you can save for your retirement.

How to pay yourself super

If you already have a super fund, check that you can make contributions when you're self employed. You'll need to give your fund your tax file number (TFN) so they can accept contributions.

If you don't have a fund, see choosing a super fund.

Transfer a regular amount or a lump sum

There are two ways to contribute, depending on how you pay yourself. If you receive:

• A wage - set up a regular transfer into super from your before-tax income.
• Income from business revenue - transfer a lump sum when you have enough cash flow.

Tax deductions for super contributions

You can claim a tax deduction for contributions you make from your pre-tax income (known as concessional contributions). You benefit because you reduce your taxable income.

To claim a tax deduction, you need to send a 'Notice of intent to claim' form to your super fund before the end of the financial year. Contact your fund to find out how much time you need to allow for processing.

See claiming deductions for personal super contributions on the Australian Taxation Office (ATO) website for detailed information.

Always confirm the details of any super contributions with your accountant or tax agent.

How much to contribute to super

As a guide, employers contribute at least 9.5% of an employee's earnings to super.

There are limits to how much you can contribute each financial year:

• up to $25,000 in concessional contributions (from your pre-tax income, for which you can claim a deduction), and
• up to $100,000 in non-concessional contributions (from your after-tax income)

If you're on a low income, you may be eligible for government super contributions, see super contributions.

Money Smart
(ASIC)

One account, two names

Opening a joint account with your partner is a huge commitment and one of the biggest decisions you will make in your relationship. Only do it if you completely trust them to responsibly access the money, in good times and in bad.

Here are some tips to work out whether a joint account is right for you.

Risks of joint accounts

It's not a good idea to open a joint account with someone you have just met as you are giving them access to your money. Joint accounts are only suitable for people who trust each other deeply, like a family member or your long-term partner.

Case study: Costa's girlfriend takes him for a ride

Costa works interstate a lot. He decided to open a joint account with his girlfriend, Jenny. The joint account meant he wouldn't have to worry about paying his bills when he was away as she would arrange it for him.

A few weeks later, Costa checked his account to make sure his boss had paid him that week. He was shocked to find there was no money in the account. Costa tried to contact Jenny but she would not return his calls. He rang his bank and found she had withdrawn all his money. She could do this as it was a joint account that did not need his permission for withdrawals.

After this bad experience, Costa got a separate bank account and decided to set up direct debits for his bills. It would be a long time before he trusted anyone with his money again.

Be very wary of anyone pressuring you to open a joint account. People do have money troubles and may see you as a way to help solve their financial problems.

If you open a joint account which offers credit, and one account holder racks up a large amount of debt they can't pay back, you both risk having a bad entry on your credit report. You are also legally responsible for paying off the debt.

Benefits of joint accounts

People often open a joint account because they pay fewer fees with one account than two. It can also make joint payments like mortgage, rent and other bills easier to manage.

Joint accounts work well for people who spend money in a similar way. Both people should agree how and when they will deposit and withdraw money, to meet the same goals.

If you are thinking about opening a joint account, ask yourself:

• Do I trust the other person completely even if times get tough?
• Do we communicate well about money matters?
• Do we have similar goals for our money and similar spending habits?
• What is our objective in opening a joint account? Is there a better way to achieve this objective?

A shared account for shared bills

One way to make things more convenient for you and your partner would be to keep your money in separate accounts but open one shared account for your shared bills. Discuss with your partner what bills you will pay with your shared account and how much you each will contribute.

Types of joint accounts

There are two types of joint accounts.

Both to sign

This type of account only allows transactions to be made when both parties sign. For example, if you don't agree that your partner should spend money from the account on a new motorbike, they wouldn't be able to access the money without your agreement. If you are worried about security, this may be a good option for you.

Either to sign

This account allows both parties to transact independently of each other. This is a less secure option because one person can withdraw and use the money without the approval or knowledge of the other.

Case study: Missy's ex-husband empties their bank account

Missy was married for 5 years before she and her husband decided to separate. They had over $10,000 in a joint account that they used to pay bills and save for their children's education. A couple of weeks after the separation, Missy's card was declined in the supermarket. There was no money left in the account and she couldn't pay for her groceries.

Missy rang her bank to complain only to find out that her husband had emptied the joint account. Their account allowed either to sign, so her husband hadn't done anything illegal by emptying the account. Missy talked to a lawyer who told her she would have to fight to get her money back, which could take years.

Additional credit cards on your account

Your credit card provider may offer you the option of having additional cards for family members. These are not strictly joint accounts and the primary credit card holder is usually solely liable for the debt. For more information see secondary credit cards.

Closing a joint account

There is more to closing a joint account than just cutting up the card. Follow the steps below to close the joint account properly.

1. Both owners need to agree - Before you start closing a joint account, both owners need to agree that the account should be closed. Agreeing on this will help avoid any delays when it comes to arranging the closure. If you cannot agree, contact your bank to advise them of a dispute between the joint account holders. They may be able to freeze or put a temporary stop on your account until you are able to resolve this, or they may require both of you to authorise transactions on the account. Make sure you have another account to use for your pay and to pay bills.
2. Sort out direct debits and credits - Ask your bank for a 13-month list of any direct credits and direct debits for your joint account. Contact your employer and anyone else who regularly puts money into your account, including Centrelink, to tell them of your new account. Cancel all direct debits from your joint account and make alternative arrangements to pay these bills.
3. Zero balance - Pay off any overdrawn amount and work out with your former partner how you will divide the remaining account balance. Your balance must be zero before you can close the account.
4. Call your bank - Tell them you would like to close the account. They will need to verify both owners' identities. Take note of the date and time you called, and the name of the customer service officer you spoke to.
5. Put it in writing - Follow up your call with a letter confirming you want to close the account. Include your joint account details, both signatures, and details of your phone call. Ask for written confirmation that the account has been closed. Keep a copy of your letter in case there are any issues later.
6. Confirmation - You should receive confirmation from your bank once the joint account has been closed. This could be a letter or a final statement. If it does not arrive, follow up with the bank.

MoneySmart
(ASIC)

Getting some peace of mind

Nothing ruins a holiday or business trip faster than lost luggage or an unexpected accident. Having travel insurance cover won't prevent things from going wrong, but it can make things much easier if you get into trouble.

What is travel insurance?

Travel insurance covers the costs of any unexpected events you might incur while traveling. When purchasing travel insurance, you pay an upfront premium to cover you for a set period. If you travel often, you can also purchase an annual travel policy.

What does travel insurance cover?

Travel insurance typically covers the financial losses caused by a range of events that may affect your trip before, during or even after it has occurred. This includes:

• medical expenses from personal injury or illness
• loss of luggage or personal items
• theft
• disruptions to your travel plans (e.g. cancelled flights, though it pays to check exactly which situations are covered).

What does travel insurance not cover?

Travel insurance usually does not cover:

• injury from extreme sports (e.g. bungee jumping or white water rafting)
• illness or injury caused by a pre-existing medical condition
• pregnancy-related costs (not all insurers will automatically cover women over 22 weeks' gestation)
• loss or injury from acts of terrorism, war and some natural disasters
• loss or theft of unattended luggage (check your insurer's definition of 'unattended')
• claims for travel to areas where an official travel warning has been issued
• losses incurred due to the financial failure of an airline, hotel, other travel operator, or your travel agent.

If you're about to travel overseas, travel insurance should be an essential item on your trip checklist. You need to read the product disclosure statement (PDS) to find out what's covered and what's excluded, especially if you're planning any unusual activities or you have any pre-existing conditions. Cover can differ between insurers so shop around for the cover you want at a price you can afford.

Does travel insurance cover mental health?

Some travel insurance policies cover you if you need to cancel or change your travel plans due to a mental health issue that you suffer after buying the policy. Be sure to let your insurer know of any pre-existing conditions, including any mental health issues, before you take out a policy.

How to choose travel insurance

There are many travel insurers in the market and you have a range of options available when choosing your cover. Shop around to find a policy that suits your individual circumstances and travel plans.

Travel insurance does not have unlimited cover so it's important to choose the right level of cover for your circumstances. Read the PDS carefully to make sure that the things most important to you are covered and how much they are covered for.

Choosing your travel insurance policy

When choosing a travel policy find out:

• the cost of the premium and any excess applicable to claims
• what's included and excluded from the policy (and how this compares to what you intend to do on holiday)
• if there are any age restrictions on the people covered by the policy
• how much you are covered for (dollar limits) for claims on individual items and as a whole
• what proof you need to make a claim
• how to contact your insurer if you are overseas.

Exclusions often apply to 'at risk' activities like parachuting, abseiling, riding a moped or motorbike, as well as any injury sustained while under the influence of alcohol or drugs, or as a result of a pre-existing medical condition. Be honest about the activities you have planned and any personal circumstances that could affect the cover you need.

When you have chosen a policy, be sure to tell your insurer about any changes in your circumstances before or during your travels, as this may impact your cover.

Case study: Sarah's heart attack

When Sarah was planning a skiing holiday in New Zealand she took out travel cover in case she got injured or any of her possessions were lost or stolen. Sarah sometimes suffers from an irregular heartbeat (arrhythmia) but she was relatively young, very active and wasn't taking any medication, so she didn't think her travel insurer needed to know about it.

Five days into her holiday, Sarah suffered a mild heart attack on the ski slopes and had to be hospitalised. When she tried to claim back her medical expenses, her insurer denied her claim on the basis that she had failed to disclose a pre-existing medical condition.

If Sarah had disclosed her condition, she may have been able to get cover, for an additional premium, and would have been reimbursed for all her medical expenses.

Taking out insurance through your airline

Some airlines offer you insurance when you're buying tickets online. It may seem convenient, but it's smart to make sure the cover suits your needs and the cost is competitive, before you agree to buy it. Also watch out for travel websites that automatically select insurance for you, especially if you're travelling domestically.

Credit card travel insurance

Some credit card providers also offer insurance for overseas travel. The cost may be called 'complimentary' but is often included in the credit card's fees (like the application fee or annual fee) or its interest rate.

To be covered, you will usually need to pay for a minimum amount of travel costs with your credit card. For example, you could pay for your overseas return flight, or prepay some of your accommodation costs before you start your trip. Each policy is different, so make sure you check with your provider how to activate it.

As with all types of insurance, it's important to check the terms and conditions to make sure this kind of policy suits your needs. Insurance through your credit card may only cover the cardholder (not your spouse, children, or additional cardholders), and will generally only cover you for the trip you have paid for on your card and only for overseas travel.

Making a claim on your travel insurance

If you need to lodge a claim, be completely honest about events and any mitigating circumstances. There can be serious consequences for making a false claim.

Register your claim or inform your insurer that you intend to make a claim as soon as possible. Some insurers require you to inform them of any incidents within 24 hours.

Your travel insurance policy should include the policy number, details of what is covered and contact details of the insurer for assistance. Always keep a copy of your insurance policy with you when you are travelling.

Smart tip

Before you leave home, take photos of any expensive items you're taking with you, record the serial numbers, copy purchase receipts and make sure they're covered under your policy.

Preparing a travel insurance claim

Your claim is more likely to be accepted if you have the relevant documents:

• Proof of travel - to verify the details of your trip, e.g. flight details, itineraries and hotel confirmations.
• Doctor's report - to prove you became sick or injured while travelling. Written confirmation should be provided by a qualified member of the medical or dental profession.
• Police report - if something was stolen, you were injured in an accident or you were the victim of a crime, your insurer is likely to ask for proof that the incident was reported to the police.
• Valuations and proof of purchase - to prove that you own the item that was lost or stolen and verify how much it cost. This applies to items you've brought with you on your trip and anything you purchased along the way.

Don't forget to keep a copy of your claim that includes all the attachments and proof of submission (like your sent email or registered post details).

Australians and travel insurance

Our  Australians and travel insurance infographic  explains why Australians travel, where they go, what is covered and isn't covered by travel insurance and how to get the best policy for you.

How to complain about your travel insurer

If you've lodged a travel insurance claim and it's been rejected by the insurer, there are things you can do if you think you've been treated unfairly.

• Lodge a written complaint with the insurer's internal dispute resolution department - Details of your insurer's internal dispute resolution process can be found in your insurance product disclosure statement (PDS).
• Take your complaint to external dispute resolution - If you're not happy with your insurer's decision you can complain to the Australian Financial Complaints Authority (AFCA). This is a free independent service and any determination they make is legally binding on the insurer.
• Seek legal advice - If you are still unhappy with the outcome you may choose to seek legal advice. Be aware there is a time limit on further action.

Travelling the world can be a great experience. Spending a little time to find the right insurance cover means you can spend less time worrying about something going wrong and more time just enjoying your trip!

Money Smart
(ASIC)

Find your lost super and get back on track

Your super is your retirement savings, so it's important to know what super accounts you have and how much is in them. Here we explain how to track down lost super, how to consolidate them and how to work out if you have enough super.

How to search for lost super

Have you kept track of all your super? If you've ever changed your name, address, job, or done casual or part-time work, you may have lost track of some of your super.

Smart tip

Look after your super because it needs to look after you in retirement.

You can check your super by registering for the Australian Taxation Office's online services via myGov. This will allow you to:

• see details of all your super accounts, including any you may have lost or forgotten about.
• find ATO-held super, held on your behalf when your super fund, your employer or the government couldn't find an account to deposit your super to.
• consolidate your super into a single fund.

If you have recently opened a super account, it may take up to 6 months to appear on your MyGov account.

You can still consolidate your super by completing a balance transfer form for each super account you want to transfer from and mailing it to your new super fund. See consolidating super funds for more information.

Case study: Christian finds his lost super

Christian had just started his first full-time job after finishing university. He had worked a few casual jobs while studying, but hadn't thought much about his super. His new boss suggested he do a search to find any super he might have lost. Christian had already set up a MyGov account to do his tax return online but hadn't realised he could use the account to track his super.

When he logged on to his MyGov account he could see that he already had two active super funds with a combined balance of $2,500. He was really surprised that he had accumulated this much super from two casual jobs.

When Christian looked into each super fund, he found he was paying fees on both and also had insurance premiums being deducted from each account. He decided to consolidate his super into one account and chose the fund with the better overall long-term investment returns and lower fees. He used the super consolidation tool on the MyGov website to combine them into one fund and then told his employer to pay his super into his chosen fund.

Christian's retirement is a long way off but he knows that getting on top of his super now will put him much further ahead when he eventually retires

How to check your super statement

When you receive your annual super statement, review the information to ensure it's still correct. See checking your super statement for the things to look for.

Find out if you have enough super

We explain how much is enough super but we also have a range of super calculators to help you crunch the numbers:

• Superannuation calculator - check if your super is on track and how fees can affect your super balance.
• Employer contributions calculator - find out how much super your employer should pay into your super account.
• Super and pension age calculator - check when you can access your super and the Age Pension.
• Retirement planner - work out how you can boost your retirement income by taking action.

If you want more money to spend in the future, you need to keep track of your super today. Finding lost super and bringing it all together will save money on fees and make your super easier to manage.

MoneySmart
(ASIC)

Having a valid will ensures your assets go to the people you want to have them. You might also consider granting someone you trust an enduring power of attorney to manage your affairs should you lose mental capacity.

It's a good idea to review your will and powers of attorney on a regular basis or whenever your circumstances change. Be aware of events that may invalidate your will, for example, a new marriage will void your will but divorce will not.

Guardianship of children

A will can also contain details of who will take legal guardianship of dependent children if something happens to both of you. This person is usually someone you trust to raise your children in a similar way to the way you are raising them, and someone who has the emotional and financial capacity to take on the responsibility.

Setting up a trust

If you have a lot of assets or a complicated family structure you may consider using a trust to hold your assets. A family trust can be created while you are still living. A testamentary trust is created by instructions in your will, in the event of your death.

You should ask a legal professional to check your estate plan to make sure it is valid.

Keeping your important documents safe

To make sure the person managing your estate can easily locate all of your financial information, set up a file listing all your assets, liabilities, insurance policies and other financial information.

The file should include all relevant details such as:

• the financial institution, account number, name of the account
• policy provider, policy number, date the policy commenced and is due to expire
• any other information that may be required to accurately identify you or your account.

You should also include the latest account statement for these documents in the file. Don't forget to include financial products where you receive correspondence by email.

Consider keeping a hard copy and an electronic copy of this file. Keep the electronic copy in a secure data file and the hard copy in a locked filing cabinet that only the person managing your estate has access to. Do not include passwords or other access details that only you should know.

Here's a full list of all the important documents you should put in a safe place.

Don't leave behind a financial mess when you die. Develop a plan and get your paperwork in order to make sure your loved ones have one less thing to worry about when you've gone.